Latest / The President's Daily Brief / The PDB Situation Report | September 5th, 2026: Tanker Attacks Deepen the Crisis in the Strait of Hormuz & Could Washington Strike an AI Deal With Beijing?

Transcript

The PDB Situation Report | September 5th, 2026: Tanker Attacks Deepen the Crisis in the Strait of Hormuz & Could Washington Strike an AI Deal With Beijing? · The President's Daily Brief

• 0:07
  Welcome to the PDB Situation Report.
• 0:09
  I'm Mike Baker,
• 0:10
  your eyes and ears on the world stage.
• 0:13
  Alright.
• 0:13
  Let's get briefed.
• 0:14
  First up,
• 0:15
  attacks on oil tankers and dwindling traffic through
• 0:18
  the Strait of Hormuz pushed crude oil prices toward
• 0:21
  $100 a barrel.
• 0:23
  Uh oh,
• 0:24
  Daniel Turner,
• 0:25
  executive director of Power of the Future,
• 0:27
  joins us to discuss.
• 0:28
  Later in the show,
• 0:29
  America and China are racing,
• 0:31
  of course,
• 0:31
  to build more powerful artificial intelligence,
• 0:34
  but you ask yourself,
• 0:36
  should there be limits?
• 0:37
  Well,
• 0:37
  Brendan Steinhauser joins us on the case for
• 0:39
  negotiating an AI deal with Beijing.
• 0:42
  But first,
• 0:43
  today's Situation Report Spotlight.
• 0:45
  This week,
• 0:46
  2 super tankers carrying Saudi oil were
• 0:49
  attacked while leaving the Strait of Hormuz,
• 0:51
  killing
• 0:51
  2 sailors.
• 0:53
  Saudi Arabia blamed Iran.
• 0:55
  The US responded by striking 2 Iranian government tankers under its new
• 1:00
  tanker for tanker policy,
• 1:02
  while Tehran expanded its blacklist of vessels to 56.
• 1:07
  Shipping traffic remains severely reduced and Brent crude
• 1:10
  has now climbed above $97 a barrel.
• 1:13
  That's its highest level
• 1:14
  in 6 weeks.
• 1:16
  So,
• 1:16
  where are oil markets heading and
• 1:18
  how could this confrontation affect American consumers?
• 1:22
  Joining us now is Daniel Turner,
• 1:23
  executive director of Power of the Future.
• 1:25
  Daniel,
• 1:26
  thank you very much for being here on The Situation Report.
• 1:29
  Always great to be back with you.
• 1:30
  Thanks for having me on again.
• 1:32
  Daniel,
• 1:32
  thank you.
• 1:33
  We got a lot to cover.
• 1:34
  Uh,
• 1:34
  I guess the first thing is
• 1:38
  And this is,
• 1:38
  I know this is very hard to,
• 1:40
  to,
• 1:40
  it's,
• 1:40
  it's like predicting,
• 1:41
  right,
• 1:42
  how long is a piece of string,
• 1:43
  but
• 1:44
  based on the current situation,
• 1:47
  right,
• 1:47
  the,
• 1:47
  the renewal of kinetic action,
• 1:49
  um,
• 1:50
  you know,
• 1:50
  the,
• 1:50
  the comments from the White House that they're extending deployments,
• 1:53
  so they appear to be,
• 1:54
  you know,
• 1:55
  thinking,
• 1:55
  OK,
• 1:55
  this is gonna be going on for a while.
• 1:58
  Uh,
• 1:58
  where do you think
• 1:59
  the oil markets are heading?
• 2:03
  Um,
• 2:03
  I'm not thrilled with where they are right now,
• 2:05
  I'll tell you that.
• 2:06
  Last time I was on your program,
• 2:07
  it was a couple of weeks ago and,
• 2:09
  and oil was just I think above
• 2:12
  75,
• 2:13
  77,
• 2:14
  and I was bragging about how look,
• 2:15
  things have calmed down quite a bit.
• 2:17
  Clearly markets are stabilized and,
• 2:20
  and this is sustainable.
• 2:21
  Uh,
• 2:22
  last I looked at online,
• 2:23
  uh,
• 2:23
  oil was at 92% today,
• 2:25
  and that's not good.
• 2:26
  Um.
• 2:27
  So,
• 2:27
  you know,
• 2:28
  the president
• 2:29
  will,
• 2:29
  will,
• 2:30
  will paint his picture of where things are and what's happening there and
• 2:34
  how we're in control,
• 2:35
  but oil markets are
• 2:37
  not gonna believe it if they don't want to.
• 2:38
  And currently,
• 2:40
  they don't believe it.
• 2:41
  So,
• 2:41
  I,
• 2:41
  I think this is the sweet spot.
• 2:43
  It's a terrible sweet spot.
• 2:44
  $90 a barrel is expensive.
• 2:47
  Um,
• 2:47
  really,
• 2:48
  it's not that $300 that,
• 2:50
  that Wall Street was predicting,
• 2:52
  right?
• 2:52
  Uh,
• 2:52
  uh,
• 2:53
  um,
• 2:53
  JP Morgan and others were saying we're gonna hit $250 300 dollars a barrel.
• 2:58
  That's clearly not gonna happen.
• 2:59
  But we also shouldn't be content with $90 a barrel.
• 3:02
  Um,
• 3:03
  so,
• 3:04
  I think here,
• 3:04
  here's where we are,
• 3:05
  but it's not good.
• 3:08
  Yeah,
• 3:08
  so stepping back just for a second,
• 3:10
  can you remind our viewers that
• 3:11
  in,
• 3:11
  in,
• 3:12
  in times when there's no conflict,
• 3:14
  right,
• 3:14
  just in sort of,
• 3:15
  yeah,
• 3:15
  I was gonna say in normal times,
• 3:16
  I don't know if we,
• 3:17
  we ever have normal times,
• 3:19
  but you know what I mean.
