Transcripts For CSPAN Fortune Brainstorm Tech 2019 20240714

Get our stuff. He has raised a quarter billion dollars. You know, average in cilic and sharing how his company is facing the challenges and also introducing us to a new friends. Please welcome sebastian lehman. The Business Model is Pretty Simple. You guys have focused on innovating in certain areas. Can you explain about how you approach innovation . Good morning. Thank you for having me. Excited to be here. We like to compete, not dollar to dollar, but with innovation. In many cases, it is the smarter way to compete. Money is one angle, and an important one. If you are not the most wellcapitalized, you need to find alternatives to compete. One of the innovations that we have, we bright here today. Is a piecethat there of the network that we are building. Ours is called serve. We brought it here. Maybe we can show it. Drives itself. Hopefully not off the stage. It understands that there is an object, so it moves around it. And navigates on the sidewalk. It is built inhouse. The second time she is on the stage. We can have a look. Socially aware of me . Yes. Then you go. It worked. We have something here from paradise bakery. This is for you. There is more in here. That is it. Lets sit down as i eat dayold yogurt. Why bring it inhouse . There are a few companies doing this. You are not offended if i do not eat this right . Why bring it inhouse . We tried to figure out if there were companies that we could acquire. , how it sometimes is in Silicon Valley, the were extremely high. Dosaid, we think that we can it inhouse and faster. Need to thing that we do inhouse is be our own customer. We do millions of deliveries every month. We have data that many other Companies Need to build it to perfection. We decided to bring it inhouse. How difficult is it to roll out into cities . The beautiful thing about it is because it operates on the sidewalk, we do not have to wait until it has achieved and we have permission to deploy. We have an operator that can look at it and intervene with it in situations that we cannot figure out what to do. The operator is sitting in a war room . Remote in San Francisco. And help veterans find jobs after they are back from irving this country. That is a beautiful part of it, but it helps us deploy serve. We might get more questions later, but lets get serious for a minute. Are you going public . Official line is that i cannot host i cannot comment on this. I would love to take it globally. It is well loved. Our plan is to take it public. The rumors. There are reports that you are in talks with several other players, Companies Like uber for example. Where did those rumors come from . Can you substantiate them . If i knew where they were coming from, i would have addressed that already, but it is a small industry with a finite amount of players. Asare growing twice as fast debris and grub hub. If you take the necessary steps to prepare your company to go , we deal with it the same way we have done always. Make the smart decision. That is what we do. There is quite a bit of overlap with Customers Using multiple brands in the space. Location,ses, in some the lack of brand loyalty, does that naturally lead to other factors, to more consolidation in the space . Is that inevitable . Youhere is an overlap, but will see that the overlap is between post mates and any of the other apps because we are very focused on the millennial customer. 60 of customers are female. We put a lot of effort into what the Company Stands for. Wehad a Customer Base that like and that is very unique. What is the reason for the popularity and l. A. . You had a large market share there specifically. They think it is cool. In Silicon Valley, nothing wows us anymore. At door l. A. Andhe first and it gave people a superpower. People have a limited time and they discovered the application five or six years ago. They started talking about it. Creative people started writing it into script. I think that is what helped. I am afraid to say that it was not me who made it will. It really has an iconic status. If you want to have something delivered, you will say to post make it. I want to go to you guys for questions. Speaking of california, how many of you are familiar with the bill that is coming up . There is one. This would reclassify independent contractors as employees. How many contractors dean have currently . Around 400,000. What does that do for your Business Model . I think the right way to look at this is to understand what it does to the people. Is true for most of the platforms in the delivery stage. You have almost 90 on the platform. They work less than five hours a week. Is 4, 5, 6 million it is the same number that most it comes toy when medical expenses per year. Believethe gap why we that leaving these people at contractors not leaving them but making sure that in a bill t passes, we solidify that. You think you we solidify that. A fleet Advisory Board for almost two years that helps us do the right thing. I think we have put forward a proposal that makes it very clear that we care deeply about the workers on the platform. Willing to have more voices on the platform. I think we are doing the right thing. Questions from the audience . People need more coffee today. Lets talk about coffee lets talk about novation. What are other ways . It seems like a Pretty Simple value proposition. What other ways are you looking at, not only offering more to your customers, but also optimizing the way that you operate . I will give you an example. The company was two years old, we unveiled delivery as a service. What that does is it allows us. O act more like fedex you can have access to the post meet fleet. You can deliver goods extremely fast in 3400 something cities in the u. S. The first to innovate with a subscription service. Post mates unlimited. I hope we have some subscribers here. Fee. Ay a monthly annual we launched post make party. It has done a lot more. Post mates party allows you to have free delivery. Where matching a place someone has placed an order with your location. You are trading a few minutes of your time for free delivery. And it is helping to increase efficiency. We do these things very selfishly, but many times it has a great benefit to the customer as well. And allows us to be more efficient. We launched it two months ago. Anybody here use post meet party . We had a question back here. Just want to ask about the delivery vehicle. What kind of interaction do you see . How did they react . It,hey stop and look at kick it and wave at it . Programmedve any responses been encountering people . Have 18 that is focused on the interaction part. You have elimination. You have a display. People will not interact with it. There is a more sophisticated program that allows them to give yet, i will give you an example. Robot delivers food. The one thing it can do is press the button of the elevator. It will ask you to press the button. It is a great interaction because it shows how we can complement each other. What does it do if nobody is in the elevator . Around. St waits it does not do elevators yet. We started testing it in a community and we wanted to do that in a gated community because we thought, if we can figure out a way that is nonthreatening, to not just the millennials that are used to technology around them, but to a group of our society who is a little less used to it, we will achieve rate things. Itically, we wanted to make easy to use. Thank you for being here. Does she collect data . She has some pretty fearsome cameras there. How are you approaching privacy of what she sees . Does post mates operate outside the u. S. . We do in mexico. Us. S a great market for that is for the medium future. Collects, we it will sell it to the highest bidder. Uniquek it is really a data asset. No one will be safe once these are deployed. Your person here is like freaking out. Given that i was born in germany, maybe that is part of my evil plan. You did make a joke backstage about how it could shoot lasers. There is always a little truth in everything. Most questions are around the robot. I wonder if you could talk about the actual space inside is not huge. Terms ofient is it in replacing humans at some point . Is important to understand when it comes to innovation that whatever you see in any moment in time is not how it needs to be forever. It looked great and it captivated people. He thought he could carry it around, which nobody does with a desktop computer. We wanted to create something nonthreatening with a medium formfactor. We walk on the street and that is the area that look and communicate. It does only need to work for a few number of deliveries on the platform. It does not have to do 100 . We do not think it should do. It can do short deliveries. Deliveries that are not time sensitive. There are a lot of cases where we believe that the factor that we have today is very sufficient. Upt deliveries do not take more space. The question about independent contractors. I know this is a question with uber and lift. This is what does the deliveries. Does it ever get to that point . Same answer as with innovation. The idea that it will replace everything is as true as computers have replaced all of us up to this point. And makeelp, augment things possible that have not been possible before. It is important to see the other side. Here to help us fulfill the dream of having an infrastructure that can deliver goods locally. What it allows his businesses to distribute the cost and goods for an extremely low cost. It helps local economies drive and it helps retailers in the u. S. Compete with amazon because they will have a better and faster infrastructure than amazon does. That is the Positive Side of things to look at. We talked about how you grew up in munich and dreamed of coming to the Silicon Valley. Still an attainable dream . Has it become harder for you or others to come to Silicon Valley . In my personal view, what has happened is there was a time when you could be an entrepreneur and you had a year to tinker around. Because maybeable your idea was very left field. It gave you enough time to figure things out. Do, you would have the small chance of success. Harder, but maybe that just means that the ideas that we need to think about the need to be more fundamental in general. We look forward to seeing what news unfolds in the next few months. I all right. I want to give a huge thanks to my premier partner. I think we are going to see a logo. Intel. Miller, markets. D rbc capital ourso want to thank partners. Thank you. Last september, our next guest was appointed as executive director of the criminal Cyber Response and services branch. She is the fifth highest Ranking Member of the fbi and top ranking woman on the agenda. She oversees all cyber investigations worldwide and works to protect digital infrastructure, most of it controlled and run by private companies. [applause] good morning, everyone. Good