Episode Transcript
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Speaker 1 (00:00):
The radical policy shifts under Donald Trump's second administration, marked
by aggressive tariffs, the regulatory agendas and geopolitical tensions have
intensified global concerns about an over reliance on US tech.
Countries like New Zealand, let's face it, are dependent on
Silicon Valley's innovations. We now face heightened risks of economic coercion,
(00:26):
data sovereignty vulnerabilities, and supply chain instability.
Speaker 2 (00:33):
This week on the.
Speaker 1 (00:33):
Business of Tech, powered by two Degrees Business, I'm asking
the question, can we still trust US tech with Trump
in the White House?
Speaker 2 (00:42):
After all?
Speaker 1 (00:43):
European nations are exploring how to reduce reliance on US
cloud providers like AWS and Google Cloud so as to
avoid surveillance risk and fears that US laws like the
Cloud Act will be used to access data stored by
American firms over Like in the European Union, the Trump administration,
(01:04):
let's face it, has weaponized tarifs to retaliate against foreign
regulations targeting US tech firms. If, for instance, we were
to put a tax on streaming platforms like Netflix and
Amazon Prime to claw back some of the digital ad
dollars disappearing offshore to big tech platforms we could be
(01:24):
accused of extorting his tech giants. Trump wants the US
to win an artificial intelligence not just against China, but
he wants to beat everybody. Heavy dependence on US AI
platforms could stifle innovation and amplify geopolitical leverage. Does this
(01:45):
all sound a little bit paranoid to you? Well, maybe,
but look I don't think so. I'm hearing more and
more about digital sovereignty from people in the New Zealand
tech sector. They're worried about what is coming Guess this week.
Paris Marks, the Canadian journalist and author off the fantastic
Disconnect substack and an associated podcast, Tech Won't Save Us,
(02:10):
has been thinking about this a lot. He's also done
a fantastic podcast series in recent months called Data Vampires,
looking at the flurry of data center construction going on
around the world to.
Speaker 2 (02:22):
Feed the AI boom.
Speaker 1 (02:25):
I sat down with Paris and Wellington recently when he
was back in the country to do some talks on
the issue of digital sovereignty. Is it too late to
wean ourselves off the US tech stack? Can we steer
our own path on AI? Given the dominance, particularly of
generative AI systems built and sold by US companies like Microsoft,
(02:45):
OpenAI and Google. I delve into all of that and
more on episode ninety six of the Business of Tech,
and it's Paris's second appearance on the show as well.
So here he is Paris Marx on the Business of Tech,
(03:05):
Paris Marks, Welcome back to the Business of Tech. Great
to see you in person here in New Zealand.
Speaker 2 (03:11):
Absolutely great to join you.
Speaker 1 (03:12):
So you've been to New Zealand a few times in
recent years. What's the reason for this trip? You know,
I often come back.
Speaker 3 (03:19):
I try to come back once a year, you know,
when it's more your summer in our winter, given that
I'm from Canada, because it's a good reason to do that.
And yeah, I just had a you know, I had
a little window I could take advantage of to come
down and so, you know, doing some interviews, doing an
event up in Auckland.
Speaker 2 (03:37):
Yeah, and you know, just enjoying New Zealand for a
couple of weeks.
Speaker 1 (03:40):
And that event is about the topic of digital sovereignty,
which I'll get you to define in a minute, but
very topical issue at the moment, particularly since the election
in the US, the rise again off Donald Trump and
what that means for sovereign in general, but it has
(04:01):
a take angle to it as well, so we'll talk
about that. So you actually were looking at studying in
New Zealand at one point as well.
Speaker 2 (04:11):
What happened there? Yeah, that's right.
Speaker 3 (04:13):
You know, I did a master's degree in Montreal, uh,
you know, looking at transportation and things like that, and
then because I had lived in Wellington, I looked at
potentially coming back down to Auckland. You know, I enrolled
at the University of Auckland, got a scholarship to do
a PhD all that sort of stuff. But unfortunately, at
least at the time, I don't know if it's still
the case on the student visa, you weren't allowed to
(04:35):
be self employed, and you know I write and make
podcasts and all this kind of stuff, and so you know,
after some discussions with immigration advisors accountants, it just seemed
that it'd be you know, too difficult to get around
that to come down. So yeah, I put those plans,
while I canceled those plans and you know, did something
else instead.
Speaker 1 (04:53):
Right, And more recently, you've you've you've got the Disconnect blog,
You've got what Weekly podcast, and you've done a very
interesting series called Data Vampires, which is looking at the
proliferation of data centers around the world, and we'll put
a link to some of those episodes. That's been a
fantastic series, and we're going to talk about data centers,
(05:17):
but let's start with this idea of digital sovereignty. It
seems like it's becoming increasingly important to countries, to the
extent that I've had several conversations in recent weeks with
senior people in the New Zealand tech community who have
been saying something they've never said to me before. We
(05:37):
really need to think about whether we can trust American
technology platforms and having all of our data and applications
on them. And I'm like, wow, is it really in
the space of a couple of months. Is that how
people are thinking now? And they're looking at obviously the
tariff stuff, the weaponization off tariffs against countries that Trump
(06:00):
Fields are going after Big Tich, particularly in the European Union,
but Canada as well, and it won't be long before
New Zealand and Australia are on that list as well.
