Hello and welcome to tonights virtual Commonwealth Club program. My name is read and im a Technology Reporter with the Washington Post and im pleased to be the moderator for tonights program, the historical importance of the transformation brought on by Artificial Intelligence and virtual environment. As we have seen over the last three months with the covid19 pandemic and with social media with the killing of george floyd in minneapolis and the aftermath , technology and online environments that every aspects of our life here tonight i am pleased it to be joined by two Silicon Valley pioneers to discuss these issues. William davidow and Michael Malone, their new book, the autonomous revolution reclaiming the future of the machines is out now and delves deeply into the revolution we are living through regarding a i and virtual environment and it can be purchased everywhere including bn. Com. A bit about tonight speakers, bill david, the cofounder of the earlier in his career he worked at intel and is credited with being one of the pioneers of hightech marketing. Michael malone Cover Technology for the San Jose Mercury news in the 1980s and remains one of the bestknown Technology Business journalists together they cowrote the influential book the Virtual Corporation today they are here to discuss their latest book and i must say its a great read. Before jumping in just some quick housekeeping, questions can be submitted for the guests via the youtube chat feature so post your questions there and they will be forwarded to me and then i will get to as many of them as possible. Lets jump in. Bill, want to start with you. You helped make Silicon ValleySilicon Valley, but in recent years you have written about how the Technology Industry has taken a wrong turn and in many ways hurting our world, economy, society more than its helping. What made you want to write this book and why now . Well, when i was with intel, what we were doing was i have come to realize childs play. What we were doing was tinkering with things, to make stoplights work better. We made Cash Register so they added up and then along came the pc. We automated spreadsheets and when you automated a spreadsheet , it when inside a business and you replaced something people were doing with pencil and paper or Something Like that, but the business stayed the same, and what i came to realize is that what was different about this technology was that it was transforming the form of our institutions so that if you look at it what we did is we automated existing form. This is causing the form of the institution to change, so a bank becomes an application on a smartphone. Then, i suddenly realized this had happened twice before in the history of humanity, once the agricultural revolution and the then the Industrial Revolution. What everyone was saying was, well, this is just another Technology Change only its faster and it isnt that. Is a transformation of society. Now, you call that change in your book a social phase change and as you said, its this rare and monumental thing, but whyd you call that a phase change and how is this one really different than those other couple of phase changes that you documented history . Phase change is an actual scientific term, and it refers to a mall the same molecule having a different physical form , so a storm cloud turns into a snowflake. When water goes through a critical temperature change, 32 degrees it changes form and goes from a liquid to solid. It obeys different rules. We use different tools when water pumps in pipes and our intuition about water tells us nothing about ice and on top of that and it comes as a warning with that analogy you know ice breaks pipes and ice sinks ships like the titanic, so if we dont deal with these phase changes it causes problems and while i came to realize that what was going on in society was a similar thing. Our institutions were changing form of being different rules. We werent using different tools and our intuition was sailing as thats great, and through this out to mike, but lets talk about the moment we are in now, i mean, as i mentioned in the intro when we have coronavirus we now have protests against Police Violence and racism in all of this together is doing a lot of things one is kind of accelerating the adoption of these technologies, i mean, we are here on zoom using zoom to post this very discussion, but its also kind of bringing to the four some of these issues of technology that you get to in your book. For instance ibm yesterday announced its going to pull out of the facial recognition business completely because the algorithms that they use are actually discriminating against people of color. Wanted to ask you guys, what do you think this turbulence will have on this technological future that you outlined . This is the type of issue that phase change brings about. You know, in other words, im going to switch the subject a bit on you, but its like privacy. Privacy, we used it to have a door that we locked and now privacy has a totally different meaning. One of the challenges, i think, that we havent Silicon Valley is that we are now at the point where we have got to be very conscious to the psychological and sociological aspects of everything we are doing. That was never the case in the past. Right and nice to have you back, mike. One of the things you both this handbook is the book is that we need to change the way we are looking at these things, i mean, were looking at the mall wrong, and how are we looking at this wrong, mike cracks. Phase