morning. Bitink we all had a little too much fun last night. Amy, i am so glad right here with us. Say that americans are more afraid of malicious cyber activity than economic problems, Nuclear Weapons and terrorism. Should we be afraid . Short answer, yes. I do not see those things as mutually exclusive. Cyber involves all of those things. Threatshose traditional , terrorism, espionage, intellectual property theft, it takes on a new path in the sense of Cyber Capabilities and the exponential increase to enable those things to be a lot scarier. You about thek specifics, tell me about your role and what it encompasses. Fbi, we break ourselves down into separate divisions. One of the divisions i oversee is the focus on criminal investigation. Everything from whitecollar election fraud. Oversee isision i the cyber division. Those are the people that are really looking at the intrusion. Hesis out there as far as giving orifices health compromise and how it manifests itself. You have plenty of you have plenty of free time. China. Aboo has been people are very concerned about it in terms of global competitiveness. Tell me what usc that is coming out of china what you are seeing that is coming out of china. Willing to steal information, steal intellectual and steal military secrets, academic secret. Thehe process of doing all things, they are investing in companies. Risk. Ose things create a. Hey can get information they get it for free, they get it quickly and it positions them to keep their goals. What role do you play . With a bunchinate of other agencies. Looking at how we defend our networks. Also, we work with the department of how we may be able to see what is happening and how we might be able to take defensive actions. The fbis main role is accountability, trying to figure out who is responsible for this thing and how do we hold them accountable, whether through indictments or criminal charges or for sanctions, that is our role to make that happen, figure out who did it and then hold them accountable. Lets look to the other bugaboo, russia. Is it any different than china . It is different. They are interested in stealing our military secrets, our government secrets. But what you have seen publicly over the past several years is what we call maligned foreign influence. , beingcing campaigns able to use and take advantage of our dependence. Question makes people whether or not what they are seeing, but they are reading and hearing is real because we have seen instance over us. Andrew lets talk about a specific incident that happened fairly it hit the headlines fairly recently, which is the florida Voter Registration incident. Tell me a little bit about what happened there. Amy we at the department of justice charged several russian nationals who worked for the main intelligence directorate, the gru, a while ago with intrusions, with basically stealing information. When we saw that in the runup to the president ial election in 2016, we realized we got to bring all the resources that we have in the f. B. I. Together to identify that type of activity when that is happening. And other agencies needed to do the same thing. So what we did is form a Foreign Influence Task force in the f. B. I. Comprised of our summer division, criminal investigative , counterintelligence division, even our counterterrorism division. Identifystopped to after those charges, to see where we see more about actively happening. We did that into the midterm elections in 2018. And we are continuing to look for that type of activity into the 2020 campaign. We saw attempts to try to infiltrate these election networks that were being used. We have no evidence that there was any indication of whereabouts or changed or anything like that, but there were certainly instances where trying to gain access to information that surrounds the electoral process should be concerning to us. Andrew yes, i would say so. The fbi received a lot of criticism for that incident and it was really round transparency. Which is kind of part and parcel with cybersecurity. The criticism was that the f. B. I. Wasnt transparent enough for wasnt sharing enough information, as you can imagine, a whole host of folks were involved in the Voter Registration process. How do you feel about that because transparency is an asset and a risk in this line of work. Amy it gets us into a good discussion, i think. See activity that looks off, that they know is maybe not something but maybe is , we are highly encouraging them to contact us. The problem is that first off, of course, we recognize the competitive advantage the companies have or dont have when they acknowledge they may have been attacked. Right . That is number one. That outreach to the government. The problem is if you do not do that, youre potentially not only enabling us to come in and help you but you are also potentially not being able to share that information with other people, or even to prevent the next one from happening to yourself. In certain instances we are talking about here, when the Victim Company does contact us, we take that very seriously. We have no obligation if you will to tell the world if a Victim Company says hey, i really dont want the world to know about this, i want to work through it, just make sure i understand what we have. What we see. Then lets talk about that. Bring us in so we can look at it together. And see if there is actually some thing to it. Andrew yes. And i will come back to that. I want to ask about the current administration. Trump pushed through a National Cyber strategy, right . He put that out there and sign the bill to train local Law Enforcement in Cyber Security tactics, i guess is the broadest way to put it. Do you feel like we are doing enough from a u. S. Governmental standpoint, that wed executive that could be the executive ranch or legislative branch, however you want to break it down . Amy no. I think we could always do better at this. This is the future. If you think about our dependence on technology today. I view this as a wholesale change in the way that we function as a government, as a people, and as a society to get the proliferation technology has meant that we need people who understand it, who can really and 1s but wes also need people who understand policy, who understand how to conduct an investigation, we need to bring those together. I think that is where we tend to fall short is figuring out how those things can work in symphony, and encourage that type of collaboration and coronation. We are doing a lot in that area, but we can do more. Andrew sewing need more collaboration and more people, it sounds like. More need more money, laws, what do you think . Amy technology is expensive. The people who understand technology, we are in extreme demand across the board. The government will never be able to compete with the private sector when it comes to salary. What we hope we can compete based on his the mission. You are never going to be able to do some of the things you get to do in the government that you would do in the private sector, and we need each other to share information. I think personally, if i had the ideal space here, i would like to see an ability to move backandforth between private sector and government more easily. Would furtherat develop all of our understanding and our capabilities across the board. Andrew yes, so lets bring this down. What should we be afraid of . Quite literally. Amy first i think the number one thing is, we continue to see in the f. B. I. , the lowest common denominator of where the attacks come from. That would be the human. Andrew its our fault. Amy its the user, user error. What we typically see is you dont update the systems, we because ithe patches is inconvenient, comes at an inconvenient time and we put it off. But the clicking, the perpetual clicking of things that you do not know where they lead to. [laughter] andrew stop using computers. Amy it is amazing to me. We have the Internet Crime complaint center. We call it ic3. It is taken into under 50,000 complaints. The vast majority of those are for nonpayment, nondelivery. But also extortion. ,and data breaches. When we ask and we feel that away, how did this happen, inevitably come up much of the time it comes down to, i thought this blank was from a person that i trust that, or from someone that i thought was a legitimate sender, and that is what led us to where we are today. Andrew what share of your work would you say are these very large youre concerned about nationstates and really highlevel stuff, versus this kind of pedestrian stuff we hear from our local i. T. Guy. Amy thats a great question and we are concerned about both. When it comes to nationstates, you have some very sophisticated people and governments. We talked about china and russia , and we have formally charged them, actual agents of their government with doing things. The apt10 indictments. Last december. Andrew this is the chinese hacker incident from last year. Amy yes. And the managed service providers. In addition to the gru, the russians with the election piece , he also saw the antidoping case where they were able to hack into the agents of the russian government hacking into the antidoping organizations. And then see the same from iran and north korea, but others. We need to be concerned about nationstates because of the capabilities they may bring to bear. And on the other end of the spectrum, the criminals. The people who are just doing it to line their profits are getting pretty good at this. [laughter] when you look at how much money goes through the really the criminal it go system, i will call it, is pretty phenomenal. We look at the statistics that we try to do recover assets in the financial fraud kill chain, we call it the Recovery Asset Team and what they saw in the course of a little over a year, a year and maybe three or four months, they were able to recover 380 million, and that represents about 78 of what was called in. That probably peoples life savings. So the criminals are getting very good at figuring out how con you out of your money, and also, how to deliver the malware. It is whole ecosystem. One person does malware and one system,oes the delivery another person does the foolproof hosting, another , and they all work in concert to be able to attack you and take you, to take what belongs to you. Andrew i will sleep so well tonight. [laughter] all right, lets go to the audience for questions. Tell us we are once you get the microphone. Thank you. Hello joel miles from accuweather. What is your greatest fear of looking ahead at the next 10 years, even if it is a low percentage possibility. His there a probability that a. I. Could cause a Nuclear Missile attack . What is your greatest fear . Amy my greatest fear would be , with respect to our critical infrastructure. Our critical infrastructure, i mean, you dont have to go to many steps out to think about the consequences of somebody taking out even a small portion of the