• 3:20
  What,
• 3:20
  what,
• 3:21
  what do you consider the actual sweet spot for pricing?
• 3:25
  Well,
• 3:26
  if we go to January of this year,
• 3:27
  it was probably a little lower than it should be.
• 3:29
  It was $57 a barrel.
• 3:31
  If you're in the industry,
• 3:32
  you want it around $75
• 3:35
  cause you are making enough of a profit
• 3:37
  that it is worthwhile.
• 3:39
  Uh,
• 3:39
  you can reinvest,
• 3:40
  you can hire,
• 3:40
  you can expand.
• 3:42
  $75 is a lot of money for a barrel of oil.
• 3:44
  I would say it should be around $65.
• 3:47
  But that's kind of the the price range and it fluctuates,
• 3:49
  right?
• 3:50
  It's 68,
• 3:50
  it's 62,
• 3:51
  it's 74,
• 3:53
  um,
• 3:53
  but 90 is a lot.
• 3:55
  90 is the preferred price point
• 3:57
  for the Middle East.
• 3:59
  Uh,
• 3:59
  that's how they build their
• 4:01
  indoor ski resorts and the world's largest,
• 4:04
  you know,
• 4:04
  building and the world's tallest wall,
• 4:07
  that's all.
• 4:08
  On 90 to $100 a barrel of oil,
• 4:10
  um,
• 4:10
  they also use slave labor,
• 4:12
  right?
• 4:12
  They don't have OSHA.
• 4:13
  They don't have labor unions,
• 4:15
  you know,
• 4:16
  so when you pay Filipinos $6 a day,
• 4:19
  you can make a lot of money in the oil business,
• 4:21
  um,
• 4:21
  but $90 is how they sustain their,
• 4:23
  their economies.
• 4:25
  We can do fine on
• 4:26
  70,
• 4:27
  and that's kind of what we should be aiming for.
• 4:30
  OK,
• 4:30
  when it,
• 4:31
  at what point when it
• 4:33
  drops
• 4:34
  does it become,
• 4:35
  and,
• 4:35
  and again I know that this is parameters here,
• 4:37
  it's not just age,
• 4:39
  but
• 4:39
  when does it become,
• 4:41
  uh,
• 4:41
  sort of,
• 4:42
  uh,
• 4:42
  unattractive,
• 4:43
  untenable for,
• 4:44
  uh,
• 4:45
  the industry in terms of new exploration,
• 4:49
  new production facilities,
• 4:50
  all of that.
• 4:51
  I think the consensus would say $60 a barrel,
• 4:54
  they clearly like it a little higher than that,
• 4:56
  but it's $60 at $59 a barrel,
• 4:58
  you're now you're just losing money,
• 4:59
  right?
• 4:59
  The amount of
• 5:00
  tens of millions you've had to invest
• 5:02
  in acquiring the land,
• 5:04
  in,
• 5:04
  in,
• 5:05
  in drilling,
• 5:06
  right?
• 5:06
  In your first couple of drills.
• 5:07
  May have been unsuccessful.
• 5:08
  You may have been drilling for a year and a half years
• 5:11
  until you found the right spot.
• 5:12
  And a year and a half at
• 5:13
  tens of thousands of dollars a day
• 5:15
  is expensive.
• 5:16
  And by the time you pay all your licensing and your insurance and your employees,
• 5:20
  you're in the hole 40 to $50 million per well.
• 5:24
  So,
• 5:25
  at,
• 5:25
  at,
• 5:25
  you know,
• 5:25
  $55 a barrel,
• 5:28
  it's not worth it.
• 5:29
  Now what that means is you're recovering your costs,
• 5:31
  but you're not gonna open up another well.
• 5:33
  At $65 you are gonna open up another well.
• 5:35
  And,
• 5:35
  and it's the difference between us and the Saudis.
• 5:37
  They would rather have $90 a barrel.
• 5:40
  Uh,
• 5:40
  we would rather have
• 5:41
  two wells at $63 a barrel.
• 5:44
  Uh,
• 5:45
  we're technically making more money,
• 5:47
  right,
• 5:47
  because we have twice the amount of volume,
• 5:49
  but the,
• 5:50
  the Middle East doesn't care about volume.
• 5:51
  They care about price point,
• 5:52
  and that's a huge difference
• 5:54
  between our system and theirs.
• 5:57
  It's,
• 5:57
  it's really interesting.
• 5:58
  I,
• 5:58
  and,
• 5:59
  uh,
• 5:59
  then I wanna get back to Iran,
• 6:00
  but I,
• 6:00
  I,
• 6:01
  I,
• 6:01
  this conversation I love because
• 6:03
  And then you think about the consumer,
• 6:04
  right,
• 6:04
  the average American consumer.
• 6:06
  What,
• 6:06
  what they really care about is the price at the pump,
• 6:08
  right?
• 6:09
  But
• 6:10
  there's gotta be a point where,
• 6:11
  so they,
• 6:11
  you know,
• 6:12
  they logic would say for a lot of people they go,
• 6:14
  Well,
• 6:14
  let that price per barrel drop to 40 or 30,
• 6:17
  you know,
• 6:17
  let's get that price of gasoline down to,
• 6:20
  you know,
• 6:20
  1 buck 50 a gallon,
• 6:22
  uh,
• 6:22
  but that's not how it works,
• 6:23
  right?
• 6:24
  Yeah,
• 6:25
  it's not at all.
