AI is the space race of our generation, and we need to get it right, seize the promise of this technology, rather than waste it.
By Newin
Recently, Roelof Botha, a partner at Sequoia Capital, and Jacob Helberg, an advisor to Palantir and the founder of the Hill and Valley Conference, had an in-depth conversation exploring topics such as technology regulation, the importance of open-source software, and the decoupling of technology between the United States and China.
Roelof Botha likened AI to "the space race of our generation," emphasizing its critical impact on the future of the country. To win this race, the United States needs to adopt the correct strategies in technology, policy, and international cooperation.
He also pointed out that open-source software not only accelerates innovation but also enhances technological transparency and promotes international cooperation. Therefore, the United States should continue to support and develop open-source projects in the field of AI to prevent rival countries from dominating this area.
Below is the full content of this conversation, enjoy~
Erik Torenberg:
Hill and Valley Conference has been a great success. First, I'd like to ask you, Roelof, what made you decide to join the conference this year?
Roelof Botha:
Before answering that question, I would like to express my gratitude to Jacob because he has made a significant contribution to bridging the gap between Silicon Valley and Washington, D.C. There has been a decades-long history between Silicon Valley and the U.S. government.
I believe people don't always understand why Silicon Valley is what it is today, largely due to the significant investment by the government in basic research and development, such as the development of semiconductors and the internet. This relationship began to fade about ten years ago, but now seeing people like Jacob stepping up to reignite these conversations, bringing people from Washington, D.C. and Silicon Valley together, is really great.
As the name of the conference suggests, Hill and Valley, it's the first time we've discovered that we have more in common than meets the eye in the same room.
The reason we participated in this conference is that when I joined Sequoia Capital shortly after leaving PayPal, there were about 200 million people worldwide who could access the internet. Today, this number has clearly reached billions. Technology has become more deeply integrated into our lives than we could have imagined 20 years ago.
Therefore, if Silicon Valley thinks it doesn't have an important role in society as a whole, that notion may be somewhat outdated. Therefore, it is necessary for people in Silicon Valley to step up and voice their opinions in the debates in Washington, D.C. because technology profoundly affects our lives.
If we don't participate, we cannot have sufficient information exchange, nor can we formulate policies that will enable the United States to continue to thrive and remain competitive on the global stage.
Erik Torenberg:
Well said. Jacob, now I'd like to ask you to talk about it. You have held several such summits, and this one has been a great success. Both sides have made significant contributions, and many important figures have spoken. Even former President Trump submitted some encouraging notes. Can you talk about how the attitudes between Capitol Hill and Silicon Valley have changed in recent years since you have been building bridges between the two?
Jacob Helberg:
Eric, if I may, I'd like to expand a bit on your first question about Sequoia Capital's participation in Hill and Valley and add a few points.
The core mission of the Hill and Valley Forum is to promote cooperation between Silicon Valley and Capitol Hill to ensure that the United States has the best technological capabilities in the world. In my view, we cannot achieve this mission well without the best representatives from both sides participating.
My boss, Alex Karp of Palantir, has a saying - "If you want to heal patients, you need the best surgeons." I also approach this issue from the same perspective.
Therefore, to make the Hill and Valley Forum successful, we need the best innovators and the best venture capitalists to collaborate with the most thoughtful and committed policymakers.
When Roelof expressed interest in participating, I was very excited because Sequoia Capital plays an important role in Silicon Valley and has always been at the forefront of innovation. It was a real pleasure to invite him to this year's Hill and Valley Forum.
Erik Torenberg:
That's great. Let's move on to the second question. How do you think attitudes have changed since you started this bridge-building work?
Jacob Helberg:
When I first started documenting the knowledge exercise of the relationship between Washington and Silicon Valley, some of my work began when I was working in Google's policy team. I noticed two things.
First, over the years, the relationship between Silicon Valley and Washington has become somewhat tense, filled with a great deal of mistrust and a clear cultural disconnect. This mistrust partly stems from a series of unfortunate events, such as the Snowden leaks, which led to strong opposition to large Silicon Valley companies internationally.
Second, events like Project Maven and Project Dragonfly have also attracted a lot of attention and controversy, which has led many policymakers in Washington to distrust Silicon Valley.