United States critical infrastructure, whether telecommunications, finance, energy or transportation. Those are some pretty dire consequences, of of the the number one thing that keeps me up at night. The second thing is what you alluded to, the proliferation of technology has led to Amazing Things Autonomous Vehicles, interconnected devices, the internet of things. The rush to get something to market means that sometimes security is an afterthought. That is concerning because now we are trying to patch things that are already out there and potentially vulnerable. And usually are. Andrew yeah. All right. ] year. We read a lot in the headlines recently about the president s somewhat unique relationship with the f. B. I. A leader and thinking of guide in the organization, how do you remain above the political fray . Amy exactly what you just said. The fbis job is to collect the independently, politically, to the best of our ability to identify and uncover the facts. No matter where they lead and who likes them, the end of the day, we present the facts. This is what we do. For us as an organization, particularly for leaders in my organization, it is important to keep our folks focused on the mission. We get criticism across the board. We have for 110 years. But it is important that we focus on what we are doing and that we are doing it the right way. Michael miller, pc magazine. Theres been a lot of controversy about ransomware tax things,cities and other whether people should pay the ransom or not. What is your best recommendation . Not a good idea to pay the ransom, it just further encourages and we have seen it the encouragement it gives to others. It is a profitable business. Overve seen a transition time in the way ransomware is deployed. Rather than going after the obvious targets of the large companies, the ones who have the big money who could probably pay out, now you see transition to focus on Smaller Companies , smaller businesses, the ones that potential you dont have good security. And about potentially are more susceptible to compromise. That is concerning, because they will ask for a lower dollar amount, but in the end, getting a lot more bank for the buck and a lot more bigger return in investment. What would like other companies to do is develop their security come have your backups, and get the systems in place and updated, so that you wont fall prey to this and if you do, you probably will at some point, you have a place to go. Youll have to pay the ransom. You are not beholden to them. The last thing i will add is that there was never a guarantee that if you do pay the ransom, you will get your data back. That is a scary proposition. Andrew specific to municipalities. Amy we have seen a lot of that lately. One of the things we continue to focus on in our partnership with state and local governments and with private sector and the contractors that are out there that are providing the services, is trying to think ahead. I guess the best message i can send out there is, youre going to be a target. Think of yourself that way. Whether you are a municipality, small business, an entity of any sort, you will be a target. So what are you doing today to develop the practices, the protocols, the systems, the security in place . We will say dont pay the ransom. You are just encouraging that behavior. You see what happens over time in the sense that you pay the ransom and somebody else gets it, or you get hacked later. I know it turns out to cost a lot of money for folks to theirtruct their data and systems, but that is why we need to be thinking about that in advance. Andrew all right. Back there, yes, please. Robert from fortune. There is a bill floating around congress that would enable companies to take more active measures after cyber attacks. People called the hack back bill. What are your thoughts on that piece of legislation . Andrew should you hack back . Amy i have concerns about private industry taking offense elections. I think that could lead to some very dangerous voices lowered the dangerous places. It could lead to dangerous places for our government. We are thinking through what are the consequences of government offensive actions. You think about the Collateral Damage it could incur you think about all the consequences. The potential for retaliations, there are a lot of things that need to be factored in before somebody starts taking offensive action, because what you might think is a simple hack back has a lot of tertiary and secondary consequences that you may not even be aware of, and could potentially be exponentially more damaging to not only you as a company, but others. And to our critical infrastructure, as well. Andrew i have got one more for you. Yesterday, we spent a great deal of time in the town hall talking about, how do we regulate Technology Companies . There was a lot of backandforth about the habits t are, to be do about it, does the f. B. I. Have to much power, or not enough . How do you see that, there has been a lot of criticism about it. Amy i believe the way we do business is, our system of government was set up in such a way that the check and balance is important. It keeps us in check. The regulations are important. The ability, though, to progress as a nation depends on how well our legislation keeps up with the changes in our society and in technology. Is seriously not the on agency that is out there in this is nice, even though sometimes it seems like we are, in the news, but i think the interagency peace is really important. The way we interact with d. H. S. And dod, and the private sector to her, and academia, and state and local government is really important, because each of those brings a different for spec, and it is critically important to way we ensure that not one particular Government Entity or any entity has too much power. Andrew got it. [applause] amy, thank you so much for being with us. Wasnt that wonderful . The leading chip maker, qualcomm, as one of the largest manufacturers of ships they still have to work hard to stay ahead. To share what the 5g future holds, is welcome qualcomm ceo Steven Mollenkopf and fortunes aaron pressman. [applause] steve, welcome back to the brainstorm tech stage. When you hear that some companies lost out of the mobile revolution and now they are struggling, this is the guy they lost to. You are a lifer at qualcomm, right . Too much, 25 years. Youre an electrical engineer and you have your name on dozens of patents. Youre going to demystify 5g forest, right . Steve i will try. Ok. Lets start by demystifying qualcomm. You are often described as a chipmaker, but you do not make and print the chips, you design them. Steve sure, and i would say we do not think of ourselves as a chip manufacturer. The history of the company is really less about that. We have a vision for where wireless can take us. We tend to invent the fundamental technologies that create that. Essentially, what we need to do as an industry to create a downstream industry that can use cellular. That tends to be shared with the industry through the cellular standards bodies, which we are very active in, and have been for a long time. Then we provide chips, chipsets usually at a fairly high level , of integration, including a lot of software, that make it easy for people to use our chips. Everybody knows the product business, the chip is nice, and it has grown over the years. So they think that a sort of what we are doing is trying to figure out what technologies need to be invented, and delivered at scale, so that industries can take advantage of cellular. It is probably more exciting and impact more industries now than it was over the last 30 years of the companys history. Were 33 years old in terms of a tech company. Obviously, the next 30 years are probably going to be more broad and pretty exciting. Aaron in addition to selling the chips, you invent things that are at the core of mobile phones and other devices, then you license. You receive very lucrative royalty fees on those inventions. That has been an area of controversy, shall we say, the last few years. One thing that happened when you were here last, two years ago, he predicted that this battle you were having with apple, where they were suing you over the royalties and you were counter suing them, you said it would be a settlement. It is not going to go on and on and on. Everybody laughed, they didnt believe you. What happened in april . You settled with apple. How did you come to that . Steve this unfolded very much the way we said. Frankly. What happens i think is there always disputes about the price of ip. Sometimes those disputes are public, sometimes they tend to characterization remember, these are big, sophisticated companies. Ultimately, these things get resolved and the normal working relationship between the market parties is what is left over, and that is really what we have here. If you look at the engagement between us and apple and between us and other companies, almost always after a licensing dispute, it settles down and the focus is, how do you get the product together, one way or the other . That is really what dominates now. We are in a much more comfortable spot for both companies. Im very happy to have that. Aaron the stock market is happy as well. Your stock is up 33 since that settlement. What was it like as ceo . How did you feel when youre best customer is suing you . Or one of your best customers . Steve this is not our first rodeo here. The key thing we keep our eye on one of the big things, the big thing is 5g is coming or technology is coming. Typically, if you have great technology, you can figure out commercial disputes. Ok . It really has to do not so much with are you selling a product to them or not selling a product to them, it has to do with your relevant in the industry, and who should you be working together with, those types of things. That creates the environment for you to go. So when all this sort of external stimulus into the company the company was very focused on pulling in 5g. What are people really doing, that is what they are working with. That dispute from and all of a sudden, you see that qualcomms got a very strong position in 5g. Aaron so it was not a distraction from the business of the company. Steve it was a distraction to about 10 of us, certainly a distraction to me, but the people who were really focused on technology, they are locust on technology because they love it and they understand how unique it is. We have a great team, and they really demonstrated that during that experience. Now i said, your stock is up 33 since the middle of april which is impressive. Your stock was up 50 in the first few weeks after the settlement, 60 one another legal externality as youre calling it dropped. That was a court really in california that the federal trade commission was saying your anticompetitive in your licensing practice. Your stock has dropped in the last month to what is going on . There was some