• 6:26
  And,
• 6:26
  and the price of the pump,
• 6:27
  even that
• 6:28
  is,
• 6:29
  you know,
• 6:29
  you need a little bit of context.
• 6:30
  We are accustomed to cheap energy
• 6:33
  and that's good.
• 6:34
  We
• 6:34
  energy should be inexpensive in America
• 6:36
  cause we have an abundance of it.
• 6:38
  But,
• 6:38
  but if you just have a little bit of perspective,
• 6:40
  and of course I can't tell anyone to not feel the pinch,
• 6:43
  right?
• 6:43
  But,
• 6:43
  but I do see people with no problem buying an $8
• 6:47
  you know,
• 6:48
  frappe mocha white chocolate grande with extra whip.
• 6:52
  And you're complaining about $8 a gallon,
• 6:55
  you know,
• 6:55
  your,
• 6:56
  your gas at $4 a gallon,
• 6:58
  gallon,
• 6:58
  right,
• 6:59
  not a little tiny thing,
• 7:00
  $4 a gallon,
• 7:01
  and that comes from,
• 7:02
  you know,
• 7:03
  3 miles underground somewhere in Texas
• 7:06
  and went through seven stages of refinery
• 7:09
  and you bought it down the road
• 7:11
  for $4 a gallon.
• 7:12
  You know,
• 7:12
  you buy a bottle of water for 275 water,
• 7:15
  right?
• 7:16
  So,
• 7:16
  so gas,
• 7:17
  I mean,
• 7:18
  that's the marvel of just gasoline,
• 7:20
  what you put in your car
• 7:22
  that it is as cheap as it is.
• 7:23
  Now,
• 7:23
  it should be cheaper,
• 7:25
  but also sometimes we lose a little bit of a context of what
• 7:28
  expensive should be and
• 7:30
  it's remarkable it's as cheap as it is.
• 7:32
  Yeah.
• 7:33
  But that,
• 7:33
  and I would assume also that all the,
• 7:35
  all the players in that,
• 7:36
  in,
• 7:36
  in that process,
• 7:37
  right?
• 7:38
  Right down to the retailers,
• 7:39
  the,
• 7:39
  the,
• 7:39
  you know,
• 7:40
  when you're standing there at the pump.
• 7:42
  You know,
• 7:42
  it,
• 7:42
  it,
• 7:43
  it can only go so far,
• 7:44
  right?
• 7:44
  I mean,
• 7:44
  if the prices drop,
• 7:46
  it doesn't hurt just,
• 7:48
  it doesn't just hurt the,
• 7:49
  the workers in,
• 7:49
  in the oil and gas industry,
• 7:51
  right?
• 7:52
  It's,
• 7:52
  it's impacting
• 7:53
  everybody and a lot of knock-on businesses that depend on that industry.
• 7:57
  So it,
• 7:57
  it is fascinating,
• 7:58
  but,
• 7:59
  uh,
• 7:59
  I take your point.
• 7:59
  I think Vladimir Putin,
• 8:01
  uh,
• 8:02
  would also love
• 8:03
  oil to stay around 90,000 to 95
• 8:05
  $100 a month.
• 8:06
  And,
• 8:07
  and,
• 8:07
  you know,
• 8:07
  he has,
• 8:08
  I know you want to talk about Iran,
• 8:09
  but just to jump.
• 8:10
  Quick to Russia.
• 8:11
  This was one of the president's probably his
• 8:13
  strongest talking points during the 2024 election,
• 8:16
  that,
• 8:16
  that we had this global embargo of Russian oil and gas,
• 8:19
  but the Europeans just ignored it.
• 8:21
  They just bought it through third party intermediaries.
• 8:24
  So they bought it from the South Koreans,
• 8:25
  they bought it from India,
• 8:26
  they bought it from Turkey,
• 8:28
  which is supposed to be an ally of a NATO member,
• 8:30
  right?
• 8:31
  Um,
• 8:31
  they never sold any less oil or gas.
• 8:34
  Europe never purchased
• 8:35
  any less Russian oil and gas,
• 8:37
  and President Trump.
• 8:38
  Hit Kamala Harris on this issue saying
• 8:40
  that your NATO friends have given more to Putin
• 8:43
  buying his oil and gas than they've given to Ukraine
• 8:46
  fighting off the war against Putin.
• 8:48
  So,
• 8:49
  so you're absolutely right.
• 8:49
  This,
• 8:50
  this high price point funds
• 8:52
  Putin's army and you're not going to have a peace negotiation
• 8:56
  until you have sustained
• 8:58
  $55.60 dollars a barrel for,
• 9:00
  for months.
• 9:01
  And then he's genuinely bankrupt,
• 9:03
  and then he'll come to the negotiating table.
• 9:05
  It's what Reagan did.
• 9:07
  Yeah.
• 9:08
  Yeah,
• 9:08
  I,
• 9:08
  I,
• 9:08
  I think it's a great point.
• 9:10
  I want to pivot a little bit to,
• 9:12
  again back to Iran,
• 9:13
  but also
• 9:14
  in context with
• 9:15
  China.
• 9:16
  What are you hearing about,
• 9:17
  because again,
• 9:17
  this,
• 9:17
  this idea of economic D-Day,
• 9:19
  we're gonna,
• 9:19
  we're gonna squeeze the Iranian regime,
• 9:21
  right?
• 9:22
  And,
• 9:22
  and,
• 9:22
  and shut off their,
• 9:24
  their
• 9:24
  revenue streams which primarily,
• 9:26
  you know,
• 9:26
  obviously oil.
