>>> THE BATTLE FOR SUPREMACY IN THE FIELD OF AI IS WELL AND TRULY ON.

THE RECENT BOMBSHELL ABOUT CHINA'S BREAKTHROUGH TECHNOLOGY DEEPSEEK HAD AN IMMEDIATE AND NEGATIVE EFFECT ON AMERICA'S TECH WORLD.

DEEPSEEK IS REPORTEDLY CHEAPER AND FASTER THAN CURRENT U.S. TECHNOLOGY.

TRUMP CALLED IT A WAKE-UP CALL.

FORMER TOP CYBER SECURITY OFFICIAL ANNE NEUBERGER JOINS THE SHOW TO DISCUSS IT.

>> THANK YOU.

WELCOME TO THE SHOW.

>> THANK YOU, WALTER.

IT'S GREAT TO BE HERE WITH YOU.

>> THE BIG NEWS THIS WEEK IS THE CHINESE COMPANY'S RELEASE OF SOMETHING CALLED DEEPSEEK.

AN AI SYSTEM THAT IS LIKE GROK AI OR CHATGPT BUT MUCH, MUCH MORE EFFICIENT.

IT USES LESS ELECTRICITY.

ABLE TO GET AROUND THE RESTRICTIONS WE PUT ON MICROCHIPS AND MICRO PROCESSORS.

I JUST DOWNLOADED IT ON MAY PHONE.

ONE OF THE THING IT THAT, THE PERSONAL INFORMATION WE COLLECT FROM YOU MAY BE STORED ON A SERVER LOCATED OUTSIDE THE COUNTRY YOU LIVE.

WHAT DOES THAT MAY NOT FOR CHINESE ESPIONAGE AND INTELLIGENCE GATHERING?

>> DEEPSEEK DID HIGHLIGHT THAT.

IT'S NOT MUST THE TO BE BETTER IN AI.

IT MATTERS THE COST.

THE EFFICIENCY.

AI WILL BE A GAME-CHANGER FOR INTELLIGENCE BECAUSE IT ALLOWS FOR MORE, FASTER, AND BETTER INTELLIGENCE.

I'LL GIVE YOU THREE PRACTICAL EXAMPLES.

ONE IN THE AREA OF MISSILE DEFENSE.

A SECOND IN THE AREA OF COUNTERTERRORISM.

AND A THIRD THAT GOES EXACTLY TO THE QUESTION YOU RAISED WITH REGARD TO GATHERING PERSONAL INFORMATION AND MAKING SENSE OF THAT FOR AN INTELLIGENCE AGENCY.

SO IN THE AREA OF MISSILE DEFENSE.

MISSILE LAUNCHERS ARE OFTEN MOBILE.

IT MAKES IT HARD TO RAPIDLY DETECT THE POTENTIAL FOR A MISSILE LAUNCH IN TIME TO WARN MISSILE DEFENSE SYSTEMS.

AI COULD BE A GAME-CHANGER IN ALLOWING FOR BRINGING TOGETHER IMAGES, FOR EXAMPLE, THOSE CAPTURED BY SATELLITES, OF KNOWN OR SUSPECTED MISSILE LAUNCH SITES, ALONG WITH SIGNALS OF PEOPLE WHO WORK IN THOSE PROGRAM TO RAPIDLY DETECT THE POTENTIAL FOR LAUNCH.

SIMILARLY IN THE AREA OF LANGUAGE, AI IS TRAINED ON MULTIPLE LANGUAGES, COULD KNOW THE NUANCE BETWEEN DIALECTS AND DETERMINE WHICH ARE CODED WORDS OR CULTURAL WORDS TO HELP IDENTIFY PLOTS.

AND THEN FINALLY, IN THE AREA IN THE QUESTION YOU ASKED, WHEN YOU THINK ABOUT A GOVERNMENT LIKE CHINA, COLLECTS VAST AMOUNT OF DATA SETS, WHETHER IT IS OFF MODELS ON YOUR PHONE OR OFF THE MILLIONS OF CAMERAS DEPLOYED IN CHINA AND AROUND THE WORLD, CHINA CAN MAKE SENSE OF THAT IN ONE OR TWO DRIVE SURVEILLANCE.