recent news on that just yesterday. Steve that is right. We obviously disagreed with the judges ruling, and we are going through the process of a stay, and ultimately, an appeal. There is a lot of backandforth , but if you look at what happened yesterday was the department of justice, they actually filed an amicus reef in brief in thes court. A lot of times people say the briefing speaks for itself, sort of downplaying it, in this case, the brief is so much more why weate in terms of think we are right on the law. Why we think we are right in terms of process, and ultimately whether we will prevail. I would encourage people to read it. And, remember, the writing entity is not some random person. This is the department of justice. The entity that holds this way here at least in antitrust law. We were happy to see that. So we think we will prevail. These disputes take a long time, and again, the important component of that is really for us, 5g is happening, we are launching it, we will get through this, and the company will prevail. But it is important that we get through this properly. Aaron as i was putting together this mornings daily tech briefing for our datasheet newsletter, which i hope everyone is ascribing to, i did read some of the briefing. One of the reasons they are offering for why you should not be prosecuted in this way is that for u. S. National security. Why is qualcomm important to u. S. National security . Steve may also said we were right on the law, too. [laughter] it really has to do with the relevance of cellular technology. They essentially i think recognized our leadership position in 5g. And also then, the importance of 5g in this case they made it, they made particular reference to the security of some Defense Systems as well as, in the case of the department of energy, which also filed a declaration, the importance of the infrastructure and the importance of it being secure as it goes forward. But you couldve had a number of industries that could have said the same thing. Myy are really saying, strategy for connecting my things is intersecting with 5g, and we need to make sure that the leaders that produce those technologies continue to be successful. That is really what it is about. It probably has less to do with us in particular and more to do with our leadership position in 5g and how important 5g is to downstream industries. Aaron lets talk about 5g, lets try and demystify 5g. I got to go to providence, rhode island, one of the few places that has 5g inservice for consumers. Can we do a show of hands, how many people have any in the audience tried a 5g phone yet . Just a couple of her here, but not too many. I tried the 5g phone and i downloaded a Reese Witherspoon movie on my phone and 10 in 10 seconds, very impressive. That i am not sure that is enough for me to make me want to sign up for 5g service. Tell us a little about what is this technology really going to bring to us besides the speed. Speed is very important steve , too. 5g has two vectors of interest. The first one is purely to the cellular industry, and it has to do with what is there, what is the advantage for them for launching 5g, and it is basically two things, the ability to keep up with the demand for wireless video. The peoples wireless video has gone up dramatically. Aaron Reese Witherspoon boone is doing an apple video. So there will be more demand. Steve and even beyond Reese Witherspoon there is a desire to get data. [laughter] although she is wonderful. Aaron one of my colleagues was suggesting we might want to download 600 episodes of the simpsons on to her fun. Steve and that is just an example, there is a tremendous amount of data, and that will continue for a long time. 5g allows the operator to get 30ths to that at about a of the cost, and it allows it to , whichcess to new bands give it tremendous ability to provide services to the consumer and also compete with online operators, like cable. You see verizon doing that in the United States. More g is the classic ,mor issue. And it also has less to do with the dramatic impact through a consumer. Data speeds, they love it. Beneficialncredibly for the operators to launch, so much so that i think if you 5g strategy good and deployment strategy, you will be left behind. Aaron how is the u. S. Doing on 5g . Steve they are doing actually quite well. Theres a lot of rhetoric around that. Aaron the race to 5g. Steve what has happened in 5g is really about it is the first time it is a global launch. Typically you see these technologies happen in one geography, typically japan, north korea or the United States and then it spreads to other areas. This time, it is launching worldwide. Of course, we had a lot to do with that. We basically run around, talk to the operators, try to orchestrate and make sure all of the industry participants are ready to launch 5g. But the reason it is launching withworldwide, has to do the second reason. Which is, how do i create the conductivity fabric underneath everything so industries can take of digitization in infrastructure, health care, they need to figure out how they deal at the digitization of their staff, their people, how do i remotely control things securely. It is the first time that the cellular roadmap really intersect with these new industries. We talk about how that is a similar transition to what occurred in the industry when he had electricity, the steam engine, all those things. They have a very significant it had a significant impact. So what qualcomm tries to do is first of all invent the technology to allow it to occur, we put it in the standards bodies, and then how do we get that out at scale super bowl can run these businesses . Typically is about how do i create a bigger pie . What happens is industries are being impacted that are serious industries, as opposed to just Consumer Industries. Obviously, Consumer Industries are serious. But if you are trying to figure out how to control pcs, the infrastructure of an industry, or how to fundamentally disrupt the infrastructure of health care or education, and becomes industrial policy for countries. A country says, i dont want to be late, so i better launch as soon as possible. And that is great for qualcomm. What you see is 5g ramping up faster than 4g both in terms of number of devices. Aaron almost nobody had their hand up. Techsny more brainstorm will it be before more people have their heads up . Steve next year. Today, go into verizon you can buy a samsung 5g device, the s10 5g device. It looks exactly the same as the 4g device. As the deployment come out, they will have access to 5g very dramatically, very different than what happened during the 4g transition. 4g transition, we had the much thicker devices, a lot of early teething pains of the technology. Aaron terrible battery life. Steve that is not what you will have today. And all the things to put duct about that you would not be a widow solve, how do you make sure it works, all these things, they already solved and there in the devices. So, we feel very good about it. And if you look at what the operators are ranging the next year, and will be difficult to not buy a 5g phone. Aaron ok. I want to get into a few of the examples to help people understand how 5g applies beyond phones. One we were talking about his cars. Now, you may have heard or read that self driving cars are going to communicate with each other and with the infrastructure over 5g, they will have a lot of data needs. But even before we get to self driving cars, 5g could impact vehicles. Steve first of all, the connected car is a dramatic trend not only for classic telematics i want to be able to get things off the car but the User Experience people ,emand now really has its roots its dna comes from the sun is i want software updates, streaming video, streaming audio, and you want updates to the personality of the vehicle. That is what people demand. A very much mobile experience. If you move forward, as you start to move into selfdriving cars cars, self organizing traffic patterns aaron we desperately need self organizing patterns. Steve the technologies to do that, we have been inventing for , alltime, cellular, vx these things. The computer that is appearing in the car dramatically increases, but you also have a need for cars to communicate to other cars, often times through the network, and often times the other car. If you talk to a car company i just came from detroit and they did exactly the same thing, they are all trying to figure out, how do i take this and change the experience of being in a car, safety, all these things . Pretty dramatic. It is great for us. Our problem is, how do i scale this up, get the bandwidth to take technologies that are important, and market it, make sure it measures into the market the way they need them . Aaron shortly we are going to come out to the audience for questions or comments from you. Maybe more on 5g. I want to ask, when of the reasons why qualcomm stock is where it is is that the smartphone revolution seems to be almost laid out. We are not really increasing at the rates we used to. Qualcomm has tried some other areas. Laptops, smart watches, not have quite hit yet. What do you think are some of the best Growth Opportunities for new markets beyond smartphones . Steve sure. I would say we do have a fairly significant nonmobile businesses. But the reality is we have a very significant mobile business. Happens when 5g and you dont even have to believe market growth, but unit growth, in order to believe the story, we will see an increase in the price of the units we sell into 5g, and an increase in the amount of content that qualcomm gets. The dynamics of the cellular industry, even without market growth, unit growth, continue to as 5g rollsactive out, and starts to become a larger proportion over the next several years. Aaron we will probably be saying more. That 5g phone is about 1300. Steve but you are going to get more. But the second aspect is, our auto business, which i think is has a 5 billion backlog continues to be very important. Aaron how fast is that growing . Several years ago, that was probably 2 billion less, something along those lines. Tremendous business in, i would say, the networking, the internet of things. Everybody has an internet of things issue, but essentially, more and more people are trying to figure out how you can get the combination of cellular less computing and drive it forward. Let you will also see tremendous Business Model eva lucian and the opportunity Business Model evolution, and they opportunity to not only sell products but also to help enable new industries to grow off these products. Maybe it will be a different Business Model them qualcomm. Even have to believe much more qualcommill happen and will get more per device to make it, we think, a very attractive company. Aaron a strong pitch. Are there questions or comments out in the audience . Wait for the microphone, please. And if you could give us your