• 9:27
  Uh,
• 9:28
  what do you hear
• 9:29
  in terms of
• 9:30
  China's
• 9:32
  Current
• 9:33
  purchasing of Iranian oil because
• 9:36
  you know obviously they've been
• 9:38
  essentially getting drunk on on discounted Iranian oil for some time I believe
• 9:42
  but
• 9:43
  have you heard anything that indicates
• 9:45
  uh that they're having trouble because of the Iranian blockade
• 9:49
  uh of ports?
• 9:49
  Are they having trouble
• 9:51
  purchasing?
• 9:51
  Are they,
• 9:52
  are they still buy
• 9:53
  where do we stand with that?
• 9:55
  I know,
• 9:55
  I don't think they're having a problem purchasing it.
• 9:57
  They're not getting the sweet price point that they were getting for the last,
• 10:00
  you know,
• 10:01
  30 years between Iran and,
• 10:03
  and Venezuela as well.
• 10:04
  They've lost two of their biggest reliable supplies of,
• 10:08
  of imported oil and
• 10:10
  You know this,
• 10:10
  I'm sure your audience does as well.
• 10:12
  China doesn't have a domestic oil production capability.
• 10:15
  They don't have any,
• 10:16
  uh,
• 10:16
  uh,
• 10:16
  you know,
• 10:16
  I'm sure they're looking everywhere,
• 10:18
  but as of now they have to import almost 100%
• 10:22
  of their oil.
• 10:22
  It's probably their biggest vulnerability.
• 10:24
  And so people can say,
• 10:25
  well,
• 10:26
  you know,
• 10:26
  but they're investing in wind and solar.
• 10:28
  They're not,
• 10:28
  first of all,
• 10:29
  but even if they are,
• 10:30
  the wind and solar is made from oil
• 10:32
  and all of the things that they make that fund their economy,
• 10:35
  all the crap that we buy on,
• 10:37
  on,
• 10:37
  on Amazon and that's in our shopping cart.
• 10:39
  on every,
• 10:40
  you know,
• 10:40
  every single spouse's social media page that's all made in China
• 10:44
  is all made from oil.
• 10:45
  Their factories run on oil and gas and coal.
• 10:48
  The economy does.
• 10:49
  And so,
• 10:50
  and you know
• 10:52
  that the Chinese economy is a little bit predicated on myth as well.
• 10:55
  This idea that it's this robust,
• 10:57
  you know,
• 10:58
  like thriving.
• 10:58
  It's really not.
• 10:59
  It's very vulnerable.
• 11:01
  And these,
• 11:02
  these crunches of energy
• 11:04
  prices
• 11:05
  are,
• 11:05
  are gonna really take their toll and that's a good thing.
• 11:07
  A weak China is good.
• 11:10
  How,
• 11:11
  how important is coal to their,
• 11:12
  uh,
• 11:13
  energy?
• 11:14
  It's a huge system.
• 11:16
  Hugely important.
• 11:16
  It's almost,
• 11:17
  uh,
• 11:17
  I,
• 11:17
  I think it's almost 70% of their electricity production.
• 11:21
  Their factories run on coal.
• 11:23
  Um,
• 11:23
  we pay 17 cents per kilowatt hour for electricity in America.
• 11:28
  That's high.
• 11:29
  We were paying around 12 cents for
• 11:31
  a decade.
• 11:32
  So that's that 40,
• 11:33
  50% increase that we've seen in electricity prices.
• 11:36
  China pays 4%.
• 11:37
  And the reason why they pay for it is because
• 11:40
  they,
• 11:40
  one,
• 11:40
  they take their grid very seriously,
• 11:42
  and they have a tremendous amount of,
• 11:45
  of coal reserves.
• 11:46
  They also buy a ton of coal
• 11:47
  from Australia,
• 11:49
  um,
• 11:49
  and they run their entire grid on,
• 11:51
  on electricity.
• 11:52
  We could run our entire grid,
• 11:54
  I'm sorry,
• 11:54
  on coal,
• 11:55
  we could run our entire electric grid on coal,
• 11:57
  um,
• 11:58
  but this is where the climate movement has done amazing.
• 12:01
  Inroads
• 12:02
  to to make coal the villain
• 12:04
  and we've foregone a lot of our coal and now we pay for electricity through the nose.
• 12:09
  Yeah,
• 12:09
  it's sort of that myth also of like
• 12:12
  you know
• 12:13
  the world.
• 12:14
  You know,
• 12:14
  turning away and,
• 12:15
  and,
• 12:15
  and finding alternative sources of energy.
• 12:18
  I had read at one point
• 12:19
  a staggering statistic which I'm having a hard time recalling,
• 12:22
  but the number of coal plants
• 12:24
  that China produces or builds
• 12:27
  on an annual basis,
• 12:28
  and it was,
• 12:28
  it was staggering.
• 12:30
  And meanwhile,
• 12:31
  you know,
• 12:32
  the,
• 12:32
  we're getting pilloried
• 12:33
  for,
• 12:34
  you know,
• 12:34
  our
• 12:35
  energy.
• 12:36
  Use
• 12:36
  and you've got China,
• 12:37
  India in particular also
• 12:39
  uh out there.
• 12:41
  So
• 12:41
  I don't know where I'm going with that,
• 12:43
  Daniel.
• 12:43
  You got me disappearing down.
• 12:44
  No,
• 12:44
  it's all
• 12:45
  there are great things and worldwide coal consumption continues
• 12:48
  to go up as does oil and gas consumption.
• 12:50
  There's been no dip in oil,
• 12:52
  gas,
• 12:52
  or coal.
• 12:53
  Ever.
• 12:53
  They just constantly are on the rise.
• 12:55
  And so people say,
• 12:56
  well,
• 12:56
  we're gonna get rid of coal.