Additionally, I also noticed that the most attention and speaking opportunities in Washington were given to senior executives from the largest tech companies. But when I lived in the Bay Area, I saw a vibrant tech ecosystem there that hardly attracted attention and interest from Washington.
As a result, one of the outcomes is that many in Washington began to pessimistically believe that our best engineers were only optimizing advertising technology, while China was focusing on developing supersonic technology and hard technology. But I know that's not true because I see founders taking on significant risks every day, trying to solve difficult engineering problems.
Ultimately, in 2021, I published a book that includes a whole chapter specifically discussing the rift between Hill and Valley. As a byproduct of this work, we established a conference, which eventually formed a community aimed at bringing these two communities together and bridging the cultural gap. And this cultural gap is real.
In Washington, people in Congress typically approach issues from a legal background, and most stakeholders are over 60 years old; whereas in Silicon Valley, people are on average about 20 years younger and have an engineering background.
So, people are approaching the same set of facts from different worldviews and life experiences. But fundamentally, they are all building businesses for the future, and I am very passionate about helping to build bridges between these two critical communities.
Erik Torenberg:
Well said. Roelof, I'd like to ask you about Sequoia Capital's views on defense and frontier technology. Which areas do you see potential in? Could you share some insights?
Roelof Botha:
My job is actually very interesting because I just listen to the smartest entrepreneurs, that's what we pursue. Fortunately, founders can see the future earlier than we can, it's their special gift, and our goal at Sequoia Capital is to help them realize that vision and make the future a reality.
We see more and more entrepreneurs, not only for good company-building reasons but sometimes out of patriotism, wanting to make a difference in defense technology.
We are investors in SpaceX, which obviously has a huge impact on U.S. defense. SpaceX now accounts for 80% of all global orbital mass, more than all other countries combined. Without what Elon Musk has done at SpaceX, the United States would be significantly behind.
Considering the control of the space race, this is a huge factor for our national defense. I have a long history with Elon; he recruited me at PayPal many years ago.
We also work with a company called Mark. Jacob mentioned supersonic technology earlier. It's actually a bit regrettable that when the United States was developing supersonic technology, it received funding from DARPA, but we did not fully develop it. The U.S. Air Force did not seize the opportunity, and intellectual property was stolen and adopted. Today, our adversaries far surpass us in supersonic capabilities.
Mark's founder, Ethan, also spoke at the Hill and Valley Forum. They are developing hydrogen fuel and hypersonic missile systems and defense systems for the U.S. government. We are excited to collaborate with them. We also have a long history in the field of cybersecurity, which is clearly a major area where many battles are fought.
We have been investing in Palantir since 2005 and are now working with companies like Wiz and Oasis to provide cybersecurity solutions or machine security solutions. We continue to see these opportunities. We have completed two new investments, but they are still in stealth mode.
In fact, just earlier today, we approved another investment in the defense sector. It's great to see founders finding their way here, and we are eager to help them build great companies.
Erik Torenberg:
You have been very outspoken about whether we should take action on TikTok, and you have been influential in pushing for this goal or taking steps. Do you think we are engaged in a new arms race with China?
Jacob Helberg:
I do believe we are engaged in a new arms race with China. For a long time, I was very concerned that many elements of Silicon Valley were trying to remain neutral, like Switzerland. Geopolitical affairs were not the core of most founders' daily work in building companies.
I think many entrepreneurs can understandably prefer to stay away from the center of geopolitical confrontation. But I think in the mid-2010s, many companies were trying to remain neutral in deepening geopolitical confrontations, essentially trying to balance competition between Beijing and Washington.
I wrote an article in 2020 pointing out that Silicon Valley cannot remain neutral in a U.S.-China cold war, and I am very pleased to see that I think we have shifted direction. I think overall, today, Silicon Valley generally believes that the U.S.-China relationship needs companies to take a less ambiguous stance. So, I am pleased to see that I think the era of neutrality in Silicon Valley is over today.
As Roelof mentioned, we see an inspiring and growing ecosystem of tech founders who voluntarily respond to the government's call to solve some of the most difficult engineering problems, from supersonic technology to bioscience and AI.
These hard and frontier technologies are inherently dual-use, so it is crucial that our best founders focus on solving the most difficult problems.