If we do things like a digital news Bargaining bill,
there will be repercussions so digital sovereignty is now on
(06:20):
the tip of everyone's tongue.
Speaker 2 (06:22):
But what is it? How would you define digital sovereignty?
Speaker 3 (06:26):
Yeah, it's a good question, right, and even down here,
you know, obviously not New Zealand, but Australia. When Trump
did his like Liberation Day reciprocal tariffs. One of the
justifications given for you know, the level that was applied
to Australia was the news bargaining code that they brought
in you know over there, right that that affect that
the tech companies, and the tech companies didn't like, you know,
(06:48):
Facebook and Google in particular, but we've seen that, you know,
they have targeted in particular these measures that have gone
after the US tech industry in Canada, in Europe, and
you know that's not going to stop, right, and they're
not going to end at the tech industry. But you know,
with what I do, that's you know, the thing that
I pay the most attention to. And so I think
it's really interesting that you say that about the kinds
(07:09):
of conversations that you've been having in New Zealand with
people down here, because I think that we see that
as well in Canada, in parts of Europe, in I
would say many other countries as well, right where it
has long been accepted that okay, we are using this
American technology, where using these American platforms, that is completely okay.
This is just you know, how using the internet works,
This is how you know, digital technology and you know,
(07:32):
what we're doing in the twenty first century.
Speaker 2 (07:33):
Kind of is.
Speaker 3 (07:34):
And you know, people like me have been kind of
questioning that for quite a while. Even back in the
end of last year, I co wrote a white paper
with some colleagues of mine in Europe and Latin America
kind of trying to forward this idea of digital sovereignty.
And so, you know, to actually answer your question directly,
I would say that digital sovereignty is ensuring that countries
(07:56):
have a better you know, control over what happens with
the technologies within their borders. And I think that one
of the things that I've been most concerned about, especially
as we have seen this shift toward, you know, further
trying to regulate what happens, you know, on these platforms
with American tech companies, is this push pack that we
have been experiencing to that those efforts at regulation and
(08:18):
to those efforts at just expecting that these American tech companies,
you know, align with the rules and norms and expectations
that we have for how they should operate in our countries,
and how they have been pushing back against that. And so,
you know, when it comes to digital sovereignty, the question is, okay, one,
how do we make sure that these companies, you know,
align with these rules and the values that we have
(08:41):
if they are not exactly in line with say the
United States and what's expected there. But then beyond that,
you know, does it actually make sense for so much
of our digital infrastructures, for so much of the services
that we rely on, for so many of the platforms
that we rely on, to be owned and controlled and
run by American companies. And you know, it's great to
start to see a broader acceptance of this because of
(09:03):
what Trump has been doing. But I think even without
you know, Donald Trump as a figure, this should be
a conversation that we, you know, should be having because
I think it makes a lot of sense to start
thinking about having a greater control over the infrastructures and
technologies that we use, you know, in our day to
day lives, in business, in whatever, because you know, ultimately
(09:25):
there's a lot of power that comes with the control
over those things.
Speaker 1 (09:28):
Absolutely, and if you look at small countrylike New Zealand,
many would argue that we are a technology taker and
it's inefficient to do anything otherwise. We can't replicate that
infrastructure locally. But we're getting to the point now where
you know, our government is basically based on Microsoft Azure
(09:49):
and Amazon a WS. Is that a great position to
be in, particularly if Trump directs those companies to do things,
We're very vulnerable. But we are seeing pushback from governments.
You've written about this, you know, and it's it's in
things like the you know, the case of Pavel d'uov
(10:09):
from Telegram you've you've written about. He was arrested in
France because the French government claimed he was not complying
with efforts to police his own platform address child exploitation,
material and terrorism sort of discussion and stuff like that
on the platform. Brazil's ban on X another example of that.
(10:33):
The European Union in general slapping digital taxes on big
tech companies, leveraging big fines against tech companies. So we
are starting to see individual nations and blocks of nations
actually saying enough is enough.
Speaker 2 (10:50):
Yeah, and I think that's key, right.
Speaker 3 (10:52):
And one are the things that has been very clear
in Canada even before the Trump administration is how much
the American government has been opposed to this.
Speaker 2 (11:01):
Right.