• 12:58
  Well,
• 12:58
  no,
• 12:58
  we're just gonna use it differently.
• 12:59
  So rather than burn coal to make electricity,
• 13:02
  because that's bad in America,
• 13:04
  the Chinese are gonna burn coal to make crappy solar panels
• 13:07
  that you can make expensive electricity 15% of the time.
• 13:11
  Right,
• 13:11
  that's all we're doing.
• 13:12
  We're still burning coal.
• 13:13
  We're just burning it differently,
• 13:14
  right?
• 13:15
  The coal pie
• 13:16
  has gotten bigger and bigger and bigger.
• 13:18
  Just America's slice has gotten really small,
• 13:20
  right?
• 13:20
  We've allowed other countries
• 13:22
  to produce it.
• 13:22
  We used to be the 2nd largest coal producer in the world.
• 13:25
  We're now like 6th or 7th.
• 13:26
  Why?
• 13:27
  Because we,
• 13:28
  we've punished ourselves.
• 13:29
  Coal is still on the rise.
• 13:31
  We just decide we're not gonna
• 13:33
  profit from it.
• 13:34
  Why?
• 13:34
  Like who,
• 13:34
  who,
• 13:35
  who's benefiting from this?
• 13:36
  Maybe
• 13:38
  this is where Power of the Future was born.
• 13:39
  Maybe those people who were invested in overseas coal,
• 13:42
  where again you use 9 year old girls to mine coal in Malaysia,
• 13:46
  very lucrative as opposed to a bunch of guys in West Virginia who wanna make 160,000
• 13:51
  and have healthcare benefits,
• 13:52
  right?
• 13:53
  So maybe that's the reason why we're not using coal in America,
• 13:56
  but
• 13:57
  Tin foil hat,
• 13:58
  you know.
• 14:00
  We'll be,
• 14:00
  we'll be right back with
• 14:02
  more of Daniel's tinfoil hat.
• 14:04
  Uh,
• 14:05
  Daniel,
• 14:05
  if you,
• 14:06
  if you'll stick around,
• 14:06
  man,
• 14:07
  we're gonna come back and,
• 14:07
  and I,
• 14:08
  I got a bunch of questions about Iran and Venezuela
• 14:11
  that I wanna throw your way.
• 14:12
  Stick,
• 14:12
  uh,
• 14:12
  stick around here on the Situation Report.
• 14:14
  We'll be right back.
• 14:16
  Hey,
• 14:16
  Mike Baker here.
• 14:17
  Now,
• 14:17
  we have all heard those radio ads about the IRS,
• 14:20
  you know what I'm talking about.
• 14:21
  They,
• 14:22
  they tell you to be afraid,
• 14:23
  oh,
• 14:23
  be afraid,
• 14:23
  and then they try to frighten you into calling.
• 14:25
  Well,
• 14:26
  tax relief advocates is different.
• 14:29
  Look,
• 14:29
  if you owe money to the IRS,
• 14:30
  whether it's 5000 or $50,000 or $500,000
• 14:34
  hopefully it's not that,
• 14:35
  TRA has a solution.
• 14:36
  to your tax problem.
• 14:38
  Look,
• 14:38
  don't lose hope.
• 14:39
  TRA could reduce or even eliminate what you owe to the IRS.
• 14:43
  Their passion is taxes and helping individuals
• 14:45
  and businesses fix their IRS problems.
• 14:48
  They've got over 1000 5-star Google reviews and
• 14:51
  an A+ with the Better Business Bureau.
• 14:53
  Here's the thing,
• 14:54
  you do not need to be afraid of the IRS any longer.
• 14:57
  Generous tax relief programs are now available
• 14:59
  that can give you a fresh start.
• 15:00
  So don't wait.
• 15:01
  Simply visit TRA.com.
• 15:04
  That's
• 15:04
  TRA.com or call the number 800-583-6515.
• 15:10
  Once again,
• 15:10
  that number
• 15:11
  800-583-6515.
• 15:14
  Tax relief advocates,
• 15:15
  real solutions
• 15:16
  for real people.
• 15:19
  Welcome back to the PDB Situation Report.
• 15:21
  Joining me once again is Daniel Turner.
• 15:23
  He's the executive director of Power of the Future.
• 15:26
  Daniel,
• 15:27
  thank you very much for sticking around.
• 15:29
  Uh,
• 15:29
  let me ask you this about,
• 15:30
  about Iran.
• 15:31
  Uh,
• 15:32
  a lot of talk about
• 15:34
  is the Strait of Hormuz open?
• 15:35
  Is it not?
• 15:37
  Uh,
• 15:37
  I mean,
• 15:37
  I think it's,
• 15:38
  it's clear at this point that
• 15:39
  more traffic is moving,
• 15:42
  uh,
• 15:43
  but there's a lot of differing opinions as to how much.
• 15:47
  What are you hearing?
• 15:48
  Uh,
• 15:49
  the administration is claiming some,
• 15:50
  some 15 million barrels.
• 15:52
  Um,
• 15:53
  uh,
• 15:53
  uh,
• 15:53
  I think they said we're at about 95% of pre.
• 15:57
  At engagement,
• 15:58
  uh,
• 15:58
  traffic levels,
• 15:59
  which would be great.
• 16:00
  Clearly something is getting through,
• 16:02
  and I think I made this point last time I was on with you
• 16:05
  that,
• 16:05
  that the fact that we didn't hit 250 to $300 a barrel on oil,
• 16:09
  markets knew something was getting through clandestinely for a while,
• 16:13
  now very openly,
• 16:14
  but markets are still a little skittish,
• 16:16
  right?
• 16:16
  I'm sure anytime,
• 16:17
  you know,
• 16:18
  something happens
• 16:19
  that,
• 16:19
  that every ship captain can see.