Ultimately, I believe the U.S. government has a responsibility to better engage with Silicon Valley and help translate our best private innovations into hard power.
Erik Torenberg:
Roelof, I just gave Jacob's advocacy work full recognition, but you also deserve praise, and even for your company, your efforts to separate from China and focus on the U.S. and Europe are very commendable. Can you explain the current state of this separation? To what extent are you still connected to that company? Why do you think this is an investment risk for the U.S. and Sequoia Capital?
Roelof Botha:
Of course. We went through a period of expansion around 2005. This was shortly after China joined the WTO. The prevailing Western view at the time was that economic integration would lead to some degree of normalization and acceptance of Western democratic values. The U.S. government explicitly encouraged investment in China and the development of economic ties. This clearly lifted hundreds of millions of people out of poverty.
So, we set up offices in India, Southeast Asia, and China. We did set them up as independent entities, managed by independent teams, making independent decisions, and raising independent funds. What we shared was the brand and back-office functions such as finance, compliance, and IT. Clearly, the world has changed. Recent data I've seen shows that the share of global merchandise trade in global GDP peaked in 2008 and has been declining for over 15 years.
So, we are now in a more economically nationalist period, which is very different from the 70-year post-World War II golden era we enjoyed, and we need to recognize this reality.
We are certainly not turning a blind eye to geopolitical pressures. Frankly, operating such a widely distributed global organization does present challenges, even though they are independent entities. So, we came together last year and decided that a separation would be more appropriate.
We announced this decision in June 2023, and by the end of last year, the complete separation had been completed, and we are now a completely independent brand.
Erik Torenberg:
Does the TikTok incident foreshadow a further deepening of the technological decoupling between the U.S. and China?
Jacob Helberg:
I believe it does, and I want to echo some of Roelof's points. I think the process that Roelof described - the prevailing consensus in the early to mid-2000s that deeper integration with China was beneficial for the world and the U.S. - was true in both the private and public sectors. As Roelof said, this was the official policy of the U.S. government, promoting deeper regional and international integration.
So, many companies began to reassess and decided to look for markets outside of China, and some companies adopted a "build where you sell" model. The process of adapting to this new environment also occurred in the policy-making community.
The legislation around TikTok actually reflects this. TikTok has been allowed to operate in the U.S. for a long time, the Huawei issue only surfaced in the mid-2010s, as did ZTE, and DJI is still under discussion and subject to strict scrutiny in the U.S.
If you look around, you see many policymakers going through the same reassessment process, believing that public policy needs to be readjusted to reflect the changed world and that updating policy approaches is therefore reasonable.
I think the legislation around TikTok ultimately represents an important and urgent reassessment of our technological trading relationship with China, and it is an important precedent for how we handle other technology issues.
I think what you are seeing is that this process is gradually taking place, whether it's the debate around ZTE, Huawei, TikTok, DJI, or the Trump campaign team's consideration of possible tariffs on electric cars. You see that we are re-evaluating our technological trading relationships comprehensively. I think, given the world situation in 2024, this is a healthy trend.
Erik Torenberg:
Roelof, do you have anything to add?
Roelof Botha:
I studied economics, statistics, and mathematics in college. I have always been a faithful advocate of the theory of comparative advantage, believing that the benefits of trade are obvious. The problem is that this theory makes simplified assumptions about the interests of trade partners, assuming that everyone serves a common interest and has certain values, such as respect for intellectual property and human rights.
This issue reminds me of a joke: if you are playing a sport, like soccer, and one side wins because they frequently score offside goals, at some point you have to say, we need to readjust the rules, this is not how we play the game together. So, I think these discussions we are having are very healthy.
Jacob Helberg:
Eric, I would like to add to what Roelof just said. I think one of the very important reasons to keep open channels of communication between Congress and Silicon Valley is that everyone in Washington understands that it is clearly not realistic for all production to be reshored to the U.S.
So, policymakers need feedback from tech executives in Silicon Valley to better achieve the goal of reducing reliance on China, especially in supply chain and data security. The feedback from tech executives who understand supply chains and complex platform architectures is very valuable to policymakers.
Policymakers can use this feedback to better implement trade agendas, whether it's trade with countries like Vietnam, India, or other markets, to provide the scale needed for companies to develop great products and breakthrough technologies while addressing security issues.