Speaker 3 (11:01):
Obviously, we know that the tech companies don't want to
be regulated in tax This is quite clear, right, They're
very open about that. But what we've experienced in Canada
as well is, you know, we have one of these
digital services taxes. We have a news bargaining code like
what Australia has, you know, slightly different but similar sort
of a thing. You know, we brought forward regulations on
streaming platforms to make sure that more of the content
(11:23):
on there is Canadian content, or at least that you know,
the platforms are showing people more Canadian content to give
them that option, right and to kind of elevate it,
and to make sure that they are investing in creating
Canadian content to put on their platforms, and which each
with each of those things, we not only saw the
pushback from the tech companies themselves, but often from the
(11:44):
diplomats and the embassy in threatening Canada for saying that,
you know, we're discriminating against their companies and things like that,
and with the digital services tax in particular, it was
the Biden administration that actually brought us to like an
international tribunal to try to stop that from happening. Right,
So again it's you know, I don't want us to
(12:04):
think that it's just a Trump thing, and if Trump
wasn't there, it would be something we shouldn't have to
worry about, because I think more broadly, we see this
approach from the American government and trying to protect its
tech companies because the American government does benefit immensely from
the fact that we all depend on technologies made by
companies based in the United States.
Speaker 1 (12:22):
Absolutely, I mean the digital services, which recently, when Trump
had Liberation Day, it was all about you know, cars
and steel and beef, and you know, the focus was
very much he didn't say anything about digital services because
the US exports something like seven hundred billion dollars worth
(12:42):
of digital services every year. That includes financial services as well,
that's a big component of it. But you know, they
are net exporters to literally every country and it still
likes of Netflix, subscriptions, aws bills, all of that adds
up to that. So there's no discussion of tariffs on that.
(13:05):
But yeah, Nevertheless, you know a lot of a lot
of countries are attempting to have a more equitable relationship
with US tech companies. For a small country like New Zealand,
I mean, it seems sort of any chance of having
any sort of digital news bargaining bill or a content
(13:25):
quota saying to Netflix you have to have a certain
number of hours of New Zealand content and Disney, it
seems like the political appetite for that has completely died
because the retribution that will come in the form of
some sort of tariff activity.
Speaker 2 (13:40):
Yeah.
Speaker 3 (13:40):
And you know, I think we see that in a
lot of places unfortunately, right and I think in Canada
in particular, we haven't really had a choice in that. So,
you know, we have we were targeted right from.
Speaker 2 (13:52):
The beginning from the trumpet news.
Speaker 3 (13:54):
Yeah, you know, and so any idea or any notion
of trying to avoid the blow black the blow was
gone right away, right. It was like, okay, we are
in the cross airs. How are we responding to this?
And so you know, we have taken a very kind
of forceful, you know, approach in order to to try
to respond to that with reciprocal tariffs, you know, with
(14:15):
kind of obviously recognizing that there's going to be a very.
Speaker 2 (14:19):
Changed relationship with the United States.
Speaker 3 (14:22):
But I think what I would say, you know, on
that broader notion, especially when you think of like a
smaller country, you know, addressing this and Canada shore is
a country of forty million people, but it's still not
a country of three hundred plus million like the United States. Right,
So there's a certain degree of capacity there that's greater
than what New Zealand might have, but it's also far
less than what the United States would have or a block.
Speaker 2 (14:43):
Like the European Union for example, Right.
Speaker 3 (14:46):
And so even in that case, when we think about,
you know, what digital sovereignty might look like in that context,
for me, one are the things that is key of
you know, any type of effort in order to like
build a a kind of digital sovereignty is not to
do it kind of you know, one country on its own, right,
Canada needs to build its own digital sovereignty or New
(15:07):
Zealand needs to build its own digital sovereignty. It's about
saying we need to work together if we are really
going to achieve this, so that we can pool our resources.
So yes, you know, Canada is going to need to
control its own infrastructures within its own borders. But we
can work with New Zealand, we can work with Australia,
we can work with Brazil, we can work with European
(15:28):
countries on building platforms and services and you know, the
types of things that are going to be much more
international than physical infrastructure, and that is where I see opportunity.
But a key piece of that as well, especially if
you're thinking about, like you know, international alliances and working together,
is also a recognition that maybe the model that these
(15:51):
Silicon Valley services and companies were built on is also
flawed in a way that we don't want to replicate. There,
you know, a very kind of financialized model technological development
that I think we can all recognize has led to
particular drawbacks in the type of technology.
Speaker 2 (16:07):
That gets created through that model.
Speaker 3 (16:10):
And if we're thinking about technology that ultimately serves the
public good and the broader society, yeah, obviously there's going
to be a role for private companies and stuff in
doing that. But also is that particular model that has
been the one that has been dominant for the past
three decades really the one that we want to continue
with If we're thinking about this kind of fundamental break
(16:30):
from what we have right now.
Speaker 1 (16:31):
Yeah, you've written that cyberlibertarianism must die if there's to
be any hope of a better future for the Internet.
