china feels about putin in another year. rose: we conclude with arati prabhakar. >> everything we are doing is harnessing technology to deal with the world that has this today, very interesting range of challenges. we talked about when darpa started, very much a creation of the cold war. today, of course, that's not the problem we face. it's the threats that we face. it's a multi-polar world. so, yes the future directions of nation states matters for our national security. where will china go? what's russia doing? what's happening with north korea or iran? those are questions but, of course, the chronic challenges of national security today are about violent extremism flaring up, its connections to terrorism. >> bremmer and problem problem when we continue. funding for "charlie rose" is provided by the following: >> rose: funding for "charlie rose" has been provided by the following: >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. rose: ian bremmer is here ab poundser of eurasia group. he recently joined "time magazine" as editor at large. publishing top risk reports and the main geopolitical developments to watch in the coming months. his list includes the politics of europe, russia, isis and the effects of the chinese economic slowdown. i am please today have ian bremmer back at this table. >> happy new year. thanks. rose: congratulations on the "time magazine" assignment. what's that about? what do you do with them? >> i will have to create a voice that can talk to a much broader constituency. we will see. i am going to talk about global catholics and hopefully people will react to it. rose: look back at 2014 first and tell me what came out of that year that shaped 2015. >> well rose: all of it. >> what came out of it were all of these dissparate headlines bringing geo-politics back to this table. it was a year we paid attention to ukraine, power politics more. we talked about all of the conflicts in asia the east china sea the south china sea. it was the rice of isis and the breakdown of iraq and assad staying in power and violence expanding in all of these places. political islam died. radical islam came up as a more significant force, yet it was also a year when the united states, the world's largest economy, got its footing and became robust. and if you look at this report -- rose: the most robust economy in the world? >> i don't see any united states here rose: what does that mean? >> on one thing, great things. you have oil going in to the low 50s today. americans doing well with that. and you have got a 5 handle on american growth in the last quarter. but you also have things happening all over the world that are very dangerous to lots of other people, also dangerous to americans directly and our intentions in playing a major role in responding there not so great. another thing you don't see here is there is no internal china risk. i mean we have gone through years where everyone said, china is going to fall apart. big political instability. what's going to happen? one of the most powerful effective leaders in the world today. you are looking in 2015, the two largest economies in the world the united states and china going, don't actually figure here rose: going in different directions. >> going in different directions. one direction they clearly agree on is neither wants to do an awful lot to fix other people's problems. rose: they agreed at least in part to look and address common problems, climate. >> a little bit yeah. do you want to go there? rose: rose sure. they made an agreement. they made china promise by 2030, that will be their peak year. >> this isn't -- rose: it deserves no attention that they walked out of there at least agreeing to something? the president is heralding it as an acheesement? >> when the americans and chinese wants to show they can agree. rose: they can get something done. you said today u.s. relations with russia are broken. china is charting its own course. the ties that bind europe are fraying. others proceed vail, hedging their plans and alliances in reaction to increasing geopolitical uncertainty. wow. where is the good news? >> the good news is what we just started with. rose: economics. >> europe is good news economically. rose: greece? >> europe, spain's new job numbers better than at any point since the financial crisis rose: the politics of europe in terms of nationalistic right-wing parties challenging it or because there is no consensus? >> both and the external. let's go to the point you raised. you asked me the you know employment in spain. rose: that's right. >> as a consequence, spain may be growing now. the economy is growing but the average spaniard isn't feeling it. as a consequence, a new party that didn't exist when we wroent wrote this 2014 podemos is not only the most popular in spain but is reasonably likely to get into government when elections occur in 2015. siriza in greece is likely to win in the coming weeks in greek elections. rose: if it wins, what? >> of course, as they get closer to power they moderate their position. they say they are no longer desiring to simply leave the euro zone and they are not going to default immediately, but the point is -- rose: they say they are not going to treat the debt with the respect it has been treated in past neg occasions? >> what have the germans said? we expect you to adhere to 100% of that deal. thank you very much. rose: and don't come back to united states for anything else? >> don't think about it. we can handle a greek exit which is not what merkel was saying three years ago. now, that's