name and affiliation. Will start back here. Matt foley. I have two questions. One, you were talking about the 5g race and trying to get there. There are only a few Telecom Providers in the world. Is anyone not ready for that . The second question is, and i could be wrong on this, is there a uniform standard for 5g as there was for 4g in the past, and if there is not a uniform standard, how will that impact different types of 5g networks across the world . Steve let me answer the second question first. Yes, absolutely it is a unified standard. Pp standardsh the 3g bodies. You hear the question, is it going to bifurcate into multiple we dont see that happening at all, it is definitely a global standard. In terms of who is ready and who is not ready, there is always this decision that operators make, which is, what is the use case, and can i afford to basically put in the that is required in order to deploy 5g basically put in the cap ex that is required to basically deploy 5g . That tended to be a discussion we have heard maybe over the last three years ago we would have heard that. Today you do not hear that that much. Most have committed to a 5g roadmap and they are in the process now of, how do i get this out quicker, how do i get it out before my competitor . There are a few not doing that, or there may be an option issue, meaning the spectrum isnt available, you tend to see that perhaps in india, for example, but operators are quite keen to move forward. Our problem is not convincing people to go to 5g, it is, how do i support this global launch, which is great, it is what we anticipated. Aaron we have a question over here in the front. Accuweather. We worked with qualcomm starting in the 1990s. Looking five years ahead, what industries do you think 5g will revolutionize that we do not hear much about like medicine, some other kind of businesses that are really important but we dont hear much discussion about . Steve sure. So, i think logistics, traffic flow, fleet management, how do you move things around securely in big cities . 5g is really tailormade to that, really. We have always believed that health care had an opportunity by having secure communications. This whole issue of, how do i validate that the medical devices that people take home ,ith them are secure enough and i would say, authenticated, so that i can make a medical decision . Probably less of a technical , how do iore of a sold the legal and regulatory that . Associated with should we do that, it will be a tremendous opportunity to both improve lives and have economic value. Education i think will be significant. But really, people are trying to figure out is, i have infrastructure, or i have people, i have fleets, if i was a way to control them and make decisions about the data to generate realtime, i can optimize my business or i can even generate a new business. So, very small example. Back in the early 2000 timeframe, qualcomm had all the technology that was required in order to do position location. What we were thinking was that 911 andu could go into find people if they had some sort of emergency. Very small technology. It had a phone position , location, the ability to be connected to the internet, and that very small innovation created things like uber, and just tremendous Business Model innovation. Today with 5g, we are creating more Technology Change in bigger industries, and i think that innovation, which qualcomm it night but doesnt actually do, there will be tremendous winners and losers, at a global scale. That is the reason the company is so excited about it. We often anticipate as the pie in the end. Ot aaron i have one last question for you. There has been a lot of consolidation in your industry. Not that long though you wanted to spend 40 billion plus to acquire nsp, then the biggest tech merger ever was proposed. Then, the former ceo of your company talked about taking qualcomm private. None of those deals happened. So is there still something out there that you would like to see that qualcomm would acquire . Steve i think there is always opportunity. We are focused today on driving 5g, and i would say im a also driving the opportunities that we agreed with apple on, which has a pretty good rep. There is always opportunity to participate in the consolidation. We simply have a unique funnel of opportunities. The question is what we need to derishthat to th the those opportunities. Aaron what do we need to add . Steve everyone tries to ask me that. But you can see the type of industries and things that are important. But i think we have a very stable and strong roadmap for the next year is that i think we need to operate on. Steve thank you. [applause] hey, everybody. Our next guest is a tech veteran , experience in Companies Like and working with the obama administration. These days, she wants to completely change the field of software engineering. To dr. Asked about how she plans to make that happen, please welcome imogee miller. [applause] thank you. How is everybody doing . Today, i want to talk to you about a. I. At the frontier. Before i do that there is a classification i want to make. When i talk about artificial intelligence, what im after actually talking about is a blend of Computer Science and statistics at the aid of humanity. We use this information to build inference and decisionmaking systems. I am sure many of you have heard about the africa rise in narrative that has been going on for a couple of years for the past half decade. I was originally born in nigeria , and i am a nigerian living in San Francisco. Ims, we know that most of the worlds Fastest Growing will be coming out of subsaharan africa. Billionts 1. 2 population is under the age of 25. At the end of the decade, africa will have 90 cities with a population of at least one million. By contrast, the u. S. Has 10 of those cities. Of theatistic is one most interesting to me, it is the home of half of all Global Mobile payment users, that is 120 million different people using mobile payments. When i talk about Machine Learning at the front year, i am not talking about the frontiers of the Machine Learning knowledge it self, instead, i am talking about deploying planetary scale inference and decisionmaking systems in a frontier environment. And i think of a frontier, i usually think about the American West before the pacific settlement. Ae environment necessitates kind of innovation to make life work. America innovated so many Different Things that eventually led to the creation of Silicon Valley. We are at the edge of another kind of technology frontier. Not inme around, it is San Francisco, it is happening in africa. Same conditions that necessity to a different kind of technology innovation. One of the most interesting things about this planetary scale inference and decisionmaking systems is that you dont even understand their power until you travel. Last summer i went on vacation with my family to kenya. We arrived at the airport, and immediately at the airport, we went a few doors down to safaricom, and i got data access on my phone. I didnt think anything of it. I went to my phone and looked at the app and i was very surprised that i was being offer some ed some limited amount of Financial Services immediately. The system had decided that there was enough data about me to be able to offer me these kinds of services. I was rather intrigued. Uber, my phone called uber took me to where i was going, it used Food Delivery Services to get me to the house, and edited that with the same Technology Habits that i am used to in San Francisco, in nairobi. What struck me was we then went which is on the border of tanzania. To get there, we went through all these small towns and villages. The interesting thing about that drive was really seeing how far deep technology had fully penetrated. We are talking about very small villages, and yet, you can still use mobile payments. I realized there and then, that this transformation will drastically change what the continent looks like. One of the interesting things that has immersed in that kind of Technology London is is, for example, what do you do where there are either no roads or bad roads . One of the solutions is you can take to the air. There is a company out of San Francisco called zipline. They have created a very innovated logistics solution. What they do is use drones to deliver blood to laurel africa. To rural africa. Villages that cant get blood fast enough because the roads are bad, so you can just use a drone to drop a package and someones life is saved. These are the radical Technology Innovations based mostly on data and Machine Learning, that we are seeing being created in the african environment. I want to end with an Interesting Data story. , andmonth, i want to lagos we went because based on our and will report on the behaviors of developers and our platform, we realized that nigeria was one of the countries with the fastestgrowing rate of Developers Using open source. We went there to see what the developers were up to. We used data to inform us of what we should do. We decided we would have an open source mixer. We went through our data and invited the top 50 contributors to come to our event. The event was an amazing event. What was interesting about the event was at everyone in that room earned their way in through their work. It didnt matter who they were, whether they were born into affluence, poverty, what they mattered what mattered was their work. Even i, a person who believes in datadriven approaches, had never really seen how powerful it was. He brought all these people together, many of them who didnt know each other, built a software that many connected through our data. This data is the power of all of us through each of us. Thank you. [applause] thank you so much. Will move on to a crypto burst, many of us rode off crypto currencies for good. Our next guest will discuss with her black Chain Companies will emerge from the crisis of confidence and how they plan to get ahead with big ideas. Please welcome joe lubin, and dominic williams, with fortunes jen. [applause] ok. Thanks for being here, guys. Thanks for having us. Lets do an audience poll. Who here owns cryptocurrency . Ok. A bunch of hands. Who here is thinking about buying cryptocurrency . Ok. Everybody who owns it. That is a pretty even split. Nobody else who doesnt is inking about it. Just by way of introductions, dom, you are calling yourselves the internet computer, the centralized Cloud Platform that relies on blockchain, where you have servers across different data centers, so it is sort of a decentralized data center. And that is part of the foundation of what youre trying to do, disrupting these being tech giants, whether that is salesforce or linkedin, you are talking decentralized versions of these big social Media Companies or amazon Companies Like that. Joe, you are cofounder of ethereum, you also run consensus, a Blockchain Department company. Right now it is the second