• 16:21
  They call their bosses,
• 16:23
  word trickles up and within seconds,
• 16:25
  prices start to go through the roof.
• 16:27
  That's how quick markets move.
• 16:28
  Uh,
• 16:29
  you know,
• 16:29
  that's,
• 16:29
  that's understandable.
• 16:30
  Until you're piloting your boat and you don't even
• 16:33
  have to think about the fact where you are
• 16:35
  other than navigating waterways,
• 16:38
  right?
• 16:39
  Prices are not gonna be lowered,
• 16:41
  right?
• 16:41
  And right now there's still that nervous like,
• 16:43
  hey,
• 16:43
  Mike,
• 16:44
  you go.
• 16:44
  No,
• 16:44
  Daniel,
• 16:45
  you go.
• 16:45
  Hey,
• 16:45
  who wants to go first,
• 16:46
  right?
• 16:47
  Like,
• 16:47
  oh boy.
• 16:48
  That's,
• 16:49
  that's where we are right now.
• 16:51
  Well,
• 16:52
  they hit a couple of Saudi tankers
• 16:54
  that created this latest exchange of missiles and
• 16:57
  drones that appears to be still ongoing,
• 16:59
  frankly.
• 17:01
  Is that correct?
• 17:03
  Did I hear you say that according to the White House
• 17:05
  they're at 95% of pre-conflict volume?
• 17:09
  I believe that was the number I heard,
• 17:10
  90,
• 17:11
  95%.
• 17:12
  I think they said something,
• 17:13
  you know,
• 17:13
  the number was 200 vessels a day and they were at like 185 or something per day.
• 17:19
  I could have those numbers wrong,
• 17:20
  but the White House numbers I heard
• 17:22
  were,
• 17:23
  were,
• 17:23
  were superlative.
• 17:25
  Again,
• 17:25
  trying to bring that stabilizing
• 17:27
  moment like the,
• 17:28
  the straits are secure.
• 17:30
  You are safe in this area.
• 17:32
  Uh,
• 17:32
  um,
• 17:32
  last time I was on with you,
• 17:33
  we talked about countries rerouting their,
• 17:35
  their lines to avoid the straits.
• 17:37
  I think that.
• 17:38
  That's the future as well.
• 17:39
  I think if you're the Saudis,
• 17:41
  they don't get along with Iran.
• 17:42
  They never have,
• 17:44
  right?
• 17:44
  Like why would we ever in the future just think
• 17:46
  this is gonna be resolved once and for all.
• 17:48
  So they're going to the west,
• 17:50
  the west side of their country,
• 17:51
  the west coast into the Red Sea,
• 17:53
  and they're gonna use that,
• 17:54
  you know,
• 17:54
  they,
• 17:55
  they do control that area.
• 17:56
  It is a lot safer.
• 17:57
  They're not worried about the Egyptians.
• 17:59
  Um,
• 18:00
  the,
• 18:00
  the Straits of,
• 18:01
  they do have the Houthis to worry about.
• 18:03
  They do have they do
• 18:04
  without a doubt,
• 18:05
  but,
• 18:05
  but you know,
• 18:05
  hopefully they can put that.
• 18:07
  Yeah,
• 18:07
  absolutely.
• 18:08
  That is a concern.
• 18:09
  I guess my point is if Iran loses the leverage of the straits,
• 18:13
  what does Iran have left?
• 18:14
  Right,
• 18:15
  the Iraqis are starting to build a pipeline north.
• 18:18
  Uh,
• 18:18
  the Kuwaitis are moving north as well.
• 18:21
  Um,
• 18:22
  if the straits no longer is this choke point.
• 18:25
  Then what does Iran have and and and that's that's probably where we're headed.
• 18:31
  Yeah,
• 18:31
  I think that's a,
• 18:32
  that's a really good point because at some point you've got to say,
• 18:34
  OK,
• 18:35
  how does this wrap up,
• 18:36
  right?
• 18:37
  And,
• 18:37
  and again,
• 18:38
  you know,
• 18:39
  the White House,
• 18:39
  the Pentagon are,
• 18:40
  are,
• 18:41
  you know,
• 18:41
  extending deployments,
• 18:43
  uh,
• 18:43
  so it does look like their mindset is,
• 18:45
  well,
• 18:45
  this could go into 2027,
• 18:48
  but at some point it's gotta,
• 18:49
  it's gotta come to a conclusion.
• 18:51
  And
• 18:51
  you know
• 18:52
  at 30,000 ft you've got two options.
• 18:55
  Either the regime is gone
• 18:57
  and you've got a brand new day somehow in Iran,
• 18:59
  or the regime exists still
• 19:01
  and you've just
• 19:02
  somehow come with an agreement,
• 19:04
  negotiated agreement.
• 19:06
  And
• 19:07
  if at the end of the day the regime still exists,
• 19:10
  but as a result of all of this
• 19:12
  they've lost the leverage that they had in the Strait of Hormuz
• 19:16
  and
• 19:16
  all the regional
• 19:18
  partners and players there
• 19:19
  have
• 19:20
  made that decision and are acting on it
• 19:23
  to have other means of routing,
• 19:26
  that's actually a pretty good win.
• 19:29
  We're still going to have to deal with the Iranian regime down the road,
• 19:32
  but they have lost this incredibly important piece of leverage.
• 19:36
  They have,
• 19:36
  yeah,
• 19:36
  and,
• 19:37
  and I think,
• 19:38
  I think maybe not underestimating but something
• 19:41
  that needed a little bit more context,
• 19:43
  a little bit more fleshing out.
• 19:45
  Iran's been planning for this forever,
• 19:47
  right?
