Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:14):
Welcome to tech stuff. I'm os Voloshen here with Cara Price.
Hi Cara, hi os So. I recently talked with a fellow,
Britt who reminded me of something that I think you
Americans often take for granted.
Speaker 2 (00:29):
The center of gravity for the tech industry is so
much on the West coast of the United States. It's
you know, you could imagine the whole thing just tipping
over into the Pacific Ocean. It's so it's so heavy.
And that's great for California, it's great for Seattle at
Washington State. But it's worrying and it should be of
a great concern to the rest of the world. What
is our future? Are we just going to be takers
(00:50):
not makers?
Speaker 3 (00:51):
You know, it's really interesting because as an American like
I rarely imagine what it's like to be a taker
rather than a maker, because so much innovation comes from
our tech sector.
Speaker 1 (01:04):
You know, that's right. Nick McEwan has seen the story
play out from both sides of the Atlantic. He built
rather an impressive roster of credits, Professor of computer science
and electrical Engineering at Stanford, Unicorn founder, and a meaningful
claim to having built the Internet. His work formed the
(01:25):
basis of Cisco System's GSR router, which at one time
made up seventy five percent of the backbone of the Internet.
But Nick recently returned to the UK and he's become
particularly concerned about the fate of Britain's technology sector because
he in fact sits on the Prime Minister's Council on
Science and Technology, which.
Speaker 3 (01:45):
Is like an incredibly powerful position to have. But I'm
also biased because of how much power this US administration
handed over to Elon Musk and Doge briefly, very briefly.
Speaker 1 (01:57):
But I'm glad you brought Doze up because I couldn't
resist asking Nick when we first met on the phone
whether he was Britain's Doge. He laughed in that classic
English way, which I think was his way of deflecting
and saying I think you just did it, his way
of saying get lost. But of course when I got
him into the recording studio, I had to ask him
(02:19):
what he thought about Doge and how Elon ran it.
Speaker 2 (02:22):
Immense respect for him as an entrepreneur and as a technologist.
I think that he's brought about some of the most
incredible technology, brought it to market. I think it turned
out that he wasn't so good in the political sphere.
I think the sort of the slash and burn approach
to trying to streamline government just showed that he didn't
have the experience didn't work, and I think it was
a pretty much in a visible failure. I think the
(02:44):
real sad thing about that is the wasted opportunity. I
think everyone who looks at the US government the British
government can say, of course it can be streamlined, of
course it can be improved, and by the abysmal way
that he handled it, it set us back a long
way because it's going to be very hard for someone
else to step in with the same role and say
(03:06):
that they'll give it a go. I don't think anyone's
going to trust that someone could do that.
Speaker 4 (03:10):
Well. I'm curious, like how exactly is Nick helping the
UK government be more efficient and like, how does he
see you know, this role being something that could actually
be effective as opposed to dismal.
Speaker 1 (03:24):
Yeah, unlike Dough, she doesn't have executive function. He's literally
an advisor, right, and one of the things he's most
interested in is how Britain best positions itself for the future.
We spoke a lot about AI chips, and interestingly, Nick's
great ambition for the UK is to take second place
behind the US in chip manufacturing. He wants, he wants
(03:47):
to bet, but lifts on the rise right now.
Speaker 4 (03:49):
Some people would argue it's better to be left.
Speaker 1 (03:51):
Nick also sits on the border of this government agency
called ARIA, the Advanced Research and Invention Agency. For me,
it was just cool to get an inside view on
how my own country's government is positioning itself for this
new technological age, especially the time when something else I'm
fascinated in, which is how many nation states are starting
to get deeply involved in the private sector, starting to
(04:14):
kind of be market participants themselves, like you know, the
US investment in Intel under Trump. And actually Nick, funny
enough was a senior figure at Intel for many years.
But without further ado, here's the rest of our conversation.
So on Earth persuaded you to depart from sunny California
to rainy Britain to advise the British government to move
(04:37):
from the future to a place that often looks like
the past.