what she is saying. rose: what are the repercussions by greece from the euro zone? >> i don't believe there will be a greek exit, first of all. i think they will get right up to the line and as a consequence, it will be harder for everyone to borrow. you will see unravelling of many of the policies. europe will get weaker. it will be a place you don't want to invest. the euro will continue to slyide. that's different from saying it's going to implode. but the likelihood of this moving towards the british referendum for exit before 2017 is going up. there is no question. you said what are the other ramifications? externally when the euro zone crisis happened, we didn't have a russian crisis, this massive radical islam that was increasingly putting refugees on to europe's borders. now, we have that. so, the external environment is much worse as well. all of that is fine for the united states. it's enormus political pressure rose: as china, economic machine slows down, okay? 7%. as european economic forces are at work as they are oil prices going down as they are, i mean it's changing the global economic outlook. it's changing the balance of power as well. there are no signs the merging sxhooez growing at a great have any likelihood of gaining that will in the future? >> many will take it on the chin. all of those, particularly selling all of these comemodityies to china. china has been the biggest engine of growth for the past decade. certainly, they won't buy the way they did from the brazilians. it's a problem. rose: their plan is to create internal sdmand. their 5 year plan. we don't want to ex port the economy. we want to feed the consumer demand. >> no one benefits more from these prices in oil. he has bought 12 18, 20s months of oil prices rose: the lead column in "the new york times" maoists in chooiven give a new life bouyed. they pouncey on bloggers who dare mock their chairman mao. they scour newspapers for strains of western inspierdz liberal herecy and have taken down professors journalists and others being sdloil to the communist party orthodoxy. where is china going? >> not towards the "new york times." i will tell you that. the times has problems in china as you know. they might not keep their website. rose: that's because of reporting on some of the powerful families in china. >> sure and a general orientation towards western values the chinese don't abide. rose: what are they worried about? >> what are they worried about? rose: why are they threatened by western values? >> i think they are threatened by anything that they feel could unravel or cause dissent to the monopoly of political power that the chinese communist party has rose: about the monopoly of the party? >> sure. the chinese dream is we want you to get rich. we are going to help you get rich. hong kong, that's nots the chinese dream. rose: some say that's a philosophy of we will take care of the politics and we will let you make as much money as you want. >> the think that worries me is when putin and he get together, this is where they have commonalities, the fact that western political ideology reform is dangerous to them personally in their regimes. i do worry that even though china is much more responsible doesn't want to cause ruptions internationally tomorrow because power is moving towards them over the long-term yet the russian/china relationship is becoming real. it's becoming real. rose: what are the consequences or repercussions of that? >> over the long-term, the repercussions are creation of institutions that will undermine things like the dollar, will undermine american standards that have been global the ability to engage in a free and open internet, american companies to be able to enjoy a multilateral playing field that is competitive for private sector organizations. the chinese are the world's largest economy. they are trying to get a bunch of other countries to align with them bilaterally. so far they have countries like lao and cambodia to engage with them. who cares? they are tiny country these versus a big country, a country that hits over its wait geo politically but very small compared to china. that's interesting. rose: primarily energy? >> it's primarily energy, and that's not a great place to be today. yet as you and i have talked about -- rose: imagine a scenario of chinese/russian cooperation. what would it be? how would it play itself out? what might come out of it? >> clearly one thing that comes out of it is that the ability of the united states to punish or isolate russia for transgressions becomes nil because russia -- >> rose: they immunize themselves the russians do if they do what not chinese? >> if they do whatever the chinese would like. so clearly, that means provide them with a lot of energy at prices that would be more favorable to china, sell them even more arms than they have had, including those that are technologically advanced. russia already is the largest arms dealer for china. it would -- it would also mean supporting chinese positions in international organizations. rose: a page on international issues anyway? on iran? it seems when the security council comes up and russia is going to veto the chinese are there with them. >> it's interesting. rose: true? >> it's largely true. i would say the chinese would rather generally be able to abstain as opposed to veto. they don't like to do "no" votes by themselves if they can avoid it. i am talking more about the creation of otiations the strengthening of the shanghai organization as a counterweight to nato. the creation of the sillythe silk