Roelof Botha:
In addition to security issues, there are also fundamental legal issues regarding intellectual property. I have personally been involved with at least three software companies whose software has been openly stolen, making it impossible for us to do business in China because we cannot protect the intellectual property of these companies.
These companies have invested billions of dollars in research and development over the past decade, developing world-class software, and we cannot enter certain markets where competitors have not made research and development investments but are using our software to build their businesses.
This is a bit like taking over someone else's factory without having to pay capital expenditure and claiming to be a low-cost producer. This is an unfair trade practice, and we should not tolerate such unfair behavior, apart from national security issues.
Jacob Helberg:
Yes, absolutely right. Peter Thiel once made an interesting observation that the U.S. and China are playing different games in some ways. Because China's population is about four times that of the U.S., if they achieve technological parity, their economic scale could be four times ours, simply because of their population size. Therefore, for us, staying ahead is more important than for them.
As Roelof mentioned, we need to be cautious, as this behavior has a scale of billions of dollars in the U.S. economy. The former head of the Cyber Command called it the largest transfer of wealth in human history, which is clearly an exaggeration, but he pointed out that the scale is significant.
Erik Torenberg:
That's a really interesting point. It feels like you have been issuing warnings for years, and now people are finally starting to listen and take this threat seriously. If you knew everything you know now and could go back to around 2010, when our expectations and hopes for China were high, not only expecting them to liberalize and compete fairly, but also making many agreements with them that they ultimately did not fulfill or taking actions we did not anticipate, what different things would you advise us to do? What different measures could we have taken to put us in a more advantageous position?
Jacob Helberg:
I mean, I think the debate about strategic technology decoupling could have started earlier. I think the evidence of these thefts by China was clear. I don't think I have a crystal ball, I just closely followed the patterns of these behaviors, which did not attract much attention at the time.
Over the past few years, my basic approach has been to have conversations with almost anyone willing to listen. I think one of the great things about our democratic system is that you can have these democratic conversations, based on the merits of an idea, and let the best arguments win. If an argument is persuasive, people will be open to it and take feedback. I think consensus evolving in this way is a very good thing.
Erik Torenberg:
Well said. I want to broaden the discussion to talk about the AI supply chain. How does export control affect technology?
Jacob Helberg:
Do you have any thoughts on this topic? I'm curious if people in the Bay Area are discussing export controls, if it's a topic in the entrepreneurial ecosystem?
Roelof Botha:
Export control itself is not a hot topic. I think the more popular discussion in Silicon Valley is about CFIUS (Committee on Foreign Investment in the United States). The rules that exist for the ability of foreign countries or individuals, especially China, to invest in the U.S. have been in place for some time.
The question is whether these rules are sufficient, given the changes that have occurred, and whether existing ownership needs to be reassessed. If an investment was considered sensitive three years ago, should it be reassessed rather than forgotten. So, this is a contemporary discussion.
Additionally, I think more and more Silicon Valley investors are unwilling to invest in China. One argument I've heard is that many are concerned about return on investment rather than just investment.
In fact, you will see many Chinese investors actually investing in Europe and the U.S., as opportunities in China have diminished, and government intervention in the participation of many leading private and public tech companies has reduced their opportunities, which is an ongoing debate.
When it comes to export controls, I think it may be particularly in the context of AI, we need something similar to energy independence. If you consider what has happened in the past decade, if we had not cracked hydraulic fracturing and achieved energy independence, the U.S. would be in a truly precarious position.
People here are very concerned about a future where we may not have AI independence, which involves the semiconductor manufacturing independence, Taiwan is obviously a huge exposure point, and I think people here are very eager to see the re-development of domestic critical node manufacturing capabilities. So, this is a very, very hot topic in Silicon Valley.
Jacob Helberg:
I think in Washington, I think these observations from Silicon Valley are actually very interesting, because in Washington, a lot of time and attention is focused on chip production. But there is less focus on the AI supply chain and other parts of the technology ecosystem.
I think the increase of Chinese capital in the U.S. tech ecosystem is actually underestimated in the policy-making community, as well as the concept of AI independence.
I think this is very interesting and in line with some of the trends we are seeing, such as KV investing in an India-based version of OpenAI, based on the basic theory that different major powers will want to have their own "sovereign AI capabilities".