And I sort of looked at term up to see
what it means, and I sort of think probably twenty
years ago, I was probably a cyber libertarian, you know,
in the early days of the Internet, very ideological about
(16:54):
what the Internet was, this sort of thing that sure
controlled by America, came out of American ipernet and all that,
but a best effort attempt to do something good for
the world, and there was a lot of good people
involved in it, and a lot of great stuff happened.
Then we had the sort of the Web two revolution
(17:15):
where all of that was monetized to death and a
lot of bad stuff happened. But we do have the
likes of Mirk Andres and the venture capitalist billionaire Silicon
Valley has written a lot about this, Peter Thiel and others,
which is basically, if we want to solve the big
problems in the world, stay out of far away, don't
regulate us. Technology will solve some of these problems. Look
(17:36):
at Europe, they regulated themselves to death, they don't have
any unicorns. Even the Europeans are saying, we did it
the wrong way. We want to catch up with America.
So there is some something attractive to a lot of
people in that argument permissionless innovation. But what we are seeing,
(17:56):
and I guess what you're advocating, is we governments need
to take it a more hands on approach to steering
their own destiny because the digital economy is now so.
Speaker 2 (18:06):
Big, exactly.
Speaker 3 (18:07):
And you know, I think the thing I would say
about that as well is that the US government wasn't
really like totally hands off, right. They were in there
the whole time in trying to direct what was happening
with their own tech industry and also to try to
aid that.
Speaker 2 (18:21):
Kind of global growth.
Speaker 3 (18:23):
And I think when I think of that kind of
cyber libertarianism, part of that is this notion that, you know,
this kind of belief that has been pushed from some
in the tech industry and supporters of the tech industry,
that you know, the governments to just leave the tech
industry alone, let it do what it wants to do,
and that the government is inherently like not just a
(18:44):
threat to what these companies want to do but to
freedom of speech and civil liberties and all this kind
of stuff, when actually I would say that, you know,
if we live in democratic countries, that is often not
the way that we perceive our government role that it plays. Yeah,
we have plenty of criticisms of the government and what
(19:04):
it actually is and what it does. But if we
live in democracies, we at least, I would hope, you know,
have the ability to try to shape what government does
to make sure it acts in a way that you know,
is more beneficial to the broader society. And you know,
if we think about countries like say Canada or New Zealand,
we have histories of public broadcasting and you know, recognizing
(19:26):
that there is certainly a role for private companies to
be involved in many parts of the economy, but there's
also times when we need kind of non market pieces
of the economy too, and that is beneficial. You know,
It's not about always taking away, you know, the opportunity
for profit, but recognizing that sometimes you know, the private
market won't deliver certain things and we need to have
(19:49):
the government step in to provide some of those you know,
some of those outcomes or some of those benefits that
we want to see from communications technologies or media or
what have you. Right, And so, you know, digital sovereignty,
I think is a recognition that we have been governed
by this American model for the past several decades, that
there have been a lot of sacrifices that we have
(20:10):
made as a result of that.
Speaker 2 (20:12):
And you know, over the.
Speaker 3 (20:14):
Past few years, over the past five years or so,
I think there has been a growing recognition of many
of the harms that have come of the platforms that
were allowed to be created, the fact that they were
not effectively rained in. And so then the question is,
you know, do we allow that to continue, or as
we pivot to something else, or as we think about
pivoting to something else, how do we ensure that you know,
(20:34):
we do that in a better way than what was
done in the past, but also that we ensure that,
you know, whatever this kind of technological infrastructure is going
to be, that it better aligns with our expectations kind
of you know, in our societies for how these you know,
tech platforms or services or what have you should work, right.
Speaker 1 (20:51):
And that white paper you co authored on digital sovereignty,
you outline a third option rather than just accepting US
technology being a technology taker, or maybe the alternative is
Chinese technology, and there are problems with that as well.
So what would that alternative path look like in practice.
Speaker 3 (21:10):
Yeah, it's a great question, and I think ultimately it
could take many different forms and it will require experimentation, right,
and I think that is actually something to be excited about. Right,
we can try something new, we can try to develop
these things in a different way. Some of those efforts
might fail, but you know, we can probably you know,
get somewhere better at the end of that process. And
(21:32):
so if we're getting to the things that are more tangible,
I would say I think a big kind of fundamental
piece of that is a public cloud right to make
sure that cloud infrastructure, that there is an option for
that that is at least funded by government in order
to be set up, but potentially controlled by government as well,
right in the sense that you know, we have public
(21:53):
postal services, we have you know, public broadcasters. As I
was saying, maybe cloud infrastructure is something that should be
in the public domain and that you know, can then
be provided by government or at least is you know,
kind of serving its own needs through that, and that
we can think about whether that expands to you know,
other potential providers.
Speaker 2 (22:11):
Right.