road over land organization that is meant to really drive infrastructure, that will make china stronger and clearly move towards internal eurasia. those are things that are inherently competitive to organizations like the imf and the world bank and -- >> does china want to become an alternative reserve currency of the world or some other alternative? >> they certainly don't want to be the reserve currency any time soon. the reason for that is of course, because they are not prepared to float the r and d bur they don't want the dollar to be the reserve currency and they don't want the americans to have the influence that comes with it. if they can fragment it, that's useful to china. the russians agree with that 100 percent. russians are more willing to provoke conflict actively to make that happen. the chinese, less willing. the orientation is the same. rose: with respect to the chinese, it was often said that they have not been an imperialistic power. history said that. >> yes. rose: not reached out to gain territory what the chinese kingdom was. is it possible that they want to expand in geography as well as depth of influence? >> depths of influence, i can take quite literally in terms of a lot of the territory they want to grab in the east and south china sea. anyone has ever looked at the 9-dash lionel against the vietnamese border, you see no one could imagine that that would be territory that china believes it could actually take or that it legitimately should have, and yet, that's precisely what they are arguing, and they are outgrowing the military at 15%, plus, a year that nobody in the region will be able to counter. so china right now is playing a relatively slow and thoughtful game. they don't want to provoke unnecessarily because they are focusing on their economy and doing so successfully. there is no question that over the long-term rules of the road for many, in fact, most countries in asia are going to change dramatically rose: if you wanted to argue about what leader in the world has served the interests of his country better than anyone else, is that an easy answer? >> the interests of his party, i think you could make that argument. rose: the country. building a stronger country. not building his own power base. >> i think it's dangerous. i think what he is doing is dangerous. i think that, you know he looks so much to soviet history and the mistakes that they believe were made by gorbachev and he did three things right. he did economic reform that they want to do glastnot. they don't want to do but he also see centralized power. >> didn't work in the soviet union because you had republics that were nations and they said we want independence. in china the country is so different. the interior of china has people who want to be led the way they have been led for decades. they want growth. if that means it's heavy industry and the smog is bad, well, so be it. if you go to shanghai or beijing, these are people that are living relatively wealthy lives and they want more accountability. they want more quality of life. they even want things like an independent judiciary because they are attached to businesses. they would like more intellectual property. i fear he has no willingness whatsoever to truly deceltyrant eyes power. i think he is doing the opposite. i think since he has come to power he has centralized power. rose: one way he sent tralized power is he has attacked corruption and some of his enemies have gone down and that's a positive. >> it en handle his reputation. i worry that risk version in china is going to create much bigger problems with their own domestic populations long-term but boy does it work well right now. there is no question. rose: tell me what mr. putin wants. what's the risk of what he wants in 2015. >> we know what he wants. he wants to maximize his influence both in his country and region. he does not want to accept being a leader of a russia in decline. and, you know, the news today with oil prices going down into the low 50s is the worst possible economic news for putin. the only thing that is supporting him in terms of popularity right now is his demonization of the united states and of the west. rose: that's popular? >> that's popular. rose: among the westernsids citizenry. >> across russia rose: does falling oil prices mean he has to do something to maintain his popularity at home? >> he is lashing out. i think he will do more. i think that it's very unlikely that he is going to back down from his occupation in southeast ukraine. his military incursions are going to continue. cyber attacks on american private institutions and the white house will continue and they are getting dangerous. they are getting dangerous. >> that's the interesting point. rose: we saw what happened as an example of power. espionage, cyber warfare. anybody you talk to in that part of the world, they say they are happening hundreds of thousands of times all the time against both government and private enterprise. >> you are right to raise the north korea point here because russia and north korea have some unfortunate similarities. they are both countries that hit tremendously above their weight militarily. they are both countries americans are trying hard to punish. the u.s. has no hope of isolating because the chinese refuse to allow it. the big difference, of course -- lots of differences but the biggest difference is that russia is a big country. russia has the ability to lash out and caused a lot of trouble if they want to. >> that's clearly true on sigh ber cyber but other ways as