So, I think the concept of AI independence is actually a very interesting topic that policymakers need to understand more, especially considering the current situation in the UAE, which is obviously a very energy-rich country, committing to invest billions to build large computing clusters.
Clearly, they have the right to do so, and our companies should be able to freely collaborate with them, build infrastructure, because if we don't, China will fill that void.
But I think we need to think and deliberately decide whether we want our companies to start relying on computing capabilities from foreign partners like the UAE, or if we want to invest domestically in the U.S. to have the local computing capabilities to build the best AI models in the world.
Because I am a little worried that if we don't upgrade our energy grid, don't make the necessary investments in energy infrastructure and computing infrastructure, five, six, seven years from now, our largest AI companies will heavily rely on foreign computing infrastructure, and we will be discussing the AI supply chain just like we are discussing the manufacturing supply chain now, whether it's devices, toys, or electric cars. So, I think this industry is still in its early stages, and we can treat it more deliberately, and being able to help drive these discussions is very good.
Roelof Botha:
By the way, today, U.S. data centers consume about 2% of the electricity. Based on current predictions of the energy requirements for building these models and running inferences, this proportion will grow from 2% to 6%. Increasing U.S. power capacity by 4% is significant.
Currently, it takes about four and a half years to complete an environmental impact study for just one new factory, regardless of its nature. I know a few small nuclear reactors have been approved, but I really encourage us to act quickly to ensure we have enough power capacity. Power production capacity is one of the best indicators of predicted GDP growth.
We have the ability to produce clean energy, solar energy has become cheap enough, nuclear technology exists, we just need to get out of our own way and avoid overregulation.
Jacob Helberg:
Yes, I completely agree. This is a topic I hope to elevate more in Washington, because I think it's very important.
Erik Torenberg:
To further discuss this topic, I want to talk about regulation. Maybe starting with you, Roelof. What are your views on AI regulation? What approach should we take? How do we get it right? What mistakes do we need to avoid?
Roelof Botha:
One of the wonderful things about the U.S. system is actually regulation. When I was in business school, there was a professor, Paul Romer, who gave a lecture trying to explain to us how the foundational regulatory framework in the U.S. allowed capitalism to flourish.
As a freshman, I was confused, what did he mean? He described how efficient the U.S. Chapter 7 bankruptcy process is compared to bankruptcy processes in other countries, which allows human capital, capital, and buildings to be reallocated to new things.
So, I think overall, I can imagine half of Silicon Valley has an immediate disdain for regulation, instinctively reacting that regulation itself is bad. That's not the case. Reasonable regulation allows our country to thrive. I think in AI, we have both opportunities and risks. The risk is that we get it wrong and miss out on one of the best opportunities to drive national economic growth, which is the opportunity in front of us.
Therefore, we need to be very careful to seize this opportunity and ensure that the policy focus is on applications rather than basic technology. Because regulating the basic capabilities of AI, like regulating electricity or internal combustion engines as abstract innovations, without considering their actual applications. So, in my view, that's where the focus should be.
I'll give a few examples. I sit on the board of a financial services company that provides loans to small businesses and consumers. The U.S. has very robust fair lending regulations. Whether you're using primitive statistical techniques, early machine learning models, or the latest AI models, you should be testing to ensure that lending practices comply with U.S. regulations. This has nothing to do with regulating the basic models, whether it's machine learning models or so-called modern generative AI models.
So, I think that's the focus we need to pay attention to. I'm a bit concerned that Europe may be going more aggressively in this direction than it should, and they may inadvertently miss out on a huge opportunity. Frankly, the Hill and Valley Forum is a good example for me, and I also went to Washington in February.
When I spoke with people on Capitol Hill, they were very willing to listen. They not only want to engage with leading companies, but as Jacob mentioned earlier, they also want to hear from smaller companies. Academia, several professors also participated in last week's Hill and Valley Forum because they want to be part of these policy discussions. It's a bipartisan effort as well.
Seeing so many people from different political backgrounds engaging in thinking about these issues, grappling with them, and trying to find the right answers is really amazing to me. So, I'm very optimistic that we are having the discussions in the right way and that we will move in the right direction.
Jacob Helberg:
I completely agree with Roelof's point. The emphasis he mentioned on focusing on the ultimate application of the technology rather than the technology itself is very correct. He used electricity as an example, which is a very good example.
