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Chapter 1: Why did Nick Clegg leave Meta and what are his thoughts on Silicon Valley?
Where is the intellectual energy from the left and the centre-left? If you keep miscasting the past, you don't have the intellectual wherewithal to ask what you need to do next, which is why they're now governing in this haphazard way. They've replaced policy with sanctimony. And if you replace policy with sanctimony, you don't produce better policy. This is where we're stuck at the moment.
And I led a centre-left party for eight years. And the whole of Silicon Valley, not just Mark Zuckerberg, but all that you saw in the inauguration, have decided to, rather than shun politics, have decided to embrace at least MAGA politics for a whole bunch of reasons. The single biggest thing that drives their behaviour is competition with each other.
And remember, the Brexit wars were basically a battle. It was a triumph of nostalgia over a claim of the future.
The economy was growing again. We were looking more competitive as a nation. And then we voted to leave the European Union.
We're delighted to say that this year the rest is money is powered by Octopus Energy. So we're joined by its founder and CEO, Greg Jackson. Hiya, Greg. You travelled with Prime Minister Keir Starmer on his latest trip to China. Why?
There's a lot of people who quite rightly think we're naive. if we don't understand the threats we face from China. But it's equally naive not to understand that Chinese technologies can now transform so many industries. And if we don't understand what they're doing and find ways to work with them, we're going to get left behind.
Look, the reality is it used to be about China stealing our secrets. But now their own investment in technologies means that solar panels are 400 times cheaper than they were 40 years ago. Batteries for electric cars are 10 times cheaper than they were 12 years ago. If we can find ways to work with this, we can bring costs down for British people. And that's got to be a good thing.
Greg, thank you very much. Now on with today's episode.
Hello and welcome to The Rest Is Money with me, Robert Peston. Today, I'm delighted to be joined here at the South by Southwest Tech Conference in trendy East London. I'm joined by the former Deputy Prime Minister Nick Clegg, also the former, I don't know whether he's the right hand or left hand person of Mark Zuckerberg at Meta. And we've had the most...
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Chapter 2: How is competition among tech companies influencing their behavior?
So an absolutely fascinating conversation. Here's my conversation with Nick Clegg. Former deputy prime minister, former leader of the Lib Dems. I mean, people describe you, I don't know if it's quite right, as a sort of number two meta left as Trump was taking power. It's weird that Zuckerberg moves into Trumpian mode. Liberal Democrat Nick Clegg leaves the company. As you say, yeah.
Can't believe the events were connected.
No, of course they were. I mean, so when I arrived in Silicon Valley, so Miriam and myself and our three boys, we moved, physically moved there in the autumn of 2018. It was a completely different time. Silicon Valley was still quite sort of, Quite sort of happy, clappy, bit hippy, dippy, you know, very much left leaning for sure, for better or for worse.
But crucially, social media was a social thing. It was like about human beings. Fast forward to now and the whole of Silicon Valley, not just Mark Zuckerberg, but all of you saw that in the inauguration, have decided to, rather than shun politics, which is what they did for a long time, in my view,
They've decided to embrace at least MAGA politics for a whole bunch of reasons, some no doubt high minded and some more self-interested. And crucially, the product or certainly the product in the company I work for has changed utterly from being a sort of human centric product to one which is now much, much more about innovation.
content, often synthetic content, being algorithmically recommended to you. So there were absolutely no hard feelings or anything, but it was just a very good time after seven years for me to move on. I mean, to put it mildly, it was not exactly the kind of thing that appealed to me.
Making the case for it was going to become difficult.
Well, I didn't even try. Actually, I tried to make the alternative case, which was that I think in the long run for these big monster companies, and as much as you care about their longevity, I think they, for their own business interests, I'm not talking about my old life as a politician, because I wasn't employed as a politician.
But I actually just think as a sort of business person, I don't think it's sensible business to flip-flop every time the political weather changes in Europe. In Washington, in the US, that is. Now, it's particularly difficult for social media companies because in the US, which is quite different to here in the UK, people are totally split.
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Chapter 3: How does the dependency on American technology affect Europe?
And then just the moment where they might achieve world scale, they sell out, you know, notoriously DeepMind to Alphabet, Arm to SoftBank and then listed on the, you know, US Stock Exchange. got right now some amazing young businesses.
I mean, there's this business, Ineffable, which is doing what's known as reinforced learning and is actually trying to make massive knowledge breakthroughs not using large language. It seems to be a very intriguing business, and it's been valued already at multi-billions. It's been in existence for literally a few weeks.
It's the David Silver business.
We've got Demis Osiris' new business, Isomorphic, which is a cutting-edge business. development of new medical treatments, again, multi-billion valuation in only a few months. These are British-based businesses. Only a fraction of their finance, however, is coming directly from UK institutions, which worries me.
Chapter 4: What challenges does the UK face in the AI race against the US and China?
Yes, I think there are three things we probably need to do. One, if we're not going to build these transformer models from scratch, double down on all what I call the post-LLM innovations likely to happen. The second thing I'd do is... And actually, Tony Blair touched on this in his essay last week or whenever it was. Focus on deployment and adoption of AI. This is a game of scale.
The physics of AI is very, very expensive. It's expensive in energy, water, capital.
Compute capacity infrastructure you need scale and what we are just too small on our own It's as simple as that if you want to compete with China and America over the next decade We have to find a way without reopening the brexit debates of 2016 to create a tech Single market, but you're right, but you're absolutely right about that.
Of course, right? But there are two, you know, you've got to break that down, right? so Of course, the fundamental reason why America leads the world in large language models, AI, is because it has the most important single market in the world. And that's been, you know, why did America lead in investment banks? Because it's got an enormous domestic market.
Why does it lead in so many other industries? But the paradox about Europe is, obviously, there's been an enormous cost to the EU leaving the European Union, economically a big cost. But Europe itself has been... Nowhere. You know, yes, you're right. Mistral in France may be a second tier player over the over the medium term. Right.
But you only have to go back to the Draghi report about why Europe is not competing to realize that we're, you know, that Europe itself has to change and reform if it's going to be a player in these new industries.
Hugely. And of course, it's just immense. I mean, I find it teeth gnashingly frustrating to see this pretty, I mean, it's not perfect, but pretty good plausible blueprint from Mario Draghi and Enrico Letta. And basically, it's just sort of gathering dust. By the way, movement will come.
At what point will European leaders, including our own, have a panic attack about this and actually change?
Well, that I think is actually the several trillion dollar question. My increasing fear is it might only happen after a major fiscal crisis. Because at the moment, I don't understand why the body politic, whether it's here or in Paris or Berlin, does not respond much, much more radically.
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