well wellwell rose: what's the chances they will move make steps to become a member of nato? >> they have gotten rid of their non-aligned status formally. i don't believe they will do anything else that is substantive in that direction in the next few months, but the fact that they have taken those steps shows a level of desseparation. they are trying to get people to pay attention to them. they are trying to get more economic support. their economy is falling apart. ukraine is the big loser here nobody really cares. a lot of people care, but nobody really cares. it's kind of like hong kong. we have these issues. and yet they are not fundamentally national security interests of the united states and no one else has coordinated to take steps. rose: before i leave asia, japan. an election general. >> ava. >> rose: more economics or nationalism? >> i would say personally, i think et cetera more interested in nationalism. that's what res on it's a more for him as a human being. as a politic, he is more interested in economics. >> that's a right thing forehim to do. i think asia is geo politically going to have a bit of reprieve because you have someone who is charismatic, focusing on the domestic economy and being successful. you have avi, just won his last election, focusing on the economy, being successful. i could say the same thing about modi in india t and until indonesia. four big leaders. we talk about security tensions. they are not going away but they are not going to be front and center this year. >> that's a pretty positive thing. i think japan is a big piece of that. abe said he is going to do a speech that will soften his policy in and japan's policy on the willingness to apologize for atrocities during world war ii. late but smart for him to do. rose: it is a problem for every neighbor who suffered from atrocities? >> south korea ians where i don't see the relationship with putin but he needed to do that for china. >> why is that so hard? they are right in japan that that threatens him? >> the media is in japan is overwhelmingly pro-abe. it resonates with the japanese people but if he wanted to move on this, he could have done it early. >> that's why when you asked me what resonates for him, personally it's there. he could have done it. rose: chinese are developing some sense of wariness about the north koreans? >> look. it's very clear that the cyberattacks that brought down the north korean internet such as it is, their 1,000 servers, could not -- they all run through china. those attacks could not have happened or been successful without at least some level of chinese complicity. all right? having said that the chinese, two days later, shut down all access for gmail in china. so, it's not clear they are happy with the united states punishing the north koreans. it's very clear for a while now the chinese have felt that north korea is a danger for them. i wonder if we are going to have this question about how china feels about putin in another year. rose: to say putin is irrelevant? >> he is annoying and dangerous and we kind of own him now because he is sort of our guy rose: he is a loose canon? >> we know he is. how much is china prepared to handle? they have no interest in any g-2 thing rose: they lost interest in that probably after 2008? >> i think if there had been some nacent interest if there was, it died. now they recognize the united states is a force to be reckoned with. they don't want a g-2. rose: isis. spelled beyond iraq and syria. >> that's right. the islamic state will not. in fact, the islamic state will be smaller and less effective but the reach of isis as an organization rose: the social media and the ability to articulate some message that is attractive to people in all sectors of the world? >> that feeds it. it exacerbates it but it's the economic weakness, again go back to $50 oil and the amount of money available for these governments to pay out to their people and keep some level of social harmony has gone way down. it's europe times 10 in that regard. and it's also the death of political islam. i mean during the arab spring, there was this belief, moderate islamists will be a part of new government. >> that's the way countries will be run. what's happened is the authoritarian regime doubled down and gotten stronger. the moderate islamists and the left islamists are gone. and instead, you have radical islam. he script is a good example of that rose: they would argue that isis doesn't represent islam at all. it maybe uses the rhetoric of islam but it doesn't represent islam and there is serious conversation constantly going on now about how this is islam against isis. >> that's what it is. >> that's the battle. i understand the fact it is useful to do everything to de delegitimize isis. there are people fighting for isis rose: is that an idea that isis represents islam? is that a growing idea or an idea that the more they do will more likely be in retreat and sharply defined as negative? >> i think isis reflects the support of massively disenfranchised people in the islamic world. rose: stay with that idea. >> that's what happened in the growth of the islamic state because you had disenfranchised sunnis in iraq, which is where it all began. they went to syria and came back and were disenfranchised because you had a shia administration in baghdad that gave them no resources? >> and no political power. rose: disenfranchised. it seems to me in iraq there was an awakening to that idea, a new government is much more aware of the fact that by doing the practices of the predecessor, the