I also often use steel as an analogy, because you can use steel to make machine guns, but you can also use it to build hospitals, and obviously machine guns and hospitals should not be regulated in the same way.
So, when I hear some discussions in Washington, I'm a bit concerned that there is too much focus on regulating the technology itself through creating a whole new institution for oversight, licensing, and auditing.
What I would like to see is a method based on end-use and sectoral division, meaning that the regulation of AI in the transportation sector should not be the same as in healthcare or biomedical research. Therefore, I strongly support governing AI based on end-use and sectoral division. One benefit of this approach is that it is also based on legal precedent.
For example, in the AI field in transportation, some classic policy issues are, if an autonomous vehicle hits a person, who is responsible, the AI company or the car manufacturer? You can use a wealth of legal precedents and our tort law system to formulate answers to these policy issues, which are consistent with the answers we have already formulated for related issues in that industry.
So, I think this is the ultimately correct approach. The same goes for AI in the military domain, where we have laws regarding sensitive technology export controls and a whole set of policy agendas aimed at having the best military technology. Therefore, if you think about this issue from the perspective of end-use and sectoral division, it will make policy discussions more rational, rather than creating a whole new institution to arbitrate unfair AI, or other policy-defined content.
Erik Torenberg:
To delve deeper into the debate between open and closed. We have Mark, Jason, and Vinod Khosla holding opposing views on whether open source should be encouraged. Very smart people have different opinions on whether open source should be encouraged. What are your thoughts on this issue?
Roelof Botha:
I am a loyal fan of open-source software. Many of the software products we enjoy today would not exist without open-source technology. When I was at PayPal, we had to spend a lot of money buying Sun servers because we had to use Oracle as the database. We had to build our own data center capabilities, stack servers ourselves, it was a very different business.
When I worked with the founders of YouTube in 2005, they were able to use open-source technologies like MySQL and MemCache, and this was the beginning of cloud computing. This allowed them to more easily build a very attractive business that attracted a large number of users globally every day.
So, to me, open-source software is commendable because it is inherently open, others can inspect the code, sunlight is the best disinfectant. So, you can expose vulnerabilities and have them pressure-tested by academia. Therefore, I continue to be a staunch supporter of nurturing an open-source ecosystem in the AI field.
There is also the issue that Alibaba has one of the top 15 open-source models in the world. Therefore, if the U.S. does not provide or support open-source technology in the AI field, other countries will fill this void.
You may ultimately find that the next developer building applications in Southeast Asia, Latin America, Eastern Europe, or Africa is using models developed in our competitor markets, which will give answers different from what we consider the right answers.
So, we have to consider this future, because if we don't provide these open-source technologies ourselves, other countries will fill this void. I don't think that's the future we want. Therefore, I am a loyal fan of open source, and I also support companies that want to build proprietary models.
If you look at many other software categories we invest in, such as infrastructure software, companies providing proprietary software and open-source companies are both able to thrive. I think we should promote the same ecosystem in the AI field.
Jacob Helberg:
From a policy perspective, people in Washington are still figuring out what the right approach is. I think this debate is actually one of the reasons we decided to hold daytime meetings this year, because policymakers really want to hear from the builders of technology.
The argument against open source is that we need to try to prevent China from gaining access to our most sensitive capabilities, by using light-touch methods like Know Your Customer rules or other types of rules to slow down their development.
But the argument in favor of open source, as Roelof just described, is also very interesting and compelling, because ultimately open-source software could become a very powerful platform technology that many other companies and countries will develop on.
So, if we start making open source more difficult, will this create a vacuum to be filled by Alibaba and other Chinese companies? Therefore, hearing from the builders of technology is very useful, as people in Washington have not made a decision yet. Thinking about these trade-offs is very interesting and useful.
Roelof Botha:
But Jacob, given the history of state-sponsored intellectual property theft against U.S. companies, I think it's fair to assume that closing source or proprietary models will not actually be stolen. So, if we think we can truly keep these secrets, that's self-deception.
I almost think the opposite, that people congregate in cities or clusters in cities because ideas spread very quickly. Your competitive advantage is not actually that you have this idea, but that your idea develops faster than elsewhere.