Speaker 3 (22:12):
But then I think on top of that as well,
is recognizing that technological development can be something that the
public sector has a role in.
Speaker 2 (22:19):
Right.
Speaker 3 (22:20):
It's not something that is that is purely in the
private domain or you know, just done in these kind
of university laboratories. But there's a lot of governments now
that have you know, digital services that are you know,
oriented toward kind of having these tech workers within government
to better deliver services to the public, you know, developing
platforms and services and things like that. But what if
(22:41):
we thought about how that can be expanded to such
a scale where it's not just developing technology for government
in order to you know, make it easier for the
public to access government services, but to actually start to
develop platforms or services that are used by the public
but are not necessarily in the private domain, you know,
whether those are streaming services or office platforms or things
(23:04):
like that.
Speaker 2 (23:05):
And I think it's in that region where I start to.
Speaker 3 (23:07):
Say that you know, a country like New Zealand or
a country like Canada can probably not do that on
its own, but working together, you know, through some kind
of alliance to put those resources together is potentially where
we're going to see, you know, something come to.
Speaker 1 (23:21):
Fruition there, and artificial intelligence could be an example of that.
New Zealand can't build its own large language models and
train them. It's too expensive, but maybe if we collaborated
with countries that might be doable. I guess a lot
of critics will go, well, that's just going to be
an infrastructure for surveillance, big brother. It's going to be
(23:41):
much easier for even Western countries to sort of team
up and police their people to a greater degree in
the digital world.
Speaker 3 (23:49):
Yeah, Like, it is an argument that can be made, right,
But I think my counter argument would be, what is
the most effective surveillance apparatus that has been built in
the history of humanity? And I would argue it has
probably been built by the private sector, you know, exactly right, Yeah,
And you know, these are private infrastructures that have been
(24:12):
set up that have been sold to the public through
you know, narratives of convenience and things like that, but
actually have enabled surveillance to a degree that we could
have never imagined a few decades ago. And that is
not just something that you know, private companies take advantage
of but government's right on that infrastructure all the time.
(24:32):
And I used to find it really interesting when in
the United States they were having these debates about banning TikTok,
you know, something that is ongoing, of course, and often
the argument would be, but if we allow TikTok to
operate here, the Chinese government, the CCP is going to
have access to all this data on Americans. And if
you speak to someone who actually understands how any of
that works, they'll tell you the CCP does not need
(24:55):
TikTok to get access to all that data. They can
buy it from data brokers, they can get it from where, right,
Because you know, all of this data just flows so freely.
The United States doesn't even have a federal Privacy Act
to kind of regulate the flow of data.
Speaker 2 (25:09):
Right. So, like, I recognize that there are.
Speaker 3 (25:13):
Potential issues that would come with government and the public
sector having a greater role in the technology that we use, right,
there's no question about that. But I would also argue
that in democracies we tend to have checks and balances
for those sorts of things, and that there's no reason
to think that we wouldn't be able to develop checks
and balances for this kind of and infrastructure to make
(25:35):
sure that it is used properly. And if we can't
imagine that, then I think that we need to look
more closely at our democracies actually and to see if
they're working properly. I would say the problem then is
not the technology but our political system.
Speaker 2 (25:48):
Yeah.
Speaker 1 (25:48):
Yeah, I mentioned that Data Vampire series that you did.
Fascinating stuff. Experts from all around the world, from Ireland
to South America you talk to about the data center industry,
and I guess you know here in New Zealand this
is topical because we've just had Microsoft open it's Azure
Northern region. They've sunk a lot of money into that,
(26:10):
they're very proud of it. AWS will be not far behind,
and potentially Google as well. So we're talking about billions
of dollars, which in a recessary environment in New Zealand,
I think a lot of people are feeling grateful for
the payoff. Presumably is great a productivity. Our small businesses
can access the cloud more quickly, more cost effectively. But
(26:35):
you saw a lot of the downsides of data centers,
from sustainability issues to control of data, the power that
these companies have negotiating with government. How would you sort
of sum up what you've learned from all of these discussions.
Speaker 3 (26:52):
Yeah, it's a good question, right, And I think I
would say that it's not about opposing data centers wholesale. Right,
We're always going to need data centers to a certain degree,
if you know, we are operating in the twenty first
century using these technologies. But I think the question is
how much computation do we actually need? How much storage
do we actually need? Do we need as much as
(27:12):
these cloud companies are trying to sell us on because
ultimately it's in their kind of business interest in order
to continue growing the amount of computation we collectively use. Right,
And so when we look at the push to build
so many more data centers around the world, and in
particular these hyperscale data centers that get larger and larger
and larger with every passing year, it is on the
(27:34):
one hand, you know the amount of material that actually
goes into one of these facilities. You think about the
thousands or tens of thousands of servers and chips and
things like that that.
