Hello and welcome to tonight virtual commonwealth program. My name is reed im a Technology Reporter with the Washington Post for employees to be the moderator for tonights program on a critical topic historical importance of the transformation brought on by artificial intelligent and virtual environments. As we have seen so acutely over the past three months with the covid19 pandemic in the social media with the killing of george floyd in minneapolis and its aftermath technology in online environments guide every aspect of our lives. Tonight i am pleased to be joined by two Silicon Valley pioneers to discuss these issues further. William davidow and Michael Malone, their new book the atoll must revolution was out now it delves deeply into the revolution we are living through regarding ai, the virtual environment. It can be purchased everywhere including bn. Com. A little bit about our speakers, William Davidow he earlier career worked at intel was credited to being one of the pioneers in hightech marketing. Michael malone covered technology for the San Jose Mercury news in the 1980s and remains one of the worlds bestknown Technology Business journalists. Together they wrote the influential book the Virtual Corporation and today they are here to discuss their latest book. I must say it is a great read. Now before jumping into some quick housekeeping notes, questions can be submitted by the gas via the youtube chat feature poster question there during the program theyll be forwarded to me. I will get to his many of them as possible. Lets jump into night. Phil i want to start with you. You helped make Silicon Valley, Silicon Valley. In recent years youve written a lot about how the Technology Industry is taken a wrong turn. In many ways its hurting our world, ark economy, our society more than it is helping. What made you want to write this book . And why now . Guest when i was with intel, what we were doing, ive come to realize childs play. What we were doing was tinkering with things. We are making stoplights work better, we had cash registers so they added up and along came the pc, and the automated spreadsheets, when you automated a spreadsheet, it went inside a business and you replace something people were doing with pencil and paper or Something Like that. But the business stayed the same when it came to realize what was different about this technology was it was transforming the form of our institution. If you look at it if you look we automate existing format causes the form of the institution to change so a bank becomes an application on a smart phone. And then, he suddenly realized this had happened twice before inhumanity once in the agricultural revolution and then the industrial revolution. What everyone was saying was, this is just another Technology Change only is faster. Its not that it is a transformation of society. Now you call that change in your book, a social phase change. You said it is this a rare and monumental thing. Can you go into a little bit why do you call it a phase change . And how is this one really different than those other couple of phase changes you document in history . Well phase changes in actual scientific term. It refers to a model the same molecule having a different physical form so a storm cloud turns into a snowflake. And when water goes through a critical temperature, 32 degrees, changes form goes from being a liquid to a solid it obeys different rules, we use different tools on water pumps and pipes. Enter intuition about water tells us nothing about ice. And on top of that comes as according with the analogy. Ice breaks pipes. An ice sinks ships like the titanic. that we are in right now that connection in the intro we have coronavirus, we now have protest and Police Violence and racism and all of this together is doing a lot of things. Its kind of accelerating the adoption of these technologies. We are here on zoom using zoom right now to post this discussion. Its also kind of just bringing to the forefront of some of these issues with the technology that you get to in your book. For instance, i began yesterday announced that its going to call out of the facial recognition business completely. Because the algorithms that they use are actually discriminating against people of color. Theres all this turmoil and chaos you guys, what effect do the of the turbulence do think this will have on the future this is the type of issue that change brings about. In other words, im going to switch the subject on you. Its like privacy, privacy we used to have a door we lock. Now privacy has a totally different meaning. One of the challenges i think that we have in Silicon Valley is that we are now at the point where weve got to be very conscious of the psychological and sociological aspects of everything we are doing that was never the case in the past. Nice to have you back. One of the things you both say in the book is that we need to change the way we are looking at these things. We are looking at them all wrong. How are we looking at this wrong. . Societal phase changes are pointing to reflection if you only lived in a world of liquid water you lived on the equator you never see nice you know have no idea what ice looks like. You know its going to behave all the different. awhen we go to the phase changes we go to alternate reality that on the other side all the rules have changed and things may look a lot alike. Buildings and Everything Else but there is been a substitutional equivalent taking place what we do is fundamentally different. If youre a herdsman out in the advance and you came across jericho for the first time, you might not even recognize human structure in the city. In one understand how society was organized. You wouldnt understand anything and it may be possible you could never really cross over the jordan to this new world. We seem to be in one of these right now. We had