• 19:47
  Like this was,
• 19:47
  this was war game,
• 19:49
  this was scenarioed.
• 19:50
  They knew eventually this was going to happen.
• 19:52
  They didn't know when,
• 19:53
  um.
• 19:55
  They're prepared for this.
• 19:56
  Now,
• 19:56
  how,
• 19:57
  how much they can dig in their heels,
• 19:59
  I don't know.
• 20:00
  But I,
• 20:00
  I think it was a little
• 20:02
  precipitous to,
• 20:03
  to,
• 20:03
  to assume like once we sink their navy,
• 20:05
  they'll be done.
• 20:06
  Once we,
• 20:07
  you know,
• 20:08
  take out their air force
• 20:09
  or their drone capabilities,
• 20:10
  they'll be done.
• 20:11
  Iran's been playing for this for a long time.
• 20:13
  And if you have Death wish and you have this
• 20:15
  belief that you know your your death will usher in
• 20:18
  you you know this this wonderful caliphate
• 20:20
  you're actually giddy about this moment you know
• 20:22
  if someone told me Jesus was around the
• 20:25
  actually no I don't,
• 20:25
  I'm not ready for the second coming.
• 20:26
  I got a lot of repenting to do before he walks in the door.
• 20:29
  But there are some people who are very I got some yard work,
• 20:32
  yeah,
• 20:34
  yeah,
• 20:35
  yeah,
• 20:35
  no,
• 20:35
  I mean,
• 20:35
  I think I look,
• 20:36
  I,
• 20:36
  I,
• 20:36
  I,
• 20:37
  I would argue that we
• 20:39
  In part,
• 20:42
  you know,
• 20:42
  went into this without really understanding,
• 20:45
  which is bizarre because we've been dealing in the region,
• 20:47
  but we never do seem to learn
• 20:49
  without understanding the nature of this
• 20:52
  conflict and of the Islamic Republic
• 20:55
  and of fundamentalists and hardliners in the Islamic Republic,
• 20:59
  uh,
• 20:59
  and so,
• 21:00
  you know,
• 21:00
  and I think we were a little drunk on the Venezuela experience.
• 21:04
  Look at that,
• 21:04
  Daniel,
• 21:05
  I just made a segue.
• 21:06
  I just see how I did that.
• 21:08
  I just,
• 21:09
  I look at that.
• 21:09
  That's
• 21:10
  all right,
• 21:11
  uh,
• 21:11
  since you,
• 21:12
  since you brought up Venezuela.
• 21:14
  Uh,
• 21:15
  tell me what you,
• 21:15
  uh,
• 21:15
  what you think about the,
• 21:16
  the latest comments over
• 21:18
  the
• 21:20
  constructive deal
• 21:22
  that the White House has been talking about with,
• 21:24
  uh,
• 21:24
  Venezuela for oil.
• 21:26
  First thing I thought of was when,
• 21:27
  when
• 21:28
  Governor Burgum at the time was going
• 21:30
  through his confirmation to become Interior Secretary.
• 21:33
  I was actually at his confirmation hearing in DC,
• 21:36
  uh,
• 21:36
  cause I'm a big fan and I,
• 21:37
  this is a very important agency,
• 21:38
  especially for what I do.
• 21:40
  And As the business mogul that he is,
• 21:42
  he brought in this concept of America's balance sheet,
• 21:45
  and he kept saying,
• 21:46
  we talk about our huge debt,
• 21:47
  and we do have a huge debt.
• 21:48
  At the time it was 36 trillion,
• 21:50
  it's up
• 21:51
  quite a bit from there.
• 21:52
  Um,
• 21:52
  we talk about our debt,
• 21:53
  but we never talk about our assets.
• 21:54
  And he said,
• 21:55
  if you ever run a business,
• 21:56
  you know that your debt is just one
• 21:59
  aspect of your entire balance sheet.
• 22:01
  Um,
• 22:01
  you know,
• 22:01
  if you go back and you look at like there's an old,
• 22:03
  um,
• 22:04
  Jay Leno is interviewing Jeff Bezos.
• 22:06
  I think it was early.
• 22:07
  2000s
• 22:08
  and he's confused.
• 22:09
  He's like,
• 22:09
  you're a billionaire,
• 22:10
  but your company on paper is,
• 22:11
  is,
• 22:12
  is worthless,
• 22:13
  always losing money and,
• 22:14
  and Bezos was kind of joking about how,
• 22:17
  you know,
• 22:17
  what debt means in terms of the business.
• 22:19
  That's a long way to say what I like about this deal
• 22:23
  is we've just added some $6 trillion to America's balance sheet.
• 22:27
  Um,
• 22:27
  it's in oil and gas reserves,
• 22:29
  the 65 billion barrels that now
• 22:31
  we have claimed ownership to.
• 22:33
  It's a pretext for protecting it.
• 22:35
  I'm not saying I wanna go to war with Venezuela,
• 22:38
  but people are saying,
• 22:38
  are we setting up an illegitimate regime?
• 22:40
  Are we making a deal with the devil?
• 22:43
  Uh,
• 22:43
  uh,
• 22:43
  you know,
• 22:43
  you can make a deal with the devil if the devil's,
• 22:45
  you know,
• 22:46
  if he tries to take your 65 billion barrels of oil.
• 22:49
  So what I like about the fact is now
• 22:51
  our debt is still bad,
• 22:53
  don't get me wrong,
• 22:53
  and boy do we spend too much.
• 22:55
  But we have a new asset now that is quite offsetting.
• 22:59
  That,
• 22:59
  that is really exciting about the future
• 23:02
  of American energy and American capabilities.