changes societal phase changes are points of reflection. As bill said, you cant predict what it looks like on the other side. If you have only lived in a world of liquid water and you live on the equator and you have never seen ice, you have no idea what ice looks like. You wouldnt even know its water. You dont know how it will behave. It has different physical traits you wouldnt know that ice floats, so when we go into one of these phase changes we going with alternative reality that on the other side everything has changed. All of the rules have changed. Things may look a lot alike you know buildings and Everything Else, but theres a substitutional equivalence thats taken place and lets replace what we knew is fundamentally different. So, if you are herdsmen and you came across jericho for the first time you might not even recognize it was a human structure called a city. You wouldnt understand how the society was organized. You wouldnt understand anything , and maybe possible that you could never really crossover you know the jordan into this new world. We seem to be in one of these right now. We had another one in the 1700s. If you are working on the farm, and all of a sudden the factory started arising and you went to work in the city, completely new reality. Our senses and bill talked about this a lot is that we have evolved. Its such a profound change going on. We have evolved through the physical world where time has a certain speed, a certain scope, nature is not planned for us. Its not organized for us. We adapted to the world. The Virtual World is fundamental in different. It was created by companies in this design to focus on us, manipulate on as hopefully in positive ways, but its also managing us like a casino and we are biologically not even prepared for this new cyber world that we now spend half of our time in. You documented very well that some of these changes are already starting to look sort of dystopian and it doesnt have to be that way. You kind of say there are two futures we could have, the dystopian one in the utopian one look at the balance, i mean, lets take the Industrial Revolution. People left the farm and went to work in factories. We ended up with a dickensian world in the cities and child labor and you know the dark mills and all of that, but on the other hand Life Expectancy went up. Literacy went up. We invented new forms of health like hospitals and medical care, all of the technology coming out of the labs emerged during the Industrial Revolution, so we live did a little bit of both and how the scales are going to end up is still not determined to, its in our hands. Its more than just predicting the future, which i think both of you are pretty good at just a stone your track record, but its not just predicting it. Its trying to understand how we should the changes we should be making as a society right now to adapt. What can we do, i mean, we have all of these new Artificial Intelligence and algorithms sort of deciding 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 starting to happen. Not all of this stuff is great, so what we do . What are some of the things that we can do or what is a new way of thinking so we can kind of better adapt . Well, i mean, i hate to wave my hands, but im going to. I mean, its hard to believe that probably 200 years ago work was considered to be a curse; right . And now, we say not having work is a curse. Roughly a. D. Some odd years ago george kings wrote this future for our grandchildren, i forget the thing where he predicted we would 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. Its going to be a very different world. And there are things that we do that are monetarily valuable that have no social value. There are things we do that are socially valuable, but have no monetary value today. Raising kids. So, if youre willing to pay me money so that i can have child care so i can go out and get a job, maybe we have to think differently about these things and say raising children is so important that we are willing to pay people for doing things that are socially valuable that we never considered to be compensate about work and these are the kinds of issues we are going to act a deal with. I do not propose to know what the right answers are, but if we adopt the attitude this is the way we did it before and this is the solution we are going to apply to the future, i know that isnt going to work. My argument would be there could be a conservative solution or a progressive solution, whatever you want, but you have got to look at these things and say new forms are going to require new tools and new rules. You cant just say this is the way we did before, this is whats going to 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 and again, i mean, this Current Crisis just kind of highlights that phenomenon. I have been writing about this, google and apple and got together and they are essentially deciding how Public Health officials can use a Smartphone Technology or cannot use Smartphone Technology for their efforts to do do contact tracing. Apple put forth their own solution, so they are taking on a roll of these institutions that we have all agreed upon and voted on in the society and i just wonder, is this power they have a good thing and what do we need to do about that . You will note they all got richer during the pandemic while main street america got decimated. That may be [inaudible] one of the things that occurred to me in writing the book, but if you look at it, think about electricity. When