malaki government that they were creating their own hell. >> yeah. rose: other countries that are sunni countries are saying the same thing with this saudi arabia and are willing to go to battle for that. >> yes. i agree. but if you ask me: are we going to see more disen franchised islamists who find isis to be a mechanism for the expression of their their discontent and will we see them in yemen? will we see them in jordan? will we see them in lebanon, given massive numbers of refugees -- we have larger numbers of refugees than at any point since world war ii. 28 million? something like that? rose: no one has the exact number. but it's a million and a half from syria alone? >> more than that now. i think it's close to that rose: in jordan alone? >> over a million. you look at that. you look at what's happening in turkey, all of these countries and say are these people going to support a moderate path to goff earn goverance? larger amounts will take up violence rose: what's the response that has to be fashioned? >> there are so many, and they are not happening soon. one big response would be the support for education. one big response would be integrating these people into society. >> that's getting harder to do. thing about what happened in sweeden the most liberal response for refugees of pretty much any country in the world and the massive backlash that has occurred after you have seen the iraqis and syrians come over and now, you have a lot of covert and even some overt racism in sweeden a new swedish democratic party which is kind of a fascist anti-immigrant party that is working to change the liberalization of their policies. rose: i have more countries than i have time. saudi arabia versus iran. >> very related. here is a question where you said the united states and iranians are strange bedfellows of isis. i would say we are both fighting isis but not coordinating rose: by the end of 2010, will we have a nuclear agreement? >> no. rose: what are the consequences of that? will they be closer, therefore, to having the capacity to make nuclear weapons? >> my understanding from the white house now is that there is an acceptance of kicking the can down the road is okay. the reason why they gave them seven months for the latest extension because instead of three because buying time is a better place to be rose: not making great strides and these inspections? >> they are not. we have slowed down the rate of their appreciation of how many centrifuges they have at work. >> the iranian government sees over time they don't represent more of a threat that they can start to erode international support from sanctions. the china issue, but other countries i could see supporting that. what hurts them is the low oil price because they have less influence in that environment. rose: nothing initionisi-palestinian issues and the israeli elections? >> the other thing happening is the palestinians now feeling that they have no choice. they lost the latest security council vote. they have decided to go and apply to become members of the international criminal court. and that means that the israelis feel like they need to respond. they have cut off the taxes rose: not paying the revenue? >> that they have collected. and if that is not resolved soon, then the palestinian authority breaks apart and the israelis get to own it. rose: two questions. are you a friend of the turks? >> yeah. rose: i mean that. what does erdogan want other than more power and more authority? >> well, he -- you know him well. we have known him for years. he wants to be the next turk in a different way. he wants to be the historic figure. you look at the rhetoric. you look at the policies, the people he surrounds himself with the way he goes about it rose: the principles? >> he has done everything to move away from them in terms of cultural sensibilities and in terms of educational policy. what turkey's huge advantage is is that they have a diverse population. erdogan is making it a divided population. >> that's unfortunate. rose: i will bring it home at the end. here we have a president who knows he faces a republicannate senate and house who knows he has some executive action ex impose in terms of immigration, and realizes that he is in the fourth quarter. and he wants to be relevant. and the area where you could be more relevant than anywhere else probably is foreign policy. >> yes. rose: he's shown a little bit of that with respect to cuba. a bold stroke. what else can he do? what can the sglujs do? what can barack obama do? >> i think the single biggest leg he will have as president in foreign policy will be the successful conclusion of the transpacific partnership. 40% of the world's gdp united states and japan together forces the chinese to start saying: we don't want to be on the outside of this. it helps us to reform. >> that's a big deal. it's not as exciting as cuba in terms of the head lineslines, but we have talked about institutions that don't work right fragmentation. this is one that you are building something. >> that's a pretty big deal. i would love to say he could get russia back to the table and forge a deal on ukraine. i don't think he can. but they need to try. they have to try. rose: there is not much you can do with the chinese relationship that's not building -- being done. >> i think he understands the relationship needs to be managed. there are plenty of areas of cooperation. it's doing a reasonably good job. rose: the chinese are okay with him? >> i think they are okay with him. so many people have criticized obama from