IF THEY'RE INTERESTED IN A PARTICULAR INDIVIDUAL.

THEY'RE INTERESTED BECAUSE OF THEIR ROLE, THE KNOWLEDGE THEY PLAY, OR BECAUSE OF KEY DATA SETS LIKE RESEARCH AND DEVELOPMENT INDUSTRIES, ARE INTERESTED TO TRAIN MODELS FOR THEIR OWN ADVANCEMENTS.

>> THE VENTURE CAPITALIST WHO BACKED A LOT OF THESE COMPANIES AND WAS ONE OF THE FOUNDERS OF NET SPACE SAID THIS IS A PUT , OF SPUTNIK THAT WENT UP IN 1957.

IS THIS A WAKE-UP CALL FOR ALL OF US?

>> IT IS INDEED.

A WAKE-UP CALL FOR AMERICA THAT AI IS A RACE WE CAN LOSE.

WE HAVE THE INNOVATION ENGINE TODAY.

WE HAVE THE EDGE.

IT IS NOT ENOUGH TO PRODUCE THE BEST AI TECHNOLOGY.

THE KEY IS TO PRODUCE THE MOST EFFICIENT.

THE CHEEPEST TO DEPLOY IN FIELDS FROM DRUG DISCOVERY.

>> BIDEN HAD AN EXECUTIVE ORDER ON AI AND THEN SOME GUARDRAILS AROUND AI.

MORE THAN 100 PAGES THAT EXPLAINED WHAT COULD BE DONE AND NOT DONE.

WHAT INTELLIGENCE COULD BE GATHERED.

DID THAT SLOW THE U.S. DOWN AND GIVE CHINA THE ADVANTAGE TO LEAP AHEAD THIS WAY?

>> YOU KNOW, A POINT WITH A GREAT DEAL OF IN NUANCE.

IT LIKESLY FORCED THE CHINESE TO INNOVATE LIKE THEY DID WITH DEEPSEEK.

INDEED, THE CEO OF DEEPSEEK NOTED THAT THE BIDEN ADMINISTRATION'S PEER CONTROLS WAS A CHALLENGE FOR THEM.

AS A RESULT, THEY INNOVATED.

THEY INTEGRATED ACROSS THE ALGORITHMS WITH WAYS TO MORE EFFICIENTLY RUN THIS MODEL.

>> DOESN'T THAT MEAN IT WAS A BAD IDEA FOR US TO DO THAT?

NOW THEY'VE INNOVATED AND BECOME MUCH MORE EFFICIENT.

>> IT DOES MAKE A DIFFERENCE.

IT IS NOT THE END-ALL, BE-ALL.

CERTAINLY THE CONTROLS SLOWED DOWN THE CHINESE.

BUT THEY HAD TO INOVER 58th AND COME UP WITH WAYS.

THIS IS A CALL TO ACTION FOR OUR AI COMPANY TO DO THE SAME INNOVATION.

SO IN ADDITION TO COMPUTE DATA, IT MATTERS A GREAT DEAL AND LETTING A THOUSAND FLOWERS BLOOM IN TERMS OF DIFFERENT WAYS ON AI.

WHEN I TALK ABOUT HIGH-VALUE DATE, A THERE ARE SOME WHO BELIEVE THAT DEEPSEEK MAY HAVE GENERATED HIGH-VALUE DATA TO TRAIN THEIR MODEL USING U.S. AI MODELS AND THAT MATTERS A GREAT DEAL.

AS WE THINK ABOUT THE FUTURE, THINKING ABOUT PROTECTING HIGH-VALUE DATA SETS AND BUILDING THAT INTO THE U.S.

APPROACHES ON AI WILL BE IMPORTANT.

>> THE CHINESE HAVE DONE IT WITH AN OPEN SOURCE MODEL.

DID THAT GIVE THEM AN ADVANTAGE?

>> IT CERTAINLY GIVES AN ADVANTAGE BECAUSE OPEN SOURCE, THE MODEL WEIGHTS ARE OPEN.

BY HAVING CHEAPER MODELS AVAILABLE, MORE OF AN ECOSYSTEM CAN BE BUILT ON IT.

SO THINK ABOUT META'S LLAMA, ALSO AN OPEN SOURCE MODEL.

