you all. ♪ television has changed since c-span began 41 years ago, but our mission continues, to provide an unfiltered view of government. already this year, we have brought you primary election coverage, the presidential impeachment process, and now the federal response to the coronavirus. you can watch all of our public -- ons television until air, online, or on the radio. c-span, created by private industry. and broughtservice, to you by your television provider. >> brad smith, microsoft

president, what is the premise of your new book? >> it is that digital technology has become both a tool and a weapon, creating kinds of benefits and all kinds of challenges as well, and we have to grapple with both sides of the equation. >> your book is essentially a world tour that begins in quincy, washington. why? >> because it is one of the data center capitals of the world, if you will. it is near the columbia river. data centers are being built there because it is close to hydroelectric power that is cheap and clean. we take the reader on a tour of what is becoming the infrastructure of the 21st century, these mammoth buildings, more than 20 of them, filled with electrical generators, thousands of batteries, and mostly server computers. everything we do almost every day is accessing or storing our data in the cloud, which really

means one of these data centers. peter: you have 100 of these in 20 countries? brad: more than 20 countries, more than 100 data centers. microsoft is one of the largest but google, amazon, facebook, apple, are all building more and more of these data centers. it is where we are all storing our data. they become the largest consumer of electricity in the world. peter: if i send an email from microsoft outlook from here in the office to somebody in the office, does it go through the microsoft data center? brad: it doesn't have to. you can use it in a form where you store it on your laptop or store it in a computer in your office, but the world has moved to the cloud over the last decade. it is cheaper, more secure, you are always going to have the you can rely on microsoft cyber security team rather than say those in your office.

so the world is shifting and most technology is moving in this direction. peter: what does it cost to build one of those buildings that you say is about the size of two football fields? brad: any time we open a new data center, by definition it's an investment typically of hundreds of millions of dollars. if you look at microsoft, if you look at the other industry leaders collectively, we're easily spending several tens of billions of dollars a year just in building these new buildings, connecting them electrically, putting all the computers inside them. peter: what kind of investment do you make in securing that cloud? brad: it's a fascinating piece of this. of course it's enormously expensive. it starts with the physical security. you cannot get into the ground, around these premises, the physical security is certainly tighter than what you would see in a commercial airport. but it's really the network security that's more important still. so we spend a billion dollars a

year just on new security features. at's really r.n.d. and innovation. we have 3,000 security engineers protection the protection of this has become a huge priority. peter: brad smith, you say that you were search on your way out of this facility as well. brad: yes. it's fascinating because you're not surprised when you go into a data center and before you go into the inner san tum so to speak, the room with the computers, the servers, you have to go through a second very tight airport-style mettle detector. but then you're searched when you leave as well. why am i being searched to leave? i don't get searched when i leave the airport. and so no one can walk out with a hard drive. literally the only way the hard drives leave that room at the end of their life is by first going through what is a huge machine. it's the equivalent of a paper shredder but this is for literally metal hard drives. and then it leaves through its own special exit.

peter: you write in your book "tools and weapons" that ireland is to data what switzerland is to money. what do you mean? brad: ireland is a great place to store data. and switzerland is regarded across europe, across the middle east -- around the world in many ways as a safe place to store money. it's secure. ireland first of all is a great place to build data centers. the temperature is mild. you don't typically have to turn on the heating or the air conditioning and uses less electricity as a result. but more than that, what we really mean is it has a network of laws that protect privacy, that protect data. it has a stable government. it's part of the european union. so it has access to the rest of the e.u. for moving data back and forth. it's one of the world's most attractive places to store data. peter: but it's an island as well. don't you need cables to connect? brad: well, that is a fascinating part of this story

as well. the irish government has long had a lot of forsythe i would say when it comes to planning for its economy and thinking about technology plags the american tech sector sort of got started in ireland in the 1980's. it's where everybody manufactured their c.d.'s back then. so as we got close to the year 2000 the irish government came to us in the united states. they saw the future. they said make ireland the place to build a data center. we said but you don't have any cables to move data to the continent. and they said give us three months. we will go solve that problem. and three months later, they had. they came back. they had entered into a contract and the cable was just about to be laid. and the rest is history. because ireland really has become a place where by our calculation about 35% of all european data is stored in ireland. peter: so brad smith, what's the advantage of having these data security locations, these clouds, as tools? brad: well, as tools, they are

really enabling businesses to do new things. first of course perhaps driving down costs. and enabling businesses and governments and others to rely on other people's advanced security protection. but fundamentally what all of this is doing is enabling people to use technology in new ways. we really have in our view entered a new era. it's an a.i. or artificial intelligence-based era. if you think back to the first half of the 20th century, the combustion engine changed everything. led to the car, the tractor, the truck, the tank, the airplane. over the next three decades, a.i. will have a similar impact. it's already making it possible for machines to understand speech, what people say. vision, to understand people's faces, to recognize people, to translate between languages, all of that is based on several things but perhaps the most important is this large amount