• 23:05
  And we will fight
• 23:07
  tooth and nail for that asset
• 23:08
  if another Maduro pops his head up and says,
• 23:11
  you know,
• 23:11
  death to America.
• 23:14
  Yeah,
• 23:15
  can you give us a
• 23:17
  give us a summary of the mechanics of this deal as as as you understand it.
• 23:22
  Well,
• 23:23
  the 65 billion barrel,
• 23:24
  I think it's half of,
• 23:25
  of,
• 23:25
  or a percentage of their,
• 23:27
  their petroleum reserves.
• 23:28
  I think it's probably a smaller percentage.
• 23:30
  I think they have 300
• 23:31
  billion barrels from last,
• 23:33
  if my memory serves me right.
• 23:34
  So we got a big chunk of that is now
• 23:37
  given as an American asset.
• 23:38
  That's not gonna all come to market,
• 23:40
  you know,
• 23:41
  immediately.
• 23:42
  But that is
• 23:43
  Centuries of,
• 23:43
  of reserves.
• 23:44
  And now what this means is he'll
• 23:46
  tell American industry,
• 23:48
  hey,
• 23:48
  this is our asset
• 23:50
  and you are free to bring it to market.
• 23:52
  Uh,
• 23:52
  this will be the free market at work.
• 23:54
  If you're in the exploration business,
• 23:55
  if you're in the drilling business,
• 23:57
  if you're in,
• 23:58
  uh,
• 23:58
  uh,
• 23:58
  uh,
• 23:58
  um,
• 23:58
  um,
• 23:59
  you know,
• 24:00
  middle
• 24:01
  business of,
• 24:02
  of,
• 24:02
  of midstream.
• 24:03
  You want to be part of that 65 billion barrel asset.
• 24:07
  So,
• 24:08
  you'll get American companies that are gonna move
• 24:10
  down there.
• 24:10
  5 already have.
• 24:12
  There are 5 companies since the announcement
• 24:14
  a couple of months ago when we took out Maduro.
• 24:17
  5 companies have moved in and have started operations.
• 24:20
  I think they said our oil
• 24:21
  production is up,
• 24:23
  um,
• 24:23
  some 20% month on month,
• 24:26
  and their exports to America have increased by 50%.
• 24:29
  That's huge.
• 24:31
  Well,
• 24:31
  when you,
• 24:31
  when you say that,
• 24:32
  when you say those five companies have moved in,
• 24:35
  uh,
• 24:35
  are they in the business of refurbishing and,
• 24:38
  and,
• 24:38
  uh,
• 24:38
  rebuilding
• 24:39
  the Venezuelan
• 24:41
  structure,
• 24:42
  or are they
• 24:43
  setting off on brand new ventures on behalf of American companies?
• 24:47
  Uh,
• 24:48
  uh,
• 24:48
  first one's probably refurbishing and retrofitting,
• 24:51
  um,
• 24:51
  and there are companies that specialize in this.
• 24:53
  They,
• 24:53
  they buy old wells,
• 24:55
  um,
• 24:55
  and retrofit them to,
• 24:56
  to bring them back.
• 24:57
  They're pressurizing fracking,
• 24:59
  etc.
• 24:59
  and I'm sure they're expanding,
• 25:00
  right?
• 25:01
  This is a really big patch.
• 25:02
  I,
• 25:02
  I,
• 25:03
  I don't know if there's new drilling happening,
• 25:04
  but I assume there's new exploration happening again
• 25:07
  at $90 a barrel,
• 25:09
  you are giddy to start.
• 25:10
  Start exploring as soon as possible.
• 25:12
  They also have a lot of talent in,
• 25:14
  in,
• 25:14
  in Venezuela.
• 25:15
  They've been in this business for a long time.
• 25:17
  If Maduro didn't kill all of them,
• 25:19
  there gotta be some guys there who still know what the hell they're doing
• 25:22
  and speak the language,
• 25:23
  and they're eager
• 25:25
  to get to work because it's their country,
• 25:27
  right?
• 25:27
  So,
• 25:28
  you know,
• 25:28
  this is no different than,
• 25:30
  than BP working in,
• 25:31
  in the Permian Basin.
• 25:33
  Or Exxon working in the North the North Sea,
• 25:36
  right?
• 25:36
  It's not American territory,
• 25:37
  but it's American companies,
• 25:39
  foreign company,
• 25:40
  American assets.
• 25:41
  This is just the global oil market at work.
• 25:44
  The fact that this is 65 billion
• 25:46
  American
• 25:47
  barrels though that are open for business,
• 25:49
  you will see companies move there and move there fast
• 25:52
  so long as it is
• 25:54
  safe and secure,
• 25:55
  and that's.
• 25:56
  That's a huge priority,
• 25:57
  right?
• 25:57
  I'm not gonna risk my guys to die.
• 25:59
  That's why people don't wanna work in Nigeria.
• 26:01
  Um,
• 26:02
  but I will send them to Venezuela gladly as
• 26:06
  American oil and gas guys have done for decades.
• 26:08
  I know lots of guys who lived in Venezuela.
• 26:10
  They loved it there
• 26:12
  and they were making a fortune too,
• 26:13
  yeah,
• 26:14
  before Chavez.
• 26:15
  No,
• 26:15
  I got a very close friend who spent years working in the,
• 26:18
  uh,
• 26:19
  Nigerian oil fields and
• 26:21
  talk about a rough and tumble place.
• 26:22
  So it is what they do.
• 26:24
  It's a good point to embrace the security of it,
• 26:26
  of it all,
• 26:27
  right,
• 26:27
  because
• 26:28
  that,
• 26:28
  at least initially right after Maduro was out and,
• 26:30
  and there was talk about where people are gonna go in