Speaker 2 (04:40):
You know, I left the UK in nineteen eighty nine
as a somewhat angry twenty six year old feeling there
was no future for someone that was interested in technology
and the UK. It was the time of the Thatcher government,
where all of the emphasis and focus was on the
city and growing the financial institutions. You could look at
and say that that paid off, but they came at
(05:02):
the cost for technology, and it just seemed that engineer
was still a dirty word. Back in nineteen eighty nine,
I left saying Okay, I'm done here. My tribe is
in California. But in the meantime, you know, it would
be easy to say, oh, the UK just languished. You know,
we had our ups and downs, and there was certainly
some big missed opportunities we had over the years. But
(05:22):
I really felt as though something was changing. There was
a much more of an optimism about our opportunity, both
in AI and in technology more generally. I'd seen that
firsthand through interactions with UK companies, UK universities, so I
felt sort of felt the ingredients seemed to be coming together.
(05:44):
And I'd started to read about ARIA, you know, a
whole new bold way of funding research from government. Thought okay,
you know there's there's something that's changing there. And you know,
I'd been it fairly involved in a number of government
funded research projects Stanford, from NSF, from Darper, and various
other sources, and so it was very familiar with how
(06:05):
that worked in the US, and you know, as a consequence,
I then got more involved with ARIA and joined their board.
Speaker 1 (06:12):
The paradigm established by Elon and Doge was basically, technologists
are better than bureaucrats at deploying technology and creating opportunities
for technological growth, which should be kind of national strategic priority.
I mean, it's interesting because the mission of DOSE was
(06:32):
really around slashing and cutting, whereas you know, the lesson
you might take from Silicon Valley and the extent to
which it was built on the foundation of government investment
from the United States government over the last decades and
the extraordinary concentration of wealth and power that investment created,
both the Silicon Valley, but you know, more widely for
(06:54):
the United States. As you think about what you're trying
to do in the UK, it sounds like it's much
more in that latter camp.
Speaker 2 (07:02):
Yeah. Absolutely, I'm an enormous fan of careful, thoughtful, bold
investment by government in order to be able to get
things started and wherever possible, for government then get out
of the way, because the free market and startups and
entrepreneurship are a wonderful way to create economic growth. But
(07:24):
you can kick start them with investment in university's investment
in small companies in order to be able to get
this going. And Silicon Valley is a fantastic example of
this all across silicon value. We've seen how that model works.
So you know, I think what we can do in
the UK is several fold. First of all, we have
to look at strategically important areas that we can invest in.
(07:47):
One that I've been focused on in particular over the
last year is the AI chips, so chips for the
AI market. Nearly everybody that's making money, serious money and
serious economic growth out of the AI market are the
people building the chips. In Vidia being the bright shining
example as the most valuable company in the world, just
top five trillion dollars in terms of its market cap.
(08:09):
So you know, where is our role in all of this.
What is the opportunity for the UK. We have a
strong history in the semiconductor industry. We have a strong
history in computer architecture. You know the stories we built
the first commercial computer we built the first electronic memory.
We have ARM designs ninety percent of the world CPUs,
(08:31):
so we've got a strong history in this in this area.
How do we rebuild that in order to be able
to take a sort of a chunk of this opportunity.
To put it into perspective, the market value of Nvidia
is ten x that of open Ai. Yet when we
think of AI, we tend to think of companies like
(08:52):
open Ai and chat GPT obviously fantastic growth, but those
who are producing the infrastructure upon which it runs, they're
the ones that are bringing significant value and lasting value.
It takes a huge investment in order to build a
business like that, but this is where a lot of
opportunity is and it's growing currently at about thirty percent
(09:13):
per year. There are very very few markets that grow
at thirty percent per year. By twenty thirty three and
the current growth rate, the AI chip market worldwide will
be seven hundred billion dollars. That is staggering. Imagine if
the UK could reach up and grab five percent market
(09:35):
share of that seven hundred billion dollars global revenue, there
will be thirty five billion profitable, high margin dollars of
revenue into the UK. I think that is the opportunity
before us, and I think if we can be ambitious
and go after it and invest, train our workforce get
ready for it, it is an enormous opportunity for economic
(09:56):
growth for the UK.
Speaker 1 (09:58):
So it's working back from a premise of where you
need to be in ten years in terms of having
the best chip talent outside of the US.