leading cryptocurrency. Ethereum,started if ever you hear a lot of people talking about disrupting banks, tech. Was that part of it when you started your company, a different kind of facebook or a different kind of google, how did that play into your vision . So bitcoin essentially invented a couple of things. It event vented this nextgeneration decentralized database and something called crypto economics, and a token that via mechanism design and crypto economics would incentivize people to essentially create money that was for the people, by the way, build an that maximally decentralized trust system. So in 2012, many people came along and said that we should be using this kind of database infrastructure for everything. Was born, andreum rebuild essentially what we then called the world computer, and many of us have built tools and infrastructure and have been building in different verticals to us actually do some of the things that dom is intending to do, where we do go after these Major Services on the internet. But it is also much more than that, because we are bringing a new trust foundation, we are looking at a global settlement layer, and we are able to build a new kind of financial plumbing where we can issue essentially billions of dollars worth of Digital Assets on that platform. Dom, the idea of an internet computer, we already have the internet, we heard have amazon web services, we already have ethereum, why do we need an internet computer . Dominic so, the internet computer is reinventing the internet is a computer that can host and run secure software with sweat of a range of superpowers. And run secure software with a range of superpowers. And these address problems, major problems that are stalking tech today. So, it is intended as a complete replacement to a 3. 6 trillion legacy i. T. Stack. And addresses major issues such as the difficulty of creating secure i. T. Infrastructure. Addresses the difficulties we have with the monopolization of the internet today and provides a platform to create a new breed of open Internet Services that will provide a better platform for innovation, entrepreneurism, investment and so forth. Decentralization, to create a decentralized version of some of these huge tech companies, is there any evidence that she bash a decentralized organization, you might even call it a company, that it could rise to that level of dominance . The only one a can think of is wikipedia, and it is not even competing on the same level. Don the most powerful force in tech is Network Effects. The increasing monopolization of the internet is driven by Network Effects. One approach to deal with that increasing monopolization of the internet is to bring in antitrust regulation and try to break up big tech. The internet computer provides increaseative means to decentralization of the internet by providing a platform for the creation of open Internet Services. An open Internet Service you can think of as being something roughly analogous to an open source project where the service itself has an independent existence and is managed by a decentralized government system. All, these things provide a means to address critical Platform Risk. Harbingerring of what was to come was zinger. They were a very successful company. Facebook changed the rules and a few months later they lost 80 of their value. Scroll forwards to today, 18 of the last 22 tech ipos mention Platform Risk as existential filings. N their s1 problem is, if you build on a apis, if you build on top of big tech, and you are building on sand. You just cannot trust it. For example, hundreds of startups a few years ago had their access to linkedin revoked. Open Internet Services provide a way to create, for example, open whatsapp, open linkedin, open salesforce, taking linkedin for example an opening it would become part of the fabric of internet itself and would it were to guarantee that its apis would never ever be removed or revoked. So that entrepreneurs and investments wanting to build new Internet Services that need it to incorporate business profiles can securely built on top of open linkedin. This will create a kind of neutralized Network Effect which will drive the development of the open internet forward to very rapidly. Who is going to build . The idea is to essentially build on protocolbased open platforms. If you are building on facebook, you are building on a platform that somebody else controls, and they are probably, towards the end of their monetization cycle, they will probably and up having to eat your lunch. If you are building on tcpip, which is a protocol, then you can be relatively certain that that is not going to shift from under you for competitive reasons. So, web 3. 0, which will be the evolution of where we are right now, web 2. 0, will be lots of decentralized open platforms. Platforms like ethereum, platforms like definity, platforms for decentralized stores, decentralized whatever. Decentralized bandwidth, decentralized identity, all these things. We can have the governance discussion soon. All these things are currently contemplating massively decentralized governance, and that plays out in a lot of different dimensions. Is there a Business Case to decentralize things . If you are dissent and last, you dont have a ceo, it is only a company, is it on the nonprofits who can do this . No. With this New Invention called crypto economics, enabled the issuance of a token and effective mechanism design so that lots of Different Actors can pursue their selfish interest, perform different roles, and achieve the goals of the system. So you can achieve decentralized governance while still enabling people to pursue their own interests. Can you make money doing it . Absolutely. Put it this way, if you are an entrepreneur and you wanted to build a new Business Service that needed to incorporate business profiles, would you rather build on top of closed proprietary linkedin, we havent even got the choice anymore ause it is already closed api access to have linkedin, but let us say that prior to closing, linkedin still provided api. Who would you rather build on . Closed proprietary linkedin, or open linkedin . That guaranteed that your foundations were solid and would never revoke your access and break your service, as linkedin did to hundreds of startups . What would you rather build on . That is the reason the open internet will succeed over the closed proprietary internet. And normas of engineers are leaving Companies Like google, facebook, ibm and microsoft probably because the technology is very interesting, but also because they believe in taking the internet back to its roots, creating an open platform. Movement, partly represented by the success of things like ethereum, and it is not going away. It is pot of a major transition to a different model. I will come to questions in a minute, so get them ready. I want to talk a bit about thereum, because it is second leading cryptocurrency, which had this terrible crash, crypto winner, all of that, started to bounce back this year , bitcoin is up about 160 , ethereum on the about 60 , hasnt had the same bounce back that bitcoin has. I know that you are planning to launch ethereum 2. 0 early next year. You also have some restructuring some headcount reduction. In terms of scale, is it a technology that could rise to a level where it could replace these huge platforms like google, and amazon . Jessica it is fair to say that ethereum is the second largest cryptocurrency if you only look at that dimension, but it is by far the largest block chain ecosystem, if you look at the number of developers and projects that are building on the platform. We have skilled in or mislead, even during crypto winter. Many of the people who ethereum platform, some of those projects worked out well, many of them worked out quite badly and a lot of the speculators have fled. Some of them are coming back at this point, as we have seen. But all through that, the technology and entrepreneurs that have been drawn into the ecosystem have stayed. Once you see the value of decentralization and Building Systems in different ways, you cannot unsee that, you cannot really go back to building on web 2. 0 architectures. Through that period, our ecosystem has grown enormously. Throughout that period, enterprise usage of our ecosystem has gone, grown exponentially. So, we have seen even on a transaction basis, the hit on ethereum is it can handle around 20 transactions per second, but that is layer one at the base trust layer. At layer two where we have many technologies that anchor into layer one, we are seeing hundreds of thousands of decentralized transactions coming online on exchanges and games, et cetera. Scalability is here and it will be here in spades we release ethereum two, which gets started in its release early next year. Any questions in the audience . Do we have any . I see a hand in the back. Yes. Hi. I would like to hear a little bit more about governance, which you alluded to but did not explain. If you are ace of decentralized governance how can you build something that will take on google and facebook . A lot of people say it is dysfunctional. It takes years to create basic scaling. And what exactly will you do to put in a governance structure people can understand and possibly participate in . The theory of decentralization is a very powerful one but it does require good covenants, like Everything Else on the planet. As we would all agree, governance is difficult. Governance of decentralized platforms is a new thing we are trying to figure out. I feel like the Ethereum Foundation governance has been excellent. I believe that we launched an unprecedented platform and about 1. 