of computational power of data storage in the cloud meaning these data centers. peter: you also in your book "tools and weapons" talk about the weaponization of data. which is what? brad: well, it too is many things but i would say it starts with cyber attacks. it starts with headaching by organized crime. it starts these days with hacking by nation states. hacking of political campaigns and think tanks and the like. it includes disinformation campaigns. it includes the potential hacking of voting and elections. it includes a variety of other challenges that may not be weapons per se but when we think of the impact of all of this technology on our jobs, what is it going to mean for our people, our jobs, our children, their jobs? all of these are the challenges that technology is creating. peter: and you -- that takes us on our tour to north korea, russia, and china, doesn't it?

brad: it absolutely does. as well as iran. we're seeing certain governments around the world be particularly aggressive. we measure this every day. we see the attacks that are taking place. we have been public in saying that we've seen the most attacks over the last few years coming from russia, north korea, and iran. especially attacks that tend to be more focused on our civilian infrastructure or on our electoral processes in particular. peter: what is microsoft's business interests when it comes to china? brad: well, i think we want to serve our customers when they do business in china. china is not as large a market for us as it is for some other tech companies. china has 18% of the world's people. it accounts for 1.8% of our revenue. but if an american company wants to go to china to sell coffee, we want to be able to

use our services in china the same way it does everywhere else. if there are consumers in china who want to use windows on their laptops, office, to write their documents, to send their email, we want them to be able to do that. so we want to participate in that economy. we want to participate in the global economy in a thoughtful way, in a way that actually is focused on u.s. national security and the protection of human rights. but also serving people who in our view need to be served. peter: but in "tools and weapons" you talk about the fact that microsoft does judge a nation on its human rights score, correct? brad: before we open a data center in a new country, we evaluate many things. do we have access to electricity? to water that's needed for a data center? do we have concerns about corruption risk and the like? and we have -- evaluate human

rights. we use that human rights evaluation to make decisions. there are some countries where we won't place a data center because we feel that once the data is gh that country, we can't protect people's rights the way they need to be protected. and there's other countries where we will put data. this is china as one of them. but we won't put our consumer services. so we have, for example, a consumer email service outlook.com is its current name. we don't offer it in china because we don't feel that we can strike the balance we want to strike in terms of protecting human rights. peter: and with china moving toward this social credit system that they're having, are we in danger of perhaps having two worldwide webs, two internets separate? brad: i think over the past decade, there has been a trend in that direction. i think that one sees two countries in the world today that tend to be producing the most tech leaders.

it's the united states and it's china. you see less american technology in china. you see less chinese technology in the united states. you see different laws, different public policies. you know, to some degree even some distinctions in business practices. and then you see competition, especially in places like europe as they decide where they're going to buy, who they're going to buy from. peter: brad smith, you call for regulation in this book. and in fact bill gates in his forward points out the anomaly of a business leader calling for more regulation. but you're writing that you need that. you need to have that regulation. brad: i think we need two things. we need businesses in the tech sector to step up, exercise more self-regulation and a higher commitment to responsibility. but we do think we need more regulation of technology. think about how we live our lives. if you go to the grocery store

and you pick something up off the shelf, you will read the nutrition label, knowing that it's standardized and accurate because of regulation. if you go over to the pharmacy department and buy a product, you don't worry about the safety of it. because it's regulated. when you get in your car, it complies with certain safety standards the same is true of an airplane. our basic point is that digital technology has gone longer with less regulation than almost any technology since the middle of the 1800's. we think that the market customers and even the industry itself would be better served for the long term with a different balance. peter: well, that kind of takes us to washington, d.c., because bill gates took a lot of pride in the fact that microsoft did not have a d.c. office for a long time. brad: and bill points out in his forward that he did take pride in that. and then he learned that there were probably some better things -- there were clearly some better things in which he could take pride. and we are here today.

we're in actually 56 capitals around the world. peter: you conclude your book by saying technology, innovation is -- is not going to slow down, the work to manage it needs to speed up. brad: we really do believe that governments need to speed up. i used to come to washington d people 15 years ago here didn't understand technology deeply. i think many times today, they often do. they understand it much better. and i think to some degree politicians get a bad rap. i think journalists look for the opportunity to point out oh, here's a politician that didn't ask the right question or here's a politician that didn't ask the question the right way. and i think that's frankly a mistake. i don't think it's accurate. i don't think you actually serve anybody well whenever you criticize them for asking a good question the wrong way. the truth is we have regulators