Speaker 2 (10:06):
That's right, yes, and I happen to think that we're
in a very very strong position now. We need to
double our workforce in order to be able to do it.
We currently have about twelve thousand chip designers in the
UK and it's a slightly aging workforce, so we actually
need to move quite fast just to stay at the
status quo. But with an industry that's growing at thirty
(10:28):
percent per year, we probably need to double our workforce
within the next ten years. So we need to be
training a lot more people within the country. That's getting
more people into electrical engineering and computer science degrees. Those
are mostly people who are doing a level physics right
now in the UK, so you know they're the seventeen
eighteen year olds right now, and so you know, I've
(10:49):
been recommending to the government that they increase their bursary
scheme to incentivize and encourage more A level students to
go into electrical engineering so that they can be rare
to be chip designers in four or five years time.
And this sends a message, right, It sends a message
that this is important. We won't get there by training
(11:11):
our own A level students alone. We need to bring
in experience chip designers from overseas, So figuring out with
our visas and encouraging and incentives to entrepreneurs and chip
designers from overseas, encouraging outposts from chip design companies to
move to the UK. So we just increase that talent base,
(11:31):
we increase the concentration. And frankly, the US is not
so appealing for many people who are in science and
technology right now, and they'll say, actually, that's not somewhere
I want to go. I was just talking to someone
the other day, very experienced technologist who had recently moved
to the UK and who decided, I don't actually want
to move to the US right now. This is not
an environment that feels welcoming where I want to build
(11:53):
my career, where I want to move my family. I'd
actually much rather stay here.
Speaker 1 (11:56):
What do you say to people who are that we're
in a bubble right now? Obviously you were on the
inside at Cisco, which was briefly the most valuable company
in the world before the dot com crash. How durable
and sustainable is this compute build out?
Speaker 2 (12:10):
It will for sure have peaks and troughs, just as
we saw and the build out of the Internet. I
think it would be reasonable to expect that we're in
some kind of hype cycle at the moment. I have
no idea when that will plateau or when that might
have a sort of a correction, just as we saw
with the Internet in the nineteen nineties. It may be
a little bit like a small version of the bubble
(12:32):
that may happen in the future. But just think what
happened afterwards. The Internet didn't stop. It just took a
setback for a little while, and then it came back
with a vengeance. Yeah, we got rid of a lot
of the fluff that was being invested in at that time,
but the good companies survived. They continue to grow, and
all the social media companies that came along, all the
other Internet companies that came along, and then it made
(12:54):
AI possible because of the interconnection of compute the amount
of data that was available, and so I expect we'll
see the same thing happen with AI. It'll go through
cycles and plateaus, but long term, it's not a technology
that we'll forget. It's not a technology we'll say, oh, well,
we don't need this anymore.
Speaker 1 (13:13):
I mean, it's an interesting position for you because you've
got to observe and participate in the proliferation of the Internet,
and now the proliferation of AI is starting in your view,
and you get to actually advise the government on how
to think about it and how to prepare for a
future where the UK actually gets to capture part of
(13:34):
the value. But you also have to think about downside risk.
Speaker 2 (13:37):
I think you have to be prepared to make old
bets knowing that some of them won't work out, and
this is hard for government to do. Whether you're a
short term elected official or you're a longer term civil servant.
No one feels that they get rewarded for taking a
big bet that doesn't work out. So the most important
(13:58):
thing I think is to help government get comfortable with
the necessity of taking risk, and therefore the best thing
to do is to rather than thinly spread what will
always be a limited budget, particularly in fiscally tight times
like now, is actually to make a reasonable number of
(14:19):
bets and to go along with experts who have some
skin in the game investors usually or entrepreneurs, and work
with them or invest along with them in order to
be able to use their expertise. And I had said before,
I think the biggest growth potential that we have in
(14:39):
this country is in aichips, the design of aichips. I
don't think we should be manufacturing in them in the UK.
That's a nation state activity which is well beyond our budget. Actually,
the opportunity is to do what AMD and Invidio and
Broadcom do, three of the most successful companies in the world.
They design them. They create the intellectual property for the designs.