moving away from the pivot to asia but his best relationships are actually in asia. >> that's where he is most successful. generally the u.s./japan, the modi visit, more with the private sector but with obama as well. it has gone well. he just came. he was here about a month, two months ago. it was very good. rose: yeah. >> it went very well. rose: i understood is modi coming here? >> he was in new york and washington. rose: i meant the president going for the big celebration to india. >> you scared me for a moment i missed it. rose: you did not miss it. >> that's a historic visit. rose: that's right. with respect to this president, he seems to really want, i think, to do something about iran. >> i think he really wants to do something. rose: there was a chance. he no longer believes or continues to believe? >> susan rice doesn't believe it anymore. rose: she is not -- >> at best she is 50/50. she has gone pessimistic. the people i talked talk to in the administration think the window has closed. i think it's closing for the simple reason that it has gotten messier. what was great about the initial negotiations was that we were able to keep them clean. the u.s. and iran have plenty of problems, israel and ballistic missiles. rose: if you could pull off something with iran it seems to me that's a big deal. >> it is a big deal. but i think it's gotten so much harder. the republican congress has made it harder. there has been a push on sanctions. the price of oil is making it more challenging. the iranian government and the fact that they feel like they can get sanctions eroded if they wait it out, the fact that rhouhani has lost support and the fact when the u.s. gets together with iran, there are lots of other issues that are more urgent. isis is more urgent. rose: it's really worthwhile and it would be a big feather in obama's cap. >> it's not a disaster. foreign policy which had been such a disaster for the last year, you now at least have a couple of positive things to point to. rose: the eurasia group, top risks 2010, russia, china, slowdown isis, beyond iraq and syria, rise of strategic sectors. taiwan and china. turkey, red herrings, all of that in this report. thank you for coming. >> good to be with you. >> back in a moment. stay with us. >> arati prabhakar over darpa. it has played a major role in breakthroughs such as the internet, smartphones and driverless cars. it is pushing the front ears of robotics cyber security and brain science. i am pleased to have her here at this table for the first time. welcome. >> thank you. >> what's the next of darpa? >> break through technology for national security. we are the slice of the defense department chartered with that job and that traces back to 1958 when we were formed in the wake of sputnik. that was the surprise that got everyone's attention and one of the responses in the united states was to form this will agency specifically to prevent that kind of technological surprise. and my predecessors realized quickly figured out the best way to prevent surprise is to create surprises of our own. >> that's what we have been doing. rose: item me about you and how you ended up with this job. >> i was fortunate to come back to darpa. i came early in my career in 1986. i was a year and a half out of my ph.d. program in applied physics when i stumbled into an opportunities to come in as a young program manager. i was at darpa seven years, started one of the technical offices and went off and got to do some wonderful other things for 19 years. most of that in the private sector, but i never had as much fun as when i was at darpa. when i got the chance to come back, we packed up the kids and moved back. >> why has darpa been so good at what it does? >> this is a question i care a lot about because we want the 2 to make sure we preserve this organization's ability to do it's job. rose: is it strong? >> i think we are healthy. most important, we are getting the support we need to continue to do the job. you don't want to take that for granted. that's something that has to be nurtured. i believe that the seeds of our success are first in our mission because it's a very specific piece of this much larger eco system that makes new technologies happen in this country. we have this one job of breakthrough technology for national security, planting these early seeds and then, the track record that is an operating model that is a very small o 200 government employees, half of whom are technical staff and that technical staff which rotates through, typically through the five-year rotations through the agency they are very smart able technologists from the broader community sometimes from universities or companies, other kinds of labs. they come in and those individual program managers, they are the heart of the agency. they are the ones we look to, to create really challenging really hard problems that can be very worthwhile to go after and then to do the contracts, which is actually how i get the work done with the whole broad technical community. rose: what's the grand challenge approach? >> one piece of how we do work. some some grants, often to universities. for example, in robotics when technology has been bubbling along and you can see you are making progress, sometimes a challenge is a terrific way to really see what we have, and today, for example, we are running a challenge. we are in the middle of a darpa robotics challenge for rescue robots. we have another one that's challenging people to predict the spread of infectious disease, chikungunya in this particular case. and