another one in the 1700s, if you are out there working on the farm and all of a sudden the factory started arising he went to work in the city completely new reality. Our senses bill talks about this a lot is that we have evolved. This is such a profound change going on, weve evolved in the physical world where time has a certain speed and scope. Nature is not planned for us. Its not organized for us. We adapt to the world. The Virtual World is fundamentally different. It was created by companies and designed to focus on us, manipulate us hopefully in positive ways but also managing us like casino. We are biologically not even prepared for this new cyber world that we spend half of our time in now. You document very well that some of these changes are already starting to look dystopia. But it doesnt have to be that way. You kind of say, theres two features we could have. Adobe and one in utopian one and. Lets look at the balance. Take the industrial revolution. People left the farm and went to work in factories. We ended up with a dickensian world in the city of people laboring in the mills and child labor the dark satanic mills and all that. On the other hand, like the expenses he went up, literacy went up. We invented new forms of health like hospitals and medical care, and technology. Coming out of labs that emerged during the industrial revolution. We did a little bit of both and how the scales are going to end up is still not determined. Its more than just predicting the future, which i think both of you are is pretty good trying to understand how we should the changes we should be making and the algorithms and dividing in a way our place in society whether or not we get the Health Coverage we want or the Car Insurance at the price we want it. Its already starting to happen in the book. Not all of this is great. So what do we do . What are some of the things that we can do or what is a new way of thinking so we can better adapt . I hate to wave my hands but im going to. Its hard to believe probably 200 years ago work was considered to be a curse. Now we are saying, not having work as a curse. Roughly 80 some years ago George Maynard kings wrote this future for our grandchildren, i forget the thing he protected we might be working 15 hours a week and would have chances to really enjoy life. We are going to end up with a different value system. These are the things we are going to have to be prepared to accept and its going to be a very different world stop there are things that we do that are monetarily valuable that have no social value. There are things we do that are socially valuable that have no monetary value to their name. Like raising kids. If you are willing to pay the money so that i can get childcare so i can go out and get a job, maybe we need to think differently about these things and say, raising children is so important, we are willing to pay people for doing things that are socially valuable that we never considered to be compensated bulwark. These are the kinds of issues we are going to have to deal with i do not purport to know what the right answers are. If we adopt the attitude as this is the way we did it before and this is the solution we will apply to the future, i know thats not going to work. My argument would be, there can be a conservative solution or a progressive solution, whatever you want. But youve got to look at these things and say, new farms are gonna require new tools and new rules. And you cant just say this is the way we did it before, this is whats gonna work again. You talk about Silicon Valley companies becoming the new empires of this new era instead of powerful nations. We have these corporations that dominate our lives. This Current Crisis highlights that phenomenon. Ive been writing about this post google and apple have got together and they are essentially deciding how Public Health officials can use a Smart Phone Technology or cannot use Smart Phone Technology for their efforts to do contact tracing. Google and apple put forth their own solutions they are taking on the role of these institutions that we have all agreed upon and voted on as a society. Is this power that they have a good thing . And what do we need to do about that . You will note today all got richer during the pandemic. Mainstream america got. That might be where things are going. One of the things that occurred to me in writing the book, if you look at it, ab when we distributed electricity we created utilities. Then the application layer was the lightbulb and we had we had lots of different lightbulb suppliers or lots of different furnace suppliers for the gas utilities. Today we think about the physical communication layer as being the utility. You cant use that layer without the application layer of the platform that sits on top of that. Whats happened is that apple and google and facebook are in fact utilities now they are functioning as private companies. In the past we have the electric companies and they were private companies and then we turned that into utilities because it made sense to only have one phone Company Supply everybody. We are going to have to talk about issues like that. When my mother was growing up in reading pennsylvania there was free from companies and if your friend was on a different phone company you couldnt talk to them. It made no sense. Recreated the utilities so we can have one phone company. These are the kinds of issues we have to talk about. Bill committee agreed with elon to bust up amazon . I have different feelings about amazon then elon does but hes a very smart guy. [laughter] the phone companies though, compared to the empires that you write about now, they had a very narrow effect on our lives. These companies are doing everything for us. How does that create differences . To me, that is part of the big difference. We have antitrust laws and thing like that. And im