WHY THAT MATTERS IS THE DEVELOPERS, WHETHER THEY USE IT TO DEVELOP CUSTOMIZED WAYS FOR KIDS TO LEARN.

WHETHER THEY'RE USING TO IT TRAIN MODELS ON PARTICULARLY DIFFERENT KINDS OF LANGUAGES OR SENSITIVE DATA SETS.

SO OPEN SOURCE, BECAUSE IT IS CHEAPER, DOES ALLOW MORE USERS TO BUILD ON IT.

THAT'S A GOOD THING.

A LOT OF POSITIVE APPLICATIONS.

IT'S ALSO A CONCERN BECAUSE THESE POWERFUL AI CAPABILITIES COULD BE IN THE HANDS OF POTENTIALLY MALICIOUS USERS.

YOU KNOW, ONE OF THE TOUGHEST ISSUES I DEALT WITH WHEN I WAS AT THE WHITE HOUSE WERE CYBER CRIMINALS DEVELOPING LOCKING UP AMERICAN HOSPITALS.

DEVELOPING CYBER CAPABILITIES TO LOCK UP THE HOSPITALS FOR RANSOMS.

CERTAINLY, AI CAN MAKE IT EASIER TO BUILD LONGER-LASTING AND MORE FOCUSED OFFENSIVE CYBER CAPABILITIES BY A RANGE OF USERS.

>> WHEN WE TALK ABOUT OPEN SOURCE, WE MEAN THE SOURCE CODE IS PUBLIC.

PEOPLE CAN CHANGE IT AND BUILD UPON IT AS OPPOSED TO, LET'S SAY, OPEN AI WHICH WAS SUPPOSED TO BE OPEN SOURCE BUT NOW IS CLOSED WITH ITS CHATGPT.

IS THERE SOMETHING THE U.S. SHOULD TRY TO DO IN REGULATING OPEN AND CLOSE?

OR IS THAT SOMETHING THAT CAN'T BE REGULATED?

>> YOU KNOW, WALTER, THE WAY WE WIN IS ON HAVING THE BEST TECH.

AS WE'VE SEEN THE LESSONS LEARNED FROM DEEPSEEK, THE CHEAPEST TECH.

BY REGULATING THAT, IT BECOMES A WHACK-A-MOLE.

YOU REGULATE THIS AND SOMETHING ELSE POPS UP.

GENERALLY OUR APPROACH SHOULD BE TO LEARN FROM THIS.

TO FIGURE OUT, HOW DO WE BEST INNOVATE AND TO SEE IT'S NOT ENOUGH TO BUILD POTENTIALLY THE BEST AI TECH.

IT REALLY DOES MATTER WHAT IT CAUSES FOR USERS TO USE IT AND THE COMPUTE MODEL TO RUN IT.

>> ONE OF THE THINGS THAT REALLY CROPS UP IS FACIAL RECOGNITION.

IF I WALK AROUND HERE IN NEW ORLEANS, ALL SORTS OF CAMERAS, DOOR BELL CAMERAS AND CAMERAS ON THE STREETS.

AND IT WOULDN'T USUALLY MATTER.

IN CHINA NOW, THEY CAN RECOGNIZE INDIVIDUALS AND USE THAT FACIAL RECOGNITION AS PART OF THEIR ESPIONAGE ON THEIR OWN CITIZENS.

IS THAT SOMETHING THAT COULD BE AND SHOULD BE DONE IN THE UNITED STATES?

>> SO FIRST, YOUR POINT IS WELL TAKEN THAT CHINA USES THEIR MILLIONS OF CAMERAS DEPLOYED IN CHINA AND FRANKLY AROUND THE WORLD TO TRAIN VERY SOPHISTICATED FACIAL RECOGNITION MODELS.

AND THAT'S A REAL CONCERN, AS YOU ASKED ME EARLIER, REGARDING THE RACE BETWEEN INTELLIGENCE OF AUTHORITARIAN AND DEMOCRATIC COUNTRIES.

CHINA'S ABILITY TO DO THAT WILL MAKE U.S. INTELLIGENCE OPERATIONS HARDER.

IT PUTS U.S. MILITARY OFFICERS AND OTHERS AT GREATER RISK.