5 years and had continue to improve it and have pioneered an architecture that will scale it enormously. And essentially end up being a base trust layer for the planet. Governance on the ethereum project is from from affinity, different from polkadot and that we are focusing on having lots of Different Actors in different roles who are all incentivized platform better, have voice, and i like the idea of more automated governance. There will be governance by token votes, and we already do some of that. But there are projects that are contemplating building layers and layers of governance of these platforms. And i think it is going to take years to figure all that out. Ethereum will do the same thing. Prudently. But even without that, i believe that many Different Actors all committed to improving the platform will be able to challenge the big entities who perhaps have a smaller number of highly incentivized actors and as we get the layers of governance right over time, it will be a foundation for many kinds of systems on the planet. Yeah, so, the internet of course has governance organizations, which give ip addresses and so on. The internet computer has automated governance systems that serve both to ensure the internet computer network, which is comprised from independent data centers, remains open. It is also a key part of the means we use to address risk which is important. With respect to the second part of the question, how can we compete with giant organizations such as google and facebook, the definitive foundations strategy is to apply enormous resources to rnd. Although it is not a profit organization, it really uses the Silicon Valley playbook. We have more going live soon. Researchers and engineers, and using the best Engineering Research practices we can to deliver internet technology. In that sense, although it is notforprofit, we work in exactly the same way. And indeed, we have been successfully hiring some of the very brightest and best from places like google. With facebook, if they wanted to they could ban someone from the platform. With google, they can ban from the platform. What do you do about bad actors . What is your power what is the networks power . That is the difference between the internet computer and ethereum. The internet computer does have, the network has an onboard important open governance system and capable of neutralizing bad actors. The debate about whether that is a good or bad thing, perhaps bad actors should be tolerated. I would not want i do not have a Firm Position on that. But we do have the technological means to address that. From the start the ethereum project assumed the vast majority of apps, transactions on the network would be valuable because they would be between significantly identified or fully identified actors. We have built infrastructure that enables us to issue Digital Assets in many Different Countries with full identity checks, aml, kyc, et cetera. So we are bringing identity and representation to these applications. But it is a deep, philosophical issue. Yes or o . Or no . Should we have a base layer that is permissive list or one that is essentially sensor herbal sensor abode by government actors . Sensorable . We will have to have the discussions and 50 technology in with their belief systems. Your personal beliefs, yes or no, bad actors should be tolerated, yes or no . That is a difficult question. I would say generally no. But who defines the bad actor . That is all the time we have. Thank you both so much for being here. [applause] ok. Our final guest this morning is an air force major was appointed last year as a white house fellow serving in the White House Office of science and technology policy. He is also an inventor of three u. S. Technology patents. We are so fortunate to have him here at brainstorm tech to share insights on how the u. S. Will stay ahead when it comes to Transportation Technologies from commercial drones and Autonomous Vehicles to supersonic flight. Please welcome joseph, with fortunes adam. [applause] , thank you very much jen. Welcome, joe. And thank you for all of you for sticking with us to the very end. We are very excited you are here. I feel like we are very far apart, so we will have to pretend we are closer. So, a couple things. Joes boss was supposed to be here but he had something, very legitimate reasons soething joe has some very specific policy areas he is responsible for. So i will not ask him to speak for the Trump Administration for anything beyond those policy areas. I just wanted you to know that. I appreciate it. I also wanted to tell you, joe is an activeduty air force officer and a policymaker in the white house. So if there is a lot of jargon that comes up, i have encouraged him to use that jargon and explain it to us. So start off by telling everybody just a little bit about your background. I started as a techie. I was a Computer Scientist at stanford. Then i worked in Silicon Valley for a couple years for a Company Called aol in the old netscape building. I was a software engineer, worked on a lot of emerging technologies in the 2005, 2007 timeframe and was looking for an opportunity to serve our country, to work on policy at the government level. I ended up leaving Silicon Valley to join the air force. So i have spent the last 10, 11 years in the air force as a pilot. I fly a large cargo airplane. We fly all over the world including combat in afghanistan and iraq. And fortunately, this year i was given a very excellent opportunity to serve in the white house in the office of science exec policy. My policy area kinda borrows from both my Tech Experience and from my experience as a pilot in the air force. I lead our advanced transportation portfolio, which includes, Unmanned Aircraft systems uafs, Automated Vehicles, supersonics, and then this concept of urban air mobility, which is really the future of transportation in large cities. Great. Uaf is the policy area that you described as being the furthest along. So, tell everybody what the white house is doing by way of talking about what this will look like, what drones will look like in the United States . I have been in aviation for a long time and watching the Drone Industry explode has really been mindboggling, honestly. The speed at which that is happening. So in the 2016 timeframe, regulators were thinking through, how are we going to enable operations of these types of vehicles in our National Airspace system, with other traffic, overcongested areas, et cetera. I think as they were working through that, they kind of realized, well, we do not really have any data that would speak to how safe are these, what kind of performance characteristics do they have, can they safely fly over large populated areas. Tbd on that. So, we kinda were thinking, how can we get data, but more importantly, how can we get data with a local context . So, flying a drone in San Francisco is really just a different operation than doing so in rural oklahoma. Regulators at the are not necessarily to make all those decisions to affect all those different parts of the country. So we created this Pilot Program called the uaf integration Pilot Program, or ipp as we call it. The idea it was to use publicprivate partnerships between state, local, and tribal governments with private industry to work through some of the different drone use cases in various communities across the country. So we have nine participants of that program. They are exploring use cases from pipeline inspections, to delivery of medical devices, Law Enforcement uses. And the whole point and idea of the program is taking the data from those various localities and bringing them back to the faa so that we can make rules applicable to these aircraft. When you say participants, these are companies or entities, or locations, or what . Is a Government Entity. Could be a city. Chopsaw nation is one of them. San diego is another one. And they have partnered with a private company that has a particular use case that would be relevant to that area. And they can explore different parts of the policy areas in the different cities. So it was a competitive process to select those but was managed mostly by the department of transportation and the faa. But we are about one year to that program we have already seen an explosion in the number of different types of use cases. The faa has made some movement on regulatory action as a result of the program. Just recently about two months ago, we released a notice of proposed rulemaking on uas operations over people and at night. So, prior to this rule, and as it sits today, because it is only proposed, those operations are prohibited unless expected by the faa. They would award exceptions and some circumstances, but the majority of the waiver operations they would give wherefore over people and over were for over people and at night. We are now freeing up resources to work through more complicated use cases like, well, what about the on visual line of sight. Right now flying a drone is like flying a kite. You cannot legally operate it if you cannot see it. However, the faa is now working through waievrs and through waivers to make that happen. You are saying all drone flights that the operator cannot see our currently illegal . So, unless ecepted excepted by the faa. And they had been issued in some cases. When they consider whether or not we will accept a rule, there is a lot of information and data that the vendors to provide to really allow the faa to accept some level of risk. So, beyond the visual line of sight there was a time some of the waivers that were approved would require chase plans. To fly your drone beyond visual line of sight had to have a manned aircraft flying with it. You know, that is not in most economic approach, i would say. But when it comes to safety, everything in airspace under most circumstances is see and avoid. My hunch is hobbyists are violating this law every day. Is that a correct assumption . I think that is a fair assumption. So, i would say you have the criminal and the negligent. And i think most of the concern that we have right now is really around the negligent. So, that maybe takes me to points of counter uafs, which is another policy issue that we are working on from the white house as well. In the last bill from 2018, we lobbied very hard to get additional authorities for department of justice and department of Homeland Security to be able to identify, track, detect, and in some cases mitigate drones that are operating in areas they are not supposed to be operating. Previously only dod and department of energy and those authorities. So, Congress Worked with us and that is what we arrived at. But moving forward we do not necessarily see a federal response every time i drone is flying somewhere it is not supposed to. We would like to see that expanded to state and local as well. It is interesting you are talking about an area where the law currently is not sufficient in your opinion because the law did not anticipate this. Well, first i want to ask you, put on your pilot hat for a moment. How concerned are you as a pilot about drones . I think your policy outlook is about how do we make this work commercially, and it is an exciting new field. But how concerned are you as a pilot . As a pilot, honestly i am not that concerned. If you think of the types of operations i would do as an air carrier or a large aircraft pilot, most drones, its 400 feet for drones, and most dont operate above that. And we are going to land in about five seconds. So i am not concerned. That being said, this is definitely something that we need to work towards. And i will bring up another policy thing we are working on. That is the concept of remote id. Right now i could download an app on my phone, point at the sky, and i can see all the airtraffic and say that is southwest flight number x, United Airlines flight number y. You cannot really do that with drones because they do not emit. They are not required to have transponders, they are not required to record position. That produces a little concern from the government side but also Traffic Management side. What happens when there is a lot flying around and we dont want them all hitting each other . Remote id is what we view as