a third challenge that's a cyber grand challenge to challenge teams to build automated systems for cyber defense. rose: this is something you have said: if failure appears inevitable, we drop the effort, shift our focus in the recognition when one breaks on break -- bets on breakthroughs, one will sometimes lose. >> yes. rose: dry holes? >> they are. if everything we invest in works we are probably not reaching far enough. but what that means once you start down a path, you actually really have to be willing to stop it and be clear with yourself when there is a failure. rose: do you have a philosophy we wish they would pay more attention to darpa and less attention to some of these huge programs that are part of the pentagon budget? >> you mean the big weapons programs? rose: yeah. >> first of all, it is an ecosystem. our role is to invent the new ways of doing business that can give us huge steps forward in national security capabilities. historically, a lot of equipment that gets built to do that, it's been very powerful and we have been success as a military but today, it has gotten very large, especially the high-end systems, if you think about satellites or aircrafts. they have gotten big and slow and expensive. >> that's one of the things we are trying to change. rose: give me a sense of how you go about this. if someone says there must be a better way to do this, or there must be a way that we can leap-frog to get to a place where if we can get there, you know, we will have done something remarkable for the advancement of our mission. >> sometimes it starts exactly as you are describing when we hear from the military community or from the broader national security community about a grave problem a major challenge, that's something that very much informs our work. but we are the bridge to the technology work, and technology is what inspires us. so we are formed by national security challenges, inspired by what is technically possible. and our programs craft a way for technology to solve those problems. >> that's the bubbling pot of programs at darpa today. rose: robots and artificial intelligence, two subjects that were very interesting to me, as you know. are part of your effort? >> absolutely. rose: the connection to national security? >> everything that we are doing is harnessing technology to deal with a world that has this today, a very interesting range of challenges. we talked about when darpa started, the cold war. today, that's not the problem we face, the threats we face. it's a multi-polar world. it will matters. where there china go? what's russia doing? what's happen with north korea or iran? those are questions but the chronic challenges of national security today are about violent extremim flaring up its connections to terrorism and often to criminal activity. rose: and how do you play across those? >> we play across those dimensions. one example of work we are doing is on the network terrorism and touching into law enforcement. one of our programs in the big data arena is finding -- we are working with law enforcement and with their -- with our tools they are now starting to be able to find sex trafficking networks in the deep web. we are shining a light on things. rose: explain the deep web? >> it's part of the web that is not indexed by commercial search engines line google and bing. it's a small fraction that's indexed. when you do a search and you think you are seeing the entire web, you are only seeing what they happen to have indexed. there is a lot that is publically available visible but not commercially viable to index. and in that volume, it is a vast volume, but our new program is finding ways to do cores through that deep web and find linkages and patterns shining a light on in this case trafficking networks, but that's one example of a law enforcement activity that looks in this case like its link today national security concerns. rose: the rot robotics challenge? >> if you turn the clock back, a decade ago, we were doing the darpa driving challenges that led to the self-driving cars. >> like larry page? >> it's wonderful to see people pick up concepts and run with them. >> that's what we want to see happen. today's robotics challenge was inspired by the problems of fukushima. wouldn't it have been great if we had robots that could go into a facility and turned valves and cut holes in walls and climbed ladders. none of those -- turns out to be incredibly hard for robots to do those things today. that's what the challenge is doing t rose: is google in some of the experimental stuff, whether it's google x or whatever it might be, are they kind of public and private sector darpa? >> well, you know, i look at what google is doing. and to me it looks like every -- throughout the century the last century when corporations have the resources for research investment, they obviously invest for product development to extend what they are doing today. but those that have some sufficient vision and resources often will invest for new generations of technology. if you think back about bell labs and to me google's work looks something like the modern incarnation of that. i think it's a very important part of the ecosystem rose: only google or others? >> there are a few other places. the whole r & d ecosystem has been restructured. we don't have monopolies like bell labs. there are companies that are insightful enough to make those. >> what are we in artificial intelligence? >> that's a great question. it's like so many advanced technologies where simultaneously we are dazzled by what's