IN THE UNITED STATES, THE CHALLENGE FOR US IS DEPLOYING ARTIFICIAL INTELLIGENCE IN A WAY THAT IS IN LINE WITH THE VALUES AND LAWS OF A DEMOCRACY.

YOU KNOW, I SAW THIS FIRSTHAND.

I LED THE NATIONAL SECURITY AGENCY.

I SERVED AS THE FIRST SECURITY OFFICER AND I SAW THE LOST OF TRUST BY CITIZENS IN OUR DEMOCRACY IN INTELLIGENCE SERVICES.

OUR CITIZENS, OUR ALLIES, AND THE DIVISIVENESS BETWEEN GOVERNMENT AND THE TECH SECTOR THAT DEVELOPED AFTER THAT.

THAT MUST BE AVOIDED FOR THE U.S.

IN TERMS OF HOW THE U.S. GOVERNMENT USES AI IN SENSITIVE NATIONAL SECURITY APPLICATIONS.

AND IT CAN BE AVOIDED.

>> HOW DO WE OVERCOME THAT?

OR SHOULD WE?

SHOULD WE BE A LITTLE RESISTANT IN OVERCOMING THAT LACK OF TRUST?

>> WE OVERCOME IT THROUGH TRANSPARENCY, THROUGH TALKING ABOUT HOW AI IS BEING USED IN SENSITIVE NATIONAL SECURITY APPLICATIONS, AND IN TALKING ABOUT HOW THE LAWS AND VALUES OF THE COUNTRY ARE BEING IMPLEMENTED.

THE CHALLENGE IS, TECHNOLOGY MOVES FAR FASTER.

WE NEED TO ENSURE THAT AS THE INTELLIGENCE COMMITTEE, AS THE MILITARY IS DEPLOYING AI, THEY ARE EXPLICIT WITH TRANSPARENCY ABOUT HOW THEY ARE DOING SO.

HOW THEY KEEP A HUMAN IN THE LOOP FOR CERTAIN KINDS OF DECISIONS.

WHERE THE PROTECTIONS OF AMERICAN CIVIL LIBERTIES OF PRIVACY AND OTHERS ARE BAKED IN WHEN DATA SETS ARE CREATED.

ALL OF THAT IS KEY TO HOW AI IS DEPLOYED FOR SENSITIVE NATIONAL SECURITY APPLICATIONS.

>> YOU TALK ABOUT ALL THE RESTRAINTS AND THE CIVIL LIBERTY CONSTRAINTS THAT NEED TO BE IN A DEMOCRACY, TRANSPARENT AND PUT ON IT.

TO THE WHAT EXTENT DOES THAT HANDICAP US IN COMPETING AGAINST CHINA WHICH DOES NOT HAVE THOSE RESTRAINTS?

>> IT CERTAINLY MAKES IT HARDER AND POTENTIALLY MAKES US SLOWER IN DEPLOYING AI APPLICATIONS FOR SENSITIVE USES.

I WOULD ARGUE WHO WE ARE AS A DEMOCRACY, OUR CITIZENS' CONFIDENCE THAT THEIR CIVIL LIBERTIES AND PRIVACY ARE PROTECTED, IS AN IMPORTANT CONSIDERATION IN DEPLOYING ARTIFICIAL INTELLIGENCE.

AND WE CAN BOTH USE AI IN MILITARY APPLICATIONS.

SOME OF THOSE I TALKED ABOUT WHILE ALSO RETAINING THE CONFIDENCE OF OUR CITIZENS AND ALLIES, THAT WE'RE DOING SO WITH OUR LAWS.

LET ME READ YOU A QUOTE.

YOU SAID WITH AN AI RACE UNDERWAY, THE UNITED STATES MUST CHALLENGE ITSELF TO BE FIRST.

FIRST TO BENEFIT FROM AI.

FIRST TO PROTECT FROM OUR ENEMIES AND FIRST TO USE AI IN LINE WITH THE LAWS AND VALUES OF DEMOCRACY.

DO YOU THINK THAT YOU AI WILL HELP DEFEND DEMOCRACY?

OR IS IT A REAL THREAT TO US?

>> AI HAS TREMENDOUS PROMISE.

HELPING INTELLIGENCE SERVICES MAKE SENSE OF THE VAST AMOUNTS OF INTELLIGENCE COLLECTED.