we distributed electricity we created utilities, and then the application later was the lightbulb and we had all of the you know we had lots of different lightbulb suppliers or lots of different furnace suppliers for gas utilities. Today, we think about is we think about the physical communication layer as being the utility, but you cant use that layer without the application from the platform that sits on top of that. What has happened is that apple and google and facebook are, in fact, utilities now. They are functioning as private companies, so in the past we had the electric companies, and they were private companies and then we turned them into utilities because it made sense to only have one phone Company Supply everyone. We are going to have to talk about issues like that. When my mother was growing up in pennsylvania there were three phone companies and if your friend was on a different phone company you couldnt talk to them. It made no sense, so we created a utility so we would have one phone company. These are the kinds of issues we are going to talk about. Bill, do you agree with you on, amazon . I have different feelings about amazon and elon musk, but hes a very smart guy. You know the phone companies though had compared it to the empires that you write about now, they had a very narrow effect on our lives. These companies are doing everything for us, i mean, you know how does that create differences . Well, to me that is part of the big difference. I hear that we have antitrust laws and things like that, but and im not saying there is anything wrong with antitrust laws, but anti antitrust laws are technic of the past. May be we to look at these things differently, i mean, the reason for that is that also these are borderless institutions. They arent necessarily facebook or google are operating in germany, i mean, its not like so, they are an american company, but with this world reach and so you get into issues of how much what i would say World Governance 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, i mean, you had to have a gun and an escape car. Today, somebody steals 500 million, said adel steals 500 million and they are located nowhere. What . In a millisecond. You bring up an interesting question. Even in europe with antitrust laws are comparatively stronger or at least regulators seem to have more power or aggressiveness in going after these companies. There hasnt actually there have been vague signs, but there has actually been any sort of change thats created change in behavior of these companies, so does raise the question of how what governance are they beholden to and what leverage does Society Action have over these companies . Good question. We saw the nba you know curl up when there was a problem with china, massive investment. We know hollywood now will not make a movie thats negative about china because of the massive investments. I mean, we already see the effects and its changing what we are allowed to see them anyways. Fundamentally, i believe what i will call the Business Model of the internet. Legislation could change that. You know, for example if you gave me ownership up all of my personal data, that would change things dramatically. We had to own our own data. It just seems more and more apparent and bill has been a great advocate of that for years , but i think everyone is now beginning to understand giving up our data for free was a very bad contract. This is where i might push back the one area i may push back on this or prod this thesis a little bit because facebook is fond of saying you own your own data, you know technically you have a choice and we can use these services or not use them. So, that sort of value exchanges there. We have all decided we will give up some of our personal data, our privacy in exchange for the services, but i think privacy advocates would say you really have a choice. And do you really know how much you are giving up and where its going . But, Everyone Needs to use facebook and Everyone Needs to you whatever that platform du jour is. Will anyone really have the choice to not make that value exchange, to not sell their data . You see thats partially baked in to the algorithm. When we give you an example. We reduce the cost of one too many communications to zero. It used to be that you told me i had free speech and its written right there, you know, i can say anything i want. It turns out that its been one of the biggest hoaxes hoisted on society forever. I had all the free speech i wanted to, but no one listened to me and no one could hear me, so if i wanted to talk to a lot of people i had to go out to mass media or had to spend a lot of money, so free speech was expensive. Now, we reduce the cost of free speech to zero. 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 and when we reduced the cost of free speech to zero, we underpriced something that was extremely valuable and we created what i would call a tool for antisocial behavior, a proclivity to zero for antisocial behavior. So, there is nothing. It used to cost me money to send a letter. Theres no reason why email has to be free. Theres no reason why reaching thousands of people on the internet has to be free and 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. We have also made me 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 mike, former microsoft executive now head of the Digital Cities project at stanford and just as an experiment he had the tools to do tracing and he went downtown to palo alto and bought a stick of g