not saying theres anything wrong with antitrust laws but antitrust laws are the meek of the past and maybe we have to look at these things differently. The reason for that is also these are borderless institutions. They arent necessarily ab facebook or google are operating in germany. They are an American Company but with this world breach. So you get into the issues of how much what i would say World Governments do you want to have you may object to me talking about World Governance when you talk about commerce but what about cybercrime crime was essentially local in the past. You had to have a gun and escape car. Today somebody steals 500 million, citadel steals 500 million and located nowhere. In a millisecond. He may have an interesting question though. Even in europe where the antitrust laws are comparatively stronger or at least regulators seem to have more power or aggressiveness in going after these companies, there hasnt actually been, there have been big fines that hasnt actually been any sort of change that created change in behavior in the companies. Raise the question and what leverage does society actually have over these companies . Thats a good question we saw the nba curl up when there was a problem with china a massive investment, we know hollywood cannot make a movie and say anything negative about china because theres massive amounts of investments. We are already seeing the effect, its changing what we are allowed to see. Fundamentally i believe what i would call the Business Model of the internet is wrong. Legislation could change that, for example, if you gave me ownership of all my personal data, that would change things dramatically. We get into that writing the book. We have to own our own data. It seems more and more apparent that bill has been a great advocate of that for years. Now i think everybody is beginning to understand, giving up our data for atheir surfaces was a very bad contract. This is where i might push back a little bit in one area i might push back on this or prod this thesis a little bit. Facebook is fond of saying, you own your own data. Technically you do have a choice and we can use these services or not use them. So that Value Exchange is already there weve already all decided were to give up some of our personal data or privacy in exchange for these services. I think privacy advocates would say, do you really have a choice . [inaudible] if Everyone Needs to use facebook, Everyone Needs to use whatever platform du jour is is anyone really going to have a choice to not make that Value Exchange . That partially baked into the algorithm. Let me give you an example we reduced the cost of one to many communications 20, it used to be that you told me i had free speech and its written right there, i can say anything i want, it turns out that thats been one of the biggest hoaxes folks wasted on society forever. I have all the free speech i want but nobody listened to me. Nobody could hear me. If i wanted to talk to a lot of people i had to go out through mass media or had to spend a lot of money. So free speech was expensive. So now we reduce the cost of free speech 20. The thing that was limiting free speech was the free market because people had to pay for it. You had to pay to get your message out. When we reduce the cost of free speech 20 we underpriced something that was extremely valuable and we created what i would call a tool for antisocial behavior. A productivity tool for antisocial behavior. There is nothing wrong, it used to cost me money to send a letter. There is no reason why email has to be free. There is no reason why reaching thousands of people on the internet has to be free. If it costs a little bit to do that, we behave more responsibly. But because we are giving away something of great value for zero, we are encouraging tremendous amounts of irresponsible behavior. Weve also made, reduce the cost of free speech but also made that irresponsible behavior very profitable for a small handful of people. To give you an idea just how much information you are giving up, there is a gentleman named abformer microsoft executive now head of the Digital Cities project of standard. As experiment he had the tools to do the tracing he went down to downtown palo alto bought a stick of gum, lunch, and to take the gifts. Then he tracked where that data come about those transactions went and within a week it had already gone out to about 50 different servers around the world within six months it was several thousand servers. That stick of gum that was bought was now known by thousands of major corporations and information control entities and Everything Else around the world. Imagine as we move into the internet of things where your car is talking to the grid and the thermostat in your house and your refrigerator and Everything Else are all tracking you, they know where you are and thats being shared with everybody, including people who want bad things from you and to take advantage of you. Thats where we are heading into as we give up the free information that we think isnt that important. But it becomes vitally important and there some threshold we are about to cross where it becomes really dangerous. Since we are on the topic of free speech i did want to ask you mike about, you talk about the media in the book. But at the same time as free speech has been reduced in cost, you also kinda diminish the earning capacity of, especially local news. I would really say the National Media but local news in places like the publication you work for. Is it too late to get that back . Or are they some worries we can change thinking on that as well. Remember the newspaper is largely a phenomenon of the industrial revolution. He managed to transform somewhat by the digital era going into television and eventually on the web but the monetization model of the web wrote journalism. Because they started