Speaker 1 (15:09):
After the break the race for second place in AI
chip design, stay with us. Welcome back. I'm as Velocian
(15:34):
and you've been listening to my conversation with Nick McEwen,
who sits on the Prime Minister's Council on Science and Technology.
Before the break, Nick mentioned that he believes the UK
government should help Britain be a power player in AI
chip design. But what surprised me is that Nick is
vying for second place.
Speaker 2 (15:52):
What I'm looking to do is to see how can
the UK be not first in the world. I think
we have to concede that the US has as pretty
much licked at this point, with a vast majority of
the AI chips being designed there and the products are
sold from the US. But who's going to be second?
(16:13):
Which country in the world is going to be second
in most areas of technology, that's China, We always say China,
and in fact often they come in, they commoditize, they invest,
like they did with solar panels and photovoltaics right, and
then anyone else that was trying to be in that
space basically was shut out and gave up. They can't
(16:33):
do it here. And the reason they can't do it
here is because AI chips use the most advanced processing nodes,
which in the semiconductor industry right now is three nanometers
or two nanimeter nodes. China can't use nodes below seven
nanometers at the moment because of export restrictions that don't
(16:55):
give them access to the technology that they need, so
held at Bay. So beyond the US, who are the
countries that are in the best position with the most
experience of doing chip design, that have an understanding of AI.
We are, after all the only country outside the US
and China that has a foundational model company deep mind.
(17:17):
We have a long experience of being architects and designers
of chips. If we can put those together, couple with
our universities, then we can be the second best in
the world. So we should be able to get much
more than that five percent that I talked about earlier.
We should be able to get more than that, So
it's a pretty conservative ambition.
Speaker 1 (17:38):
You mentioned ARM, which is one of the top chip
design companies in the world, founded in Britain, I believe,
but majority owned by the Japanese company soft Bank. Is
that a win for the UK chip industry and would
you be happy if creating the next ARM is part
of your legacy.
Speaker 2 (17:57):
I'd love to see ARM continue expand it's foot in
the UK. Has a significant number of R and D
engineers in the UK and to a large extent, it's
still very much a British company because of its large
footprint in Cambridge and other parts of the country, so
you know it is a true British success. Would we
have preferred that it's stayed as a UK company, of course,
(18:19):
but it's still bringing significant revenue and tax base into
the country. It's still training. They have a very big
training and internship program, so they are training the next
generation of chip designers, whether they work for ARM or
whether they go off and start their own companies. And
that's how these things work.
Speaker 1 (18:37):
You know, when you think about what it might look
like to own five percent of the market, what does
that look like practically in terms of the product people
will buy. Will it be I can't get access to
Nvidia and therefore are by British chips? Or I have
something which is less complicated and therefore I don't need
the top of the line in video chips, so are
(18:57):
by British chips? Or is that more ambitious? Is there
more specialized in applications that you think will be geospace
or whatever it may be that the Britain can win in.
Speaker 2 (19:06):
So I think it's good to make an analogy here.
We talked about Cisco earlier in the early days of
the Internet. They were clearly a very dominant company very
early on and became for a while the most valuable
company in the world. And what happened to them was
what happens to many companies at that scale, and then
they start to look at markets in terms of are
(19:27):
they big enough, and so what happened is there would
be new markets. Frankly, they weren't big enough, so they
didn't develop them, and so you had this whole ecosystem
of other companies that popped up producing them and lowerhol
those markets became a lot bigger over time, and so
it suddenly diversified the market and there were many opportunities
for other players in the AI space. The same thing
(19:50):
will happen. It's sort of inevitable that Nvidia will start
to look at some adjacent markets or smaller parts of
the market. Sooner or later, there'll be markets for which
they say, these aren't really big enough for us to
go after. They could be in parts of robotics, they
could be parts of factory automation, they could be in
autonomous drones, they could be in medical equipment. And someone
(20:13):
will come up with an innovation that fits that need.
And we have a number of promising startups, most of
them in stealth mode in the UK, who are doing
exactly that they're going after. Particular areas or different sort
of different techniques that they think will be more efficient,
that will go after specific portions of that market where
(20:34):
we can best serve the needs that will be unmet
by other parts of the market.