Speaker 2 (27:43):
Go into them.
Speaker 3 (27:44):
That requires a lot of mining and production in order
to make all that stuff, right, which I think we
can easily forget. But then when the facility is actually built,
you also tend to need a lot of water and
electricity to run them and to cool them. And you know,
the actual distribution depends on the way the data center
is built, where it's built, the type of cooling that's
being used. But what I found in doing that series
(28:05):
is that as they build more and more of these
infrastructures in more and more parts of the world, the
number of communities that are pushing back on that is
growing because the demands that those facilities are actually making
on those communities are becoming unsustainable to a degree, or
at least getting to a point where those communities are
concerned about it. Whether it's people in Chile who are
concerned about their access to running water into their homes,
(28:28):
or say people in Ireland where twenty one percent of
all the electricity now goes to data centers and in
the winter, they're concerned that they might have power outages
because of the amount of electricity draw that's happening.
Speaker 2 (28:41):
Yeah, and that is a real valid concern.
Speaker 1 (28:43):
As we sit here, we've got drought in parts of
the country, the lake levels are low, there's concern that
over the winter, if we don't have significant rain, that
we might see brownouts and the price of electricity will spike.
Last year we saw paper mills and that have to
shut down. So that is a real valid concern if
data seeners are competing with other general industrial or residential
(29:07):
usage in trouble.
Speaker 3 (29:09):
Yeah, And I think the one thing I would add
there as well is one thing that we're seeing in
the United States in particular, but other parts of the
world too, whether it's Ireland or other places where a
lot of these data centers is being set up, is
you know, obviously we're recognizing that climate change is an issue,
or at least, you know, I hope we still are.
What we're seeing in the United States, maybe not so much,
(29:30):
but the growth of the energy demand, in part because
of these massive data centers and the demands that they're
making on.
Speaker 2 (29:38):
The grid, is making it so that.
Speaker 3 (29:42):
In some parts of the United States and the world,
you know, fossil fuel energy generation is being kept online
longer because of the increased energy demands and because it's
increasing so much quicker than they expected. And we're seeing
in the United States as well that the investment in
new fossil fuel infrastructure is actually at levels they haven't
seen in years to keep up with this growing demand,
(30:05):
often from the data centers and you know what has
been built recently to power AI. You know, of course
we're seeing that in Ireland as well. You know, any
jurisdiction where there is this big growth in data centers,
we're seeing that. Yeah, they're building more renewables, but it's
not keeping up with the increase in demand, so you're
not seeing emissions fall as much as would have been
(30:25):
expected previously.
Speaker 1 (30:27):
Right, what about modular nuclear A lot of hype around
that basically in twenty twenty four and twenty twenty five.
Have you looked into that is their scope for that
to come in and save the tech companies?
Speaker 2 (30:38):
Yeah, I think hype is the keyword. Right.
Speaker 3 (30:41):
There's certainly been a lot of talk about it. Certainly
we've seen Microsoft talk about, you know, reviving three Mile
Island in the United States, but also a lot of
the other tech companies talk about investing in nuclear projects.
You know, I have some personal reservations about the use
of nuclear for environmental reasons and other but even if
we were accepting that that is you know that there's
(31:03):
no issues with it that it's a way to address this.
Even then, if we're thinking about new investment in nuclear,
that is often like about a ten year time horizon,
if not longer. Meanwhile, they're building the data centers now,
right and they want them to come online in the
very near future. And so okay, yes, if they're investing
(31:23):
in nuclear and that's going to power it, and we're
assuming that's okay, that's great, But what's powering it in
that in that ten years or in that five years
until that nuclear actually comes online. The small modular modular
reactors in particular, you know, we've heard about those for
a long time, but we haven't seen them actually, you know,
be adopted at scale or anything like that. And I
(31:44):
think the idea that they are all of a sudden
going to start working and rolling out everywhere, I don't
entirely believe. And I think it sounds like something that
the tech industry likes to talk about to make it
so that we don't pay too much attention to the
climate impact.
Speaker 2 (31:58):
Of you know, all that they're doing right now.
Speaker 1 (32:00):
And it's You've been very critical of the lacks of
Bill Gates, who is big on modular and nuclear and that,
but and as arguably doing quite a lot in terms
of investing in climate mitigation stuff, you know, carbon capture
and storage, sucking carbon out of the atmosphere and turning
(32:22):
it into products or whatever. But you're pretty skeptical off
his intentions and the impact that he's having.
Speaker 3 (32:31):
Absolutely, you know, I don't inherently have a problem with
investing in carbon capture and storage, direct or capture, all
those sorts of things. I'm sure that we will need
to use those technologies to a certain degree. My concern
is more that I feel like the Bill Gates of
the world, when they talk about addressing climate change, they
talk more about we don't need to change, you know, anything.
Speaker 2 (32:54):
Serious about how society works.