THE VAST AMOUNTS OF DATA COLLECTED.

AND MAKE SENSE OF THAT MORE QUICKLY AND IN A WAY THAT'S MORE RELEVANT FOR POLICY MAKERS.

AI WILL BE MAJOR BENEFIT ECONOMICALLY.

IT ALSO REPRESENTS A RISK FOR THE QUOTE YOU JUST SAID.

BECAUSE OUR ADVERSARIES WILL USE IT AS WELL.

COUNTRIES LIKE CHINA, AGGRESSIVE COUNTRIES LIKE IRAN, BUT ALSO, A WHOLE HOST OF POTENTIALLY TERROR GROUPS AND CYBER CRIMINALS AND THAT'S WHY WE WANT TO DO BOTH.

DEPLOY TO PROTECT OUR COUNTRY AND ALSO, PROTECT OURSELVES FROM POTENTIAL ADVERSARIES USING IT FOR ILL. WE MUST DO BOTH.

KEEP AN EYE ON HOW WE QUICKLY DEPLOY AND WHAT OUR ADVERSARIES ARE DOING.

INCLUDING PROTECTING THE SENSITIVE AI MODEL THAT'S COULD BE DRIVING, FOR EXAMPLE, HOW WE CONTROL LARGE NUMBERS OF UNMANNED DRONES.

HOW WE CONTROL LARGE NUMBERS OF UNMANNED SHIPS, AS AN EXAMPLE.

>> IF WE USED AI TO COMMAND DRONES, AS YOU SAID, OR COMMAND THE SHIPS, THERE'S ALWAYS BEEN A RULE IN THE MILITARY THAT THERE'S A HUMAN IN THE LOOP.

DOES THAT DISADVANTAGE US IN NOT BEING AS FAST AS OUR ADVERSARIES COULD BE?

>> AI IS REALLY KEY IN THAT IT WILL ALLOW US TO BE MORE PRECISE.

FOR EXAMPLE.

WHEN WE THINK ABOUT A POTENTIAL CONFLICT IN THE SOUTH CHINA SEA, THE VAST PACIFIC OCEAN, BEING ABLE TO DETECT SHIPS, BEING ABLE TO DETECT A PARTICULAR AGO GROU SHIPS APPROACHING.

WHAT IS THE PATTERN ANALYSIS TO SAY, IS THIS AN OFFENSIVE, IS THIS A POTENTIAL DEFENSIVE MISSION?

SO AI WILL BE CRITICAL IN INFORMING HUMANS AND MAKING HUMANS MORE EFFECTIVE IN MILITARY OPERATIONS.

THAT'S A DECISION THE NATIONAL SECURITY HAS MADE.

IN MAKING FASTER DECISIONS, MORE ACCURATE IN MAKING DECISIONS IN THOSE KINDS OF SENSITIVE SCENARIOS.

>> YOU POINT OUT THAT A MAJOR DISTINCTION BETWEEN WHAT'S HAPPENING IN CHINA WITH DEEPSEEK AND OTHER THINGS VERSUS WHAT'S HAPPENING IN THE U.S. IS THAT CHINA BOTH HAS GOVERNMENT-RUN PROGRAMS AND THE COMPANIES IN CHINA HAVE TO SHARE THINGS WITH THE GOVERNMENT.

YOU WERE ON ALL SIDES, LOOKING AT ALL SIDES OF THAT ISSUE BEFORE U.S. COMPANIES, SUCH AS GOOGLE, SUCH AS META, SOMETIMES SHARE DATA WITH THE U.S. AND SOMETIMES RESIST IT.

DO WE NEED TO CHANGE THE WAY WE OPERATE SO THAT THE U.S. GOVERNMENT CAN HAVE A BETTER PARTNERSHIP WITH THE PRIVATE COMPANIES DEVELOPING AI HERE?

>> THE PRIVATE SECTOR IS THE ENGINE OF AMERICAN INNOVATION.

PARTICULARLY IN ARTIFICIAL INTELLIGENCE.