and politicians today that have figured out how to regulate very complex pharmaceutical products. we have people today that regulate airplanes that are basically computers with wings. they regulate the safety standards for cars. they're basically computers on wheels. we have people who are perfectly capable in washington, d.c. of regulating computers that don't move at all. they sit in a data center. and i think as a country, as a world, we need to strike a balance with a healthy dose of regulation. peter: so when it comes to privacy, what would microsoft like to see? brad: we would actually like to see a strong national privacy law in the united states. we have been advocating for that. i personally have been advocating for that since the year 2005. you can see how little impact we've had in washington, d.c. on that issue over the course of a decade and a half. but we think it's actually a good thing that california

adopted a strong privacy law last year e we think it's a good thing that that is now bringing the debate to washington, d.c. i think that the american public, consumers, customers, even tech companies will be well served if there's a good privacy law, a strong prichecy law in the united states. i think for the next decade, what we really need is more of a global privacy compact. data moves around the world. you don't actually want the protection of people's privacy to constantly change every time data crosses a border. and we'll only get that when we bring governments together. eter: what do you think of the european gdpr? brad: on balance we are pretty enthusiastic about it. we have been more enthusiastic about it than most companies in the tech sector. peter: is that because you do different things? or -- brad: to some degree you can say we do some different things of the we're not as focused on monetizing data through behavioral advertising and the

like. but i think in part it reflects our own experience with laws, with regulation, the antitrust cases that we learn from when they unfolded in the 1990's, in the early 2000's. i think in some respects it reflects a belief that a market will work best and the companies that participate in it will succeed the most for the long term if consumers have confidence. peter: mr. smith, what's the current status of international cooperation on these issues? brad: i think that there are signs of progress and a lot of heffed winds. you see signs of progress on cyber security, on issues like digital safety. we've seen some really impressive leadership last year by the french government, this year by new zealand prime nister jusinda agur in the christchurch terrorist attack to advance digital safety. and i think that is creating a

model that we can look to more broadly. but we're also living in a time when multilateralism is less popular certainly less popular in the united states than perhaps any time since the 1930's. and in part, our book is a call for governments coming together with companies, with sism society in a multistakeholder approach. we just don't see any other effective alternative for addressing the challenges that people care about. peter: christchurch, new zealand, takes a part in your book, too. brad: it does. by coincidence really, we were in new zealand 12 days after the christchurch attack. during the course of the day, prime minister ardun's office reached out. we heard that she wanted to meet with us so of course we did. it was a fascinating conversation. she said look, i just don't want to see what happened in christchurch repeated. and what happened there was different from other terrorist attacks because the attacker

really used the internet as a stage. it was streamed live on facebook. it was uploaded probably millions of times on youtube. it's the kind of thing that actually can incentivize terrorism if we're not careful. and so we said let's see what we can do together and really thanks to her leadership more than any single thing, she got on the phone. she called other tech leaders. we worked with others across the tech sector. and it led to what's called the christchurch call. it was signed in paris by september in new york at the u.n., there were more than 50 governments that had signed up as well. but it has facebook and it has google and it has youtube and has amazon and has twitter and has microsoft. and we've all committed to take now some very concrete steps that i think make it harder, certainly harder for any trichet to do what was done in christchurch. peter: how often do you find yourself and this is something

you write about working with the federal government and/or suing the federal government? brad: well, we work with the federal government every day. and we probably sue the federal government on average every year. so that's the balance. and of course once a lawsuit starts, you have to continue it. we never sue our own government without a lot of thought. and without believing that a real principle is at stake. but we have brought litigation several times. both to stand up for what we believe are important privacy rights for power customers and during the last couple of years as well as to stand up for our employees who are protected by dhaka. we have 66 employees who are dreamers. and so we thought that was another important case to bring. so we did so. peter: when it comes to privacy, what's one of the cases that you pursued? brad: well, most of the privacy cases we pursued have been about giving people, businesses or individuals, more knowledge

or information about when the government is obtaining their data. so this started in 2013 when we argued successfully that we had a first amendment right to start to publish data generally about how many kinds of national security orders that we receive. one issue that we continued to litigate is the right that we believe businesses have so that when the federal government wants their data, in the vast majority of circumstances, we believe that the government should go to the business and not come to us or some other cloud service provider. that's the way this country worked since it was founded. and until the cloud was created. if you ran a business, and if you had emails, or documents, that the federal government wanted, they had to go to court and get a warrant and serve it on you. and therefore you knew about it. you might have to turn over the information but you could then go to court to protect your rights. what we don't want to see is a

present or a future where the government only comes to us and you don't even know that the government has your information. you can't stand up for yourself and defend yourself. so whenever we see cases like that, and we do see them periodically, we try to negotiate an outcome with the department of justice and if we fail and we believe that the facts are on our side, we go to court. peter: mr. smith, edward snowden revealed quite a bit and he features in your book as well. was the government stealing microsoft information surreptitiously? brad: well, i would never use the word stealing. and i would be quick to add that even six years after the snowden disclosures, there's a lot that we still don't know. and there's a lot we may never know. and that might even be appropriate in certain respects when it comes to national security and state secrets. but we do talk in the book about the coverage of "the washington post" in october of 2013.