Speaker 1 (20:39):
Do you worry about the future of the UK if
we don't take advantage of this on stony generation opportunity.
Speaker 2 (20:46):
I think it's once in a generation because if we
don't step up and do it, others will and they
won't be room left for us. So it's one of
those things where we have to go and grab a
stake of the market because you have to be there
for the long term. You have to be there for
multiple generations to build the trust and the understanding for
the customers. Who are those customers. They're big hyperscalers, they're
(21:09):
people that make cars, they're people that make robots, and
their system integrators generally people who are building systems out
of those chips. If we stay in the market for
a while, we'll have more of those system companies in
the UK. Today we don't really have a large system integrator,
someone that takes the chips and builds them up into
systems in the UK. If we're building the chips, those
(21:31):
companies will come along. We'll build that expertise.
Speaker 1 (21:33):
You mean cars factory like high tech manufacturing back on
British shaws.
Speaker 2 (21:37):
Yeah, robots, autonomous vehicles, drones. If we're building the chips
and we have the ambition they will come. We'll then
develop packaging technology for putting more of these chips into
one package, will gain a broader expertise and that's then sustainable.
It's very difficult for that to then fail once you've
got that broad expertise across the market as a whole.
(22:02):
So if we don't do that, we won't have that,
we won't get that revenue, and we will eventually be
crowded out and it'll be very very hard for us
to make in roads.
Speaker 1 (22:12):
Let's talk about manufacturing versus design. You are pushing the
UK to rush towards second place in terms of the
second leading chip designer in the world after the US.
The US is thinking about sovereignty and chips very differently,
which is thinking about how can we ensure the actual
manufacturing of the chips. Right, and you have a background
(22:35):
and work at Intel, I think a still of senior
advisor there. The US government took a direct stake in
Intel Recently, Intel is spending tens of billions of dollars
on its new chip fabrication plants here in the US.
What's happening in the US in terms of thinking in
political terms about sovereignty of chip manufacturing and how's it
(22:57):
different from the considerations in Britain.
Speaker 2 (23:00):
You know, I think that it's very important to think
of the distinction between the design of a chip and manufacturing.
I'm sure you know this already, but I think it's
it's good to be very crystal clear about it. Think
about when you're designing a building a house. You have
an architect who draws up the plans, and then you
have a contractor or a builder who will building. They
are two very different skills, three different skill sets that
(23:20):
involve a very different group of people. The design is
like the architect, it's where the creativity. It's the understanding
of what's possible, the understanding of what you're trying to accomplish.
And then there's the building, which is sort of the
execution of that design of turning it into the into
the building or into the chair. Today, it costs about
(23:40):
twenty five billion dollars to build a manufacturing plant for semiconductors.
You need to be all in, you need to have
a huge economy, you need to have a very big
determination to be a part of that industry. And the
US has been part of that for a long time
through multiple companies IBM, Intel and now Global found But
there's a lot of expertise in the US, so it
(24:02):
provided a good base to be doing that from including
the US economy is much bigger and can off forward
that kind of investment. It also has a strategic imperative,
which is as a strong global presence. The US felt
that it was strategically important not only for itself, but
for all its allies, for the rest of NATO, and
(24:25):
for its friendly nations, which includes US. So to some extent,
we get to ride on the coattails of that American investment,
that American expertise, and that American ambition as the US
rebuilds and on shores that manufacturing through its investment in Intel, Anti,
SMC and others in order to make sure that there's
(24:46):
lots of manufacturing. And as you know, there are multiple
manufacturing plants being built across the United States in Arizona,
in Oregon, in many parts of the US and We'll
see more of that happen over the next few years
because of the approach that the US government is taking,
and the great thing for US is that means we
don't have to.
Speaker 1 (25:07):
The US has those same challenges you outline for Britain though,
in terms of is the workforce prepared enough for this
type of advanced manufacturing and is the immigration system flexible
enough to allow the people who can do a great
job of that to come in. I mean the images
of the Hundai plant are unforgettable.