In my view, maintaining the ability to be open source in the U.S. will allow us to learn faster than anywhere else. The resonance of benefiting from the spread of ideas among our smartest minds will be a sustained advantage.
Another example is not just developing core technology, but its implementation. Despite Russia stealing the blueprint for microchips, they were never able to build a factory comparable to the ones we built in the U.S.
So, I think we should support and leverage our strengths. If we approach it from a perspective of fear, trying to block the door and close the windows, thinking that's how we stay competitive, I actually think we will fail. That's not the winning strategy I believe in.
When we were raising money for PayPal many years ago, Peter Thiel and I talked about this issue. Many people raising money are very secretive, unwilling to share their plans, thinking their ideas are very unique. Peter had a great way of turning it around, he said, "Listen, most of the time, many other people have the same idea as you. It's not a secret.
I actually want to turn it into an advantage, I will engage with as many other smart people as possible, because they will pressure-test my ideas, which will help me improve our approach." So, instead of closing and isolating our ideas, we are very open. This actually allows us to enrich our thinking and improve our approach. That's the winning strategy I believe in.
Jacob Helberg:
I find Roelof's feedback very interesting and valuable, as he presents very compelling arguments for open-source software. Honestly, I personally find this a very fascinating area of technology policy, but also very important and needs to be handled well. Although I have gone back and forth on this issue, I must say that I have a great concern for national security.
Therefore, I admit that I initially had a certain bias towards implementing a "Know Your Customer" rule, attempting to create a basic firewall to prevent other companies from gaining access to our models. But I must say that Roelof's points are very legitimate and effective, even if you create these firewalls, they may still gain access to the technology, as there is ample evidence that they are very effective in stealing technology.
So, if you take this approach, you are actually absorbing the cost of making your technology more difficult to globalize, while not truly preventing your adversaries from accessing your technology. So, this is a very compelling argument, and I think hearing these pros and cons is very useful for policymakers.
Additionally, I personally have another bias, as someone who grew up in Europe, I have witnessed how Europe often completely stifles its own economy. Therefore, in cases of doubt, my default position tends to be not to take any action, as no regulation is better than bad regulation.
In these cases, if there is not clear and compelling evidence, I would actually tend to lean towards not implementing new regulations.
Erik Torenberg:
Very clear and powerful expressions, we are approaching the end, and I would like both of you to make a concluding statement, perhaps some advice for Silicon Valley or Washington, on how to better or differently understand or engage with each other. Jacob, perhaps you go first, one minute each?
Jacob Helberg:
I am very excited about the interaction between Washington and Silicon Valley, as both sides are willing to collaborate to solve many issues that are very important to the country. On one hand, Washington needs the help of Silicon Valley to ensure that we have the best capabilities in the world, but it also needs the help of Silicon Valley to think about how to handle and address many policy issues being discussed in Washington, because ultimately, we want to land in the right place for our economic prosperity and national security.
I am very pleased to see policymakers in Washington also engaging in dialogue with an open mindset, willing to take the time to talk to people, listen to feedback, inviting people to their offices, and they want to do this work on a bipartisan basis.
This makes me very optimistic that the relationship between Silicon Valley and Washington has indeed turned a corner, and we now have a fairly solid foundation of trust, which can make some truly historic progress in technology investment, addressing long-neglected issues, and introducing new technology into government operations to solve big problems.
Whether it's better land management to address large fires, or more efficient allocation of healthcare benefits, many parts of the public sector can be modernized through better technology. Ultimately, as Roelof mentioned in the opening remarks, Silicon Valley partly got its start with strong support from the U.S. government.
Therefore, better clarity from the U.S. government from a policy perspective will also serve to clarify for many founders, letting them know where the policymakers' bottom line is. It is very important to maintain these open channels of communication, and I am glad we have made great progress in this regard.
Roelof Botha:
The achievements the U.S. has made in the past 100 years are truly remarkable. I think we have the opportunity to continue this momentum in the coming decades. This requires dialogue between policymakers and industry professionals.
The most pressing topic today is AI, which may be another topic in a few years, but we need to maintain this open dialogue and have these discussions. Regarding AI, I really think this is a generational technology. It is our generation's space race. We need to get this right, and I hope we can seize the promise of this technology rather than squander it.
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