the foundation of enabling this new industry. I assume remote id is something the faa can do through rulemaking . That is exactly right. They have been working on it. The eta for that is the end of the year. Can you talk about one of the companies that participated in this Pilot Program . Also, is the white house involved in the global conversation . I know zipline is doing things in africa, but also in the u. S. I think. I would probably avoid talking about any specific company or endorsing any specific action there. But what i would say is that each locality is working through very different use cases. I was just out at oklahoma at a drone counsel they had with my boss. The use case they were working on there was debatingferal hog traps. So, they are working with a Consulting Firm that provides, manages, and practices packages the drones and operates them anyway that gets past this problem. I was not aware that was an issue that drones could address. But we watched a demonstration. The drone flew in. It could be either geotech, or think they were using qr cods to identify the drop zone when we went and looked at it. And just like as advertised, it drops a bunch of feed into the hog trap. So, i think that just really goes to how interesting, exciting, and honestly successful this program is, because it is getting folks to work through use cases that none of us would have imagined. You put that in the who knew category. Another policy you are working on really surprised me because it was in the back of my conscious that we are still interested in commercial applications of supersonic transport. The concorde went out of production and commercial flights many years ago. Why now . So, it is really, honestly, the industry has kind of spurned this renewed industry. There are a lot of Companies Working on this now. Lockheed just got in. They are also working on the x59 demonstrator with nasa. The industry came to us, and they had a renewed use case for how these jets are going to be successful. Obviously for concorde, there are a lot of issues with concorde and terms of noise, pollution, cost. The Business Case didnt really close. I would argue in today, propriety airplanes with that level of pollutants probably would not be accepted by most communities. So, the industry now is taking another look at it, with the benefit of almost 50 years of research and development in the subsonic category that made engines more efficient, noise standards more stringent. So, that is kind of what i would say started this. Our view is not to decide winners and losers in terms of, is this going to be a successful new area. It is more to enable testing and Market Conditions will dictate that. You have a policy viewpoint. The white house is taking the time to work on this. So the viewpoint is we think this would be a good thing to come back in a commercial sense. A good thing for her to come back in a commercial sense, but also aviation, when you think of r d and aviation, research and development in one particular area is a lot of applications in other areas as well. So we would expect that spurning, getting more research and develop going on in the supersonic space is actually going to help the Aeronautics Industry as a whole. It might even open our eyes in terms of what is possible for the future of transportation. I know you said you fly transports for the air force. Have you ever flown faster than the speed of sound . We never fly supersonic intentionally, so no. [laughter] would you like to . Oh sure, absolutely. Not in a c17 though. In a plane that is built to fly supersonic. Will quickly real quickly, you used the term urban air mobility. I think that means air taxi. Companies like uber are developing things like this. Is this a real thing, or is it Science Fiction . The answer quickly is it is very real and that is coming. I think of small uafs as phase one and there are multiple sub phases with small ua f we need to get through in order to get through a success there, but in terms of what is next i am thinking larger uass, passenger carrying, cargo carrying, and that really gets into the realm of the vehicles thaqt uber and others are working on. Our view is more of its an ecosystem. When you think of urban mobility, it is not just the airplane. So, electric vertical takeoff and landing is predominant airplanetype in considered, but there is additional infrastructure that comes with that. Where will they land . Some of them i met with a number of companies in the space. One of them told me that these vehicles when they go to recharge his lovely drawing the current of an average grocery store. And infrastructure may not be able to support just plugging in a grocery store. That is something we need to think about. We are very active in this space. We are working on the small areas first. Nasa has an urban air mobility grand challenge where we have been working with them on that. I would not say we will be seeing this this year or next year, but i think it is definitely on the horizon. In a scientific and policy be theth the standard same standard the faa currently has for airplanes . Absolutely. To be honest, i have a lot of companies from Silicon Valley that come that are working on these vehicles. They come and ask, how can we get these flying . The very first question i have for them is, have you talked with the faa and are you familiar with the certification process . Our view is the existing faa certification process under 23 is sufficient to address a lot of the new categories of airplanes we are seeing. This is where i would probably lean on the community for little bit of help. I left the private sector to come work in the government. And i think we need in some of these areas, we need more folks with government experience working with private Sector Companies to kind of help understand the realities and it comes to aircraft certification, operation certification. That being said, we can get there. Something i am really excited about was googles wing, which was essentially a Package Delivery element of the ipp they were going to start doing operations in virginia. They received a part 135 operation certification, which basically means they are a small air taxi carrier. They comply with the same requirements that small air taxi, if im going to go to las vegas, if i am going to fly a tour helicopter, that would be a part 135 operation. There are training requirements for pilots, Maintenance Requirements for air currents airplanes. And they got the certificate. We have time for a couple questions. So, if there are none the one thing we have not talked about his Autonomous Vehicles. This is a huge interest in Silicon Valley. In talking about what you Pay Attention to, you do not lead with that. Why . Autonomous vehicles i think are little more complicated. When we think about the aviation issue, for example, the way the faa likes to couch regulation is we think about the airmen, the airspace and the aircraft. And we have to come up with rules that address all three of those things. And in the Autonomous Vehicle space, so, with aviation it is all controlled by the faa, so it makes it relatively easy for them. In the Autonomous Vehicle space, some elements are controlled by different state and local entities. Airmen, drivers licenses for operators are issued by the states. The vehicle is federal Motor Vehicle safety standards. Then the airspace, which equates to roads, different players there. State, local, and federal. So, i think it is a little bit more complicated. And for that reason i think we need to do a little bit more research before we just integrate Automated Vehicles into our road systems, much like what we are doing withuaf. With uas. Dot has been taking the lead on this. They built on 2. 0, which was framing the discussion in terms of safety. In ad 3. 0, they call for nifta, which is largely responsible for certifying these kind of vehicles, to think through, how are we going to have to change our certification for these to work . And i will use an example. A vehicle according to them that may not necessarily be the case if there is not a person that needs to manipulate the steering wheel. But the way that nafta nifta has written the rules, that is how it is been. Faa is more performancebased. When i went to fly the simulator, the airplane had no front windscreens at all. Just lcd screens tied to cameras. That is kind of the difference between performancebased and specification. Instead of saying an aircraft much have a wins must have a windscreen, it might be how the pilot can see unobstructed. So, you portray a policy situation where drones are less complicated from a policy perspective. Is there a sense in your office that maybe one thing the white house can do would be to try and make Autonomous Vehicle policy regulations less complicated . Yes. So, we are working through what our policy actions would be in that space. It obviously requires coordination with a number of different entities, both in the white house, state, local and otherwise. National legislation on avs in some point in the future, i would not rule that out. When you think about it, we have to herds them all into one unified strategy. And that will take some work on our end. We have time for a quick question and quick answer. You talked about urban air mobility, and drones are generally under 400 feet. You have the future of taxis in the air. How do you envision some type of air control system as we look at traffic patterns and in the urban mobility space. Is that something you envision . Absolutely. Efers to that as you tm utm. Uas depends on the technology i mentioned earlier. Talk about planes that are mixing in with commercial traffic, helicopter traffic, where i get to think what does utm look like in that case . We hope we will get it right for small uas and then tackled that product project next. What will we see next, commercial ssts or level five vehicles . Commercial ssts. Thank you. Pleasure to have you. Thank you. [applause] justice rootsrt Bader Ginsburg delivers her remarks in little rock, arkansas as part of a special lecture series hosted by the Clinton Foundation in clintons goal of Public Service at 7 30 p. M. Eastern on cspan. Members of congress recognizing labor day with tweets. Republican congressman ben cline of virginia posted today we honor the hard working men and women who make up the fabric of america with 17 straight months of unemployment. Record all apartment unemployment and i know our countries on the right track and california democrat katie hill says a huge shout out to our american unions today. Unions gave us the weekend and and and child labor and establish the minimum wage. And speaking of that minimum wage it is once again time to raise the wage, that is why we passed a wage increase in the house. Your turn, Senate Majority leader. Former defense secretary robert gates, former House Majority leader eric cantor, and former white house chief of staff andrew card a