Speaker 2 (25:23):
Yeah, yes, I mean I answer where your question is
coming from. I don't believe this applies to the semiconductor industry.
We have been producing leading edge chips in the US
for generations. You have to go and visit Arizona and
you see the long line of plants that Intel has
their multiple generations, huge numbers of people that have been employed,
(25:44):
very skilled operators that are expertise in manufacturing. You go
down the road, you see the same thing at TSMC,
so that is already there. It's already present. Yes. Sure,
the US may have more stringent requirements on environmental regulations
on where you place those plants. It may not have
(26:05):
the same sort of openness to immigration that it once did.
But there are plenty of people in the US. There
are plenty of high paid jobs, and it's the sort
of jobs that many many people are trained for in
the US way more than they are here in the UK.
So actually very confident that the US is in a
very good position to be able to rebuild its manufacturing strength.
I think it's a long long way down that path already.
Speaker 1 (26:28):
Just to close. I mean, it sometimes seems like there's
this kind of new statism emerging where you know, in
the past, people in the US or the UK would
look at China and say, there are these state and
enterprises and the private companies are very subject to the
demands of the Communist party, and that's one approach to
technological buildout. We in the West have a completely different one,
(26:52):
which is all to do with private markets, and it
seems to the market and the role of government, you know,
should not really interfere in the technological innovation and build
out process. It seems like of the course of a
very short period of time that's completely changed. So how
would you describe this new paradigm that's emerging in What
(27:15):
are the risks and what are the benefits?
Speaker 2 (27:16):
Of it. So I actually want to push back on
the premise. I think the posters that say that that's
how the US operates and not really telling the truth.
The US has been a major investor in R and
D manufacturing over a very long period. Yes, of course,
not the same way as China, very different approach, but
in terms of investing heavily, this has been the history
(27:37):
of the success of the United States, whether it's through
funding into research from the National Science Foundation, National Institute
of Health, from DAPER, etc. All the way through to
government investment. So yes, sure, free market capitalism and capital
investment is a very important part of the process, but
(27:58):
generally that comes along later when you started to see
the success. We should always be looking to see whether
we should make an investment in order to be able
to get that edge. The whole world economy today runs
on chips, not just AI. Just to remember what happened
during the pandemic when there was a shortage of chips.
The automotive industry, worried about the economic downturn during the pandemic,
(28:21):
said we don't need to buy the chips, okay, So
the chip companies turned around and sold the ball to
the data center companies that were growing. The automotive companies
came back a few months later and said, oh, turns
out there's an uptick in the economy and people are
buying cars again. Chip companies said, sorry, we've just sold
all those chips to others. You're out of luck, and
there was a catastrophic effect on the world market. I
(28:45):
joined Intel as an executive running the network and communications
business in twenty twenty one in the middle of the pandemic,
and I saw this firsthand as companies were duking it
out for access to chips. It was a very stressful time,
so we could see how important it is to the
underpinnings of the world economy, which is why everybody should
(29:07):
be worried about China's ambitions for retaking Taiwan and reintegrating Taiwan.
The risk there of it disrupting the foundation of the
world economy are very real, are very palpable, and so
it makes sense for the US to be leading the
charge and trying to rebuild that semiconductor manufacturing capability on
(29:28):
its own territory. It's not specific to this particular administration.
Is the need that will live throughout multiple administrations. I believe.
Speaker 1 (29:36):
Thank you so much, Nick every appreciding the time.
Speaker 2 (29:38):
Oh thank You've been really enjoyable.
Speaker 4 (29:59):
That's it for this week for tech Stuff.
Speaker 1 (30:00):
I'm Kara Price and I'm os Valanschan. This episode was
produced by Eliza Dennis, Tyler Hill and Melissa Slaughter. It
was executive produced by me, Kara Price, Julian Nutter, and
Kate Osborne for Kaleidoscope and Katria Norvel for iHeart Podcasts.
Jack Insley mixed this episode and Kyle Murdoch wrote.
Speaker 3 (30:18):
Our theme song. Join us on Friday for the Week
in Tech, where we run through the tech headlines you
need to know.
Speaker 1 (30:23):
And please do rate and review the show and reach
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We love hearing from you.