possible and in some places we are nowhere. artificial intelligence that term has been around for more than half a century now. and in fact in our day-to-day experiences, we interact with the fruits of that research. so, you know, in some sense, even when you drive a car and the anti-lock brake comes on, that's a form of an al gorithim. when you do a web search think about recommendation engines, so many things we take for granted in how we navigate the world so those are huge advances algorithms that have been captured in code but it's great we've got that. we should keep doing more of that. we are doing more of that. you know where are we? where are we compared to what humans can do i think is a different question. rose: a long way to go? >> i think we have a long way to go because partly i think humans are amazingly adaptive and able to do things that we can't really -- i mean you, you know there are whole disciplines rose: as you know, people like i have a n muscand stephen hawkings said they are scared. should we be scared? >> i don't know if we should be medicared. first of all, i think if you are going to work on very powerful technologies, it is really important to ask those questions. i really want first to say that it is -- it's critical to do that, part and parcel of how we think about the powerful technologies we invest in. when we ask those questions, the question that is always foremost in my mind is much more about how humans are going to use this technology, you know, in the narrow national security context, how are we going to use it in conflict and against each other? more broadly how we live and work. rose: cyber security. >> vitally important topic for our economy and for our country and for our military because we need to be able to operate the networks that let united states do business. i think the thing that isn't maybe as visible in -- we talked about the internet of things. we see more and more of our world getting connected. our vehicles are part of the internet now. similarly, in the military, our military platforms are part of the internet. and they, too are vulnerable to an exploitation and, so some of our work there is, you know, the way we deal with cyber security today is patch and pray and we wait until there is a problem and put a band-aid on it. if we want to do more of it, we hire more people and run harder and faster. it's all we've got. it's good we are doing that. what we need is fundamental new approaches that are more scaleable than the pace at which the internet, itself, and the vulnerabilities that go with it are growing. rose: what is darpa doing in the way of brain development. >> we are interested in understanding the brain and building on this vast foundation of neuroscience that has been laid. our questions are: can we understand brain function in ways that will help us restore function? for example, by using what comes off of the motor cortex. we have a wonderful experiment where we have the first few clinical trials of volunteers who have had chips implanted on their motor cortex. from that, their neural signals control robotic arms so they can do things they were never able to do all of the time that they were paralyzed. beyond that, we are looking today at what probes in the brain that are placed for other therapeutic needs what can those probes tell us about the way that memory is transferred in the brain? can we use that learning to repair the kind of memory loss that often comes with traumatic brain injury? so beautiful science but our question is: can we now apply it to solve some major problems? >> do you have the resources that you need to do all that you need to do? >> darpa has been well supported. our budget is currently about $2.8 billion a year that runs about 200 programs at darpa. our budget has declined as defense dollars have shrunk in the last five or six years. but, you know, i think that's reasonably stabilized at this point. and most importantly, i am pleased we continue to get the support we need in the broad technical community, the administration, both sides of the aisle and congress. >> part of chris reeves reporting for cbs this morning. here it is. >> some of darpa's wildest ideas come from nature like their research on mini robots. this reminds me of an ant colony. >> that's exactly what it looks like. >> as armies of ants work together darpa wants to have armies of mini ronnots. the ghetto caught darpa's attention because of its ability to climb walls? >> it will looks like he is zooming in. they are actually about a half a billion points of contact. >> darpa created a gecko-like material that supports the weight of a human in this never-before-scene video a special forces soldier use did it to climb up a glass wall that could be used in hostage revenge u missions rose: thank you for coming. >> my pleasure rose: thank you for joining us. see you next time. for more about this program and early episodes, visit us online at cbs.org and charlierose.com. ♪ ♪ captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org >> funding for "charlie rose" has been provided by the coca-cola company, supporting this program since 2002, american express, additional funding provided by: and by bloomberg, a provider of multi-media information and news services worldwide. >> you are watching ♪ "american masters" is supported in part by an award from the national endowment for the arts. art works. and by the corporation for public broadcasting. additional funding for "american masters" provided by...

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