we do talk about the reports that suggest that the u.s. government either by itself or with the british government was tapping into cables, potentially under sea or land-based cables to access data, that it may have been happening outside the use of warrants and therefore the rule of law. so we were explicit then that that was something that concerned us. we were explicit with the white house and president obama then in saying look, there needs to be some reform. and there has been some important reform in the six years since. so i actually think that it's good that generally speaking we learn more, the world learned more. and we could address perhaps a bit of an imbalance. peter: do you feel that microsoft's management of data is secure today? brad: i do believe -- peter: from prying eyes like that? brad: i would say the answer is yes. and the reason i would say the answer is yes is in part

because of technological changes that microsoft and others in the industry have made. one of the responses to those disclosures was to deploy stronger encryption basically comprehensively so it means that whenever data is moving between data centers, it's encrypted. whenever data is stored on our servers it's encrypted. so if any government and this is not by any means a question that anyone should think is confined to the u.s. alone, if any government tries to tap into data, it is highly unlikely to be able to read even what it obtains. but more generally, i feel more confident not just because of these technical advances in cyber security protections but because of the legal reforms that have been adopted in the united states, similar legal reforms have often been adopted in other countries and i think that's a good thing, too. peter: and we haven't even cracked the code yet when it comes to regulation or looking

at a.i. and facial recognition technology. brad: well, this is one of the big questions for the 2020's. we suddenly live in a world where, you know, a government can if it wants use cameras and computers and facial recognition to identify everybody who walks down a street. we are seeing this in some parts of the world. we do believe that we need to put in place controls. we do as a company so this isn't used in ways that we believe would conflict with human rights say in countries where human rights are not protected adequately. but we need laws as well. i think a very important question, even in the united states, is when should law enforcement be able to use this technology say to follow you everywhere you go? we would say probably the way it goes and gets access today by getting a search warrant from a court. but that's a debate that we need to start having in the united states. and we need to start talking

about what this technology means for -- we would say values that are really timeless. peter: brad smith, your president of microsoft, microsoft also has a c.e.o. and has bill gates. what are your duties? brad: well, i play several roles in the company. but i think one of the most interesting certainly is to really be on point for these issues where technology meets society. there are so many issues today, sustainability, privacy, security, responsible artificial intelligence, digital safety, where the world has a different set of expectations of us and -- than it did a decade or two ago. this requires that we bring people together across our business. because we need to innovate in this space. but it also requires that we connect with the rest of the world, with people in government and elsewhere. because this is a journey that we're all on together. and requires not only action by companies, it requires new steps by government. peter: you join microsoft in

1983. brad: 1993. peter: sorry about that. how has the company changed since then? brad: well, when i joined microsoft, had just over 4,000 employees. and today it has 150,000. so the first thing you see is that everything is bigger. when you are big you have to find ways to move quickly in a new form. because obviously moving a big group of people is a lot harder than moving a small group of people. when i joined in 1993, technology was not something you read about every day unless you were sort of a tech geek or maybe an intellectual property lawyer. obviously it has become the single most defining element of our times. we live in a technology era. it means that the world has questions and we need to answer them. it means that people want to understand technology without having to go get a ph.d. in computer science. so part of what i need to do

and part what a lot of us need to do and we have a great team that does it is actually serve as translators both to help people understand what the issues are and to help our engineers understand what's on people's minds. peter: and you're joining us here in washington where the jedi contract by the pentagon has been awarded to microsoft. but there's a challenge by a fellow seattle company. what's the status? brad: well, microsoft and amazon and other companies were competing for what is clearly a very important contract for the future of the pentagon. to help its enterprise, architecture and data moved to the cloud. we were delighted when the pentagon awarded that contract to us. amazon has filed a protest which is not unusual. i think for people who live in washington, d.c., distinct from washington state, you know, protests barely make it into the news they're so common. for us, we have a job to do. one thing i say to our own employees is every contract is

important. and some are even more important than others. it's hard to imagine a contract that is more important than this. because now we really have a high responsibility to help the military protect this country. so there is a protest. there will be more work for lawyers. but we need to focus on is doing our job and building the infrastructure that the pentagon is purchasing. peter: brad smith is the president of microsoft and he along with carol ann brown have written this book "tools and weapons, the promise and peril of the digital age." tch communicators and all others are available as odcasts. >> >> television has changed since c-span began 41 years ago but our mission continues. to provide an unfiltered view

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