Speaker 3 (32:56):
We just need to switch over the energy that we're
using to electric and then kind of try to pull
down all the carbon. And I would say that I
think we see time and again that these solutions don't
tend to arrive on the timeline that you know, people
like Bill Gates promise, and then when they do arrive,
they don't actually deliver the size of the benefits that
they tend to claim. And the one other thing I
(33:16):
would say about Gates is I feel like we have
also seen him kind of pivot over the last few months,
you know, in response to the Trump administration, and even then,
like we've seen with a lot of these tech billionaires,
the kind of ambition that he seems to be you know,
willing to talk about has really diminished, and you know,
I think that that causes even further concern about, you know,
(33:38):
the type of way of addressing climate change that a
lot of these tech billionaires like to talk about that
I don't think are ultimately going to deliver, at least
on the time scales that we're really talking about if
we want to avoid two degrees of warming, which you
know we're already getting very close to.
Speaker 2 (33:53):
Right.
Speaker 1 (33:53):
Yeah, that's been incredible and obviously Elon Musk is the
most visible example offer that shift from ba behind the
scenes influence to public political engagement, and we're seeing it
with Zuckerberg to some extent as well. Obviously, Peter Thiel,
a New Zealander, he has a New Zealand passport, doesn't
(34:13):
have much else to do with New Zealand anymore since
his underground bunker slash resort proposal was knocked back in
the South Island.
Speaker 2 (34:22):
See. He even sold off a lot of his remaining Yeah.
Speaker 1 (34:25):
But miffed, I think with New Zealand. But that's been incredible,
hasn't it? And I wonder it's obviously hurting Elon Musk
his business interests. You know, the liberals who supported him
wanted to reduce their carbon footprints are now taking a
hit on the value off the Tesla's and people are
not buying Tesla's. Is this going to fizzle out?
Speaker 2 (34:48):
Do you think?
Speaker 1 (34:48):
Or as long as I guess Trump is in power
and his acolytes and his successors, it's going to embolden
the cyber libertarians to actually want to get involved more
in politics.
Speaker 2 (35:01):
Oh yeah, I definitely think that's the case.
Speaker 3 (35:03):
I think I think a Musk, I think that he
has so tarnished the reputation that he spent years cultivating
that it will be really difficult for him to come
back from this, especially when you look at more of
a consumer facing business like Tesla, right, and especially when
you know your primary kind of customer base is going
to be environmentally conscious liberals as it was, right and
(35:27):
now he is kind of turning all those people off.
He might get some conservatives to buy a cyber truck.
But that's really not going to make up for the
people that he's losing, especially when you know, the market
for electric vehicles right now is such that you have
plenty of other options. If you feel that buying an
electric vehicle is you know, a kind of moral choice
that you want to make, right, you don't need to
buy a Tesla.
Speaker 2 (35:47):
You can buy you know, any number of other vehicles.
Speaker 3 (35:50):
And then I think the other piece of that too
is we're also seeing that, say, for example, Starlink, which
is another one of his big businesses in SpaceX, you know,
that is more focused on government, though there is a
consumer side of it, certainly with selling starlink. But even
then we're seeing, you know, as we were talking about
with digital sovereignty, a lot of other countries around the
(36:11):
world saying we really can't be reliant on starlink as
an infrastructure on SpaceX. We need to accelerate efforts to
have our own kind of alternative to this, especially in Europe.
And so you know, I think that that not in
the short term, but in the medium term, is going
to hit that business as well. And then if we
look at kind of more broadly within the tech industry,
(36:34):
I think that We're only seeing their ambition increase, and
they are going to try to get as much as
they can from the Trump administration while it lasts for
some of those that's reduced regulation, that's reduced taxation, and
using the power of the American government to try to
bully these other countries not to do regulations and taxes
(36:54):
of their own right, which we're already seeing. But I
think the other piece of this that maybe isn't getting
the attention that it deserves is what is this big
push that's coming from say, Palenteer and and orill and
you know, these kind of new tech defense companies that
are trying to really change how the United States does
aerospace and military contracting to make sure that a lot
(37:17):
more of that money instead of going to Boeing and
Lockey and Northrop Grumman, these traditional you know, kind of
weapons arms manufacturers, aerospace companies, is instead going to these
newer startups. And they are often pointing to SpaceX and
Starlink as the examples of they went in there, they
kind of shook everything up in you know, the rocket space,
in the space you know space.
Speaker 2 (37:38):
Space, if we want to put it that way.
Speaker 3 (37:40):
And you know, now we are coming in to have
these AI you know, implementations for military, these new kind
of drones and other kind of military hardware, and the
US government.
Speaker 2 (37:54):
Will save a lot of money by allowing.
Speaker 3 (37:56):
Us to do it more efficiently if they kind of
turn their money spigot much more in our direction.
Speaker 2 (38:01):
And that is what they're.