WHEN WE THINK ABOUT HOW THE U.S., AS THE COMPETITION BETWEEN DEMOCRACY AND AUTHORITARIAN GOVERNMENTS LIKE CHINA HEATS UP, IN TERMS THE FUTURE OF THE WORLD, WE KNOW THAT THE U.S.'S WORLD CLASS PRIVATE SECTOR ON INNOVATION IS A PART OF HOW WE COMPETE ON THAT GLOBAL STAGE.

WHAT THAT PARTNERSHIP LOOKS LIKE WILL NEED TO EVOLVE.

FOR EXAMPLE, HOW THE INTELLIGENCE COMMUNITY USES PRIVATE SECTOR AI MODELS TO LEVERAGE WHAT THEY KNOW AND THEN FURTHER TRAIN THEM WITH CLASSIFIED INFORMATION TO ENSURE THAT THE INSIGHTS THE INTELLIGENCE COMMUTE IS PROVIDING REALLY INTEGRATES ACROSS BOTH.

>> WHEN YOU WERE IN GOVERNMENT AND THE EDWARD SNOWDEN REVELATIONS CAME ALONG, IT WAS COMPANIES LIKE GOOGLE AND AMAZON AND META HAD BEEN COOPERATING WITH THE U.S. GOVERNMENT.

THERE WAS SOME OUTRAGE THAT MAYBE SOME OF THAT DATA WAS SECRETLY GIVEN TO THE U.S. GOVERNMENT.

AND THEN THAT STOPPED.

AT THE INAUGURATION OF PRESIDENT TRUMP, WE SAW THE LEADERS OF THESE COMPANY.

MARK ZUCKERBERG OF META, JEFF BEZOS, REALLY TRYING TO FORGE A, SAY, PARTNERSHIP WITH THE TRUMP ADMINISTRATION.

DO YOU THINK THAT WILL AFFECT HOW BIG CORPORATIONS USE DATA WHEN THE UNITED STATES INTELLIGENCE COMMUNITY WANTS IT?

>> SO FIRST, THERE'S REAL VALUE IN AI IN TERMS OUR ECONOMIC STRENGTH, ECONOMIC GROWTH, AND DEPLOYING IT ACROSS INDUSTRIES TO DRIVE AMERICAN INNOVATIONS AND ADVANCEMENTS.

COMING TO YOUR QUESTION, THE LAWS THAT GOVERN HOW THOSE COMPANIES SHARE INFORMATION WITH THE U.S. INTELLIGENCE COMMUNITY, WITH LAW ENFORCEMENT, ARE CLEAR.

THERE WAS A GREAT DEAL OF INCREASED TRANSPARENCY TO HELP THE AVERAGE AMERICAN AND CITIZEN UNDERSTAND THE LAWS.

THERE'S A REAL LESSON THERE.

UNTIL THE SNOWDEN REVELATIONS, U.S. INTELLIGENCE OPERATIONS WERE A BLACK BOX.

THE AVERAGE CITIZEN, THE AVERAGE ALLY, DID NOT UNDERSTAND HOW AMERICAN TECH COMPANIES, WHAT INFORMATION THEY WERE PROVIDING AND IN RESPONSE TO WHAT STANDARDS OF LAW AND CIVIL LIBERTIES AND PRIVACY PROTECTIONS.

SO THERE WAS A LOT OF WORK DONE FOLLOWING SNOWDEN TO REBUILD THAT TRUST.

THE LESSON THERE, ONE CANNOT ALLOW THIS PARTNERSHIP OF THIS COUNTRY'S INNOVATION AND THE U.S. GOVERNMENT TO BE IN A BLACK BOX.

AS THE INTERNATIONAL COMMUNITY DEPLOYS AI IN SENSITIVE APPLICATIONS, EXPLAIN IT TRANSPARENTLY.

SLOWING THE AVERAGE AMERICAN CITIZEN UNDERSTANDS THAT WILL BE KEY TO AVOID THAT BREAKDOWN.

AND EVEN MORE IMPORTANTLY, TO ENSURE AS WE SEEK TO COMPETE WITH THE AUTHORITARIAN MODELS, WHERE THAT TIE IS VERY CLEAR AND UNCONSTRAINED BY DEMOCRATIC LAWS AND VALUES, WE ALSO COMPETE ON WHO WE ARE IN THAT WAY.

>> ANNE NEUBERGER.

THANK YOU FOR JOINING US.

>> THANK YOU FOR HAVING ME.