Speaker 3 (38:02):
Really trying to capture there as well, and I think
we're going to start seeing a lot more of that.
Speaker 1 (38:07):
Wow. So just finally, I mean, as a small nation,
limited resources, very much already the tech stack we rely
on as US centric, We've got the majority of our
infrastructure in terms of the applications we run. The whole
New Zealand government runs on Microsoft essentially a little bit
(38:27):
of a WUS and that to avoid sort of sleep
walking through this whole situation, we do have a right
leaning government that is very keen on low regulation, has
introduced no regulation around AI, basically wants the light touch,
proportionate and risk based approach to AI. What should we
(38:48):
be doing, if not this government, the next one or
policymakers people in government, what should they be thinking about
when it comes to digital sovereignty?
Speaker 3 (38:56):
Yeah, it's a really great question, right, And as I
was saying I think that there's many different approaches that
they can potentially take right what is kind of the
low hanging fruit or the easier thing for New Zealand
to try.
Speaker 2 (39:06):
To do to start to advance some of this.
Speaker 3 (39:08):
But for me, the thing that I would say is,
I think that we're seeing a lot of countries that
are traditional allies of the United States are saying we
really can't rely on the United States in the way
that we thought right in the way that we used to.
And already in the military dimension, I think that we're
seeing that change, at least in Canada and Europe. We're
talking a lot more about what kind of military alliances
(39:30):
look like that are not so dependent and reliant on
the United States that can't take it as a reliable ally.
But I think that we should also be looking at
that through the lens of technology and saying, how can
we work with these countries who you know, we know
are going to be with us, you know that we're
we know we're not going to have to question whether
they are our friends, and how can we kind of
(39:52):
strengthen those bonds, strengthen those relationships, not just in the
military sphere, but you know, culturally, socially, politically, technologically as well,
to work much more strongly with them and on the
technological sphere, you know, to start thinking about what it
looks like to have these infrastructures, to have these platforms
and digital services that are not coming from the United
(40:13):
States that maybe are developed on a different model, that
are more focused on the public benefit rather than increasing
share price and all that kind of stuff. So that's
where I would really hope that we, you know, start
to think seriously about doing something differently and to really
take advantage of this Trump moment that's going to have
a lot of negative consequences to get something positive that
could come out of it.
Speaker 2 (40:33):
Yeah, and this is an opportunity.
Speaker 1 (40:35):
I mean, if we're going to get whacked with tariffs
on trade with the US, maybe we do more with Canada,
do more with our traditional allies like the UK and Australia,
and maybe even China. We have a free trade agreement
with China. Why not buy more take from them totally.
Speaker 3 (40:52):
You know, I'm not sure I would necessarily advocate just
switching from dependence on the US the dependence on tride
sird way exactly.
Speaker 2 (41:01):
Yeah, Yeah, but you know.
Speaker 3 (41:02):
I think that there's a lot of opportunity there, and
coming from Canada, I often say, you know, I know
they're smaller markets and stuff, but like, you know, why
are we not dealing with them working with Australia and
New Zealand more often? You know, why are we not
looking at Europe more? Why are we not looking at
our friends in South America more? Obviously, you know, geography
is part of that because we've been so close to
(41:23):
the United States, we've been so kind of economically integrated
as a result of that. But I think now as
a moment to step back, not just for Canada, but
for you know, these other countries as well, and start
to say, how can we work together, you know, in
a more concerted way to have these mutual benefits and
to recognize that we all don't just have to be
so focused on the United States, but can start working
(41:45):
with our with each other alongside of that, and maybe
kind of decenter the role of the United States in
this kind of you know, Western alliance that that we've
traditionally relied on.
Speaker 1 (42:03):
So I see a lot to like there in Paris's
third Way, which could involve New Zealand partnering with countries
other than the US and China in pooling our resources,
developing alternative platforms and services that serve the public good
rather than just private profit. We can and should be
pursuing this sort of thing with Australia, the UK, the EU, Canada,
(42:25):
Japan and other nations. We sort of have to if
we accept the fact that the US may no longer
be the guaranteed or reliable partner for digital infrastructure that
we always expected it to be. So interesting stuff there.
Thanks to Paris for a thought provoking conversation. I really
want to know what you think. Email me on Peter
(42:45):
at Peter Griffin dot co dot in zad or leave
a comment on the podcast post I put up on LinkedIn.
Show notes are in the podcast section at Business deesk
dot co dot in za and don't forget you can
stream the podcast at iHeartRadio or your favorite podcast platform
of choice. Thanks for tuning in. Next week, we catch
up with Reuben Davidson, Labour's a new spokesperson on all
(43:08):
things science, innovation and technology, to see if his political
party has anything promising to offer policy wise as an
alternative to what the coalition government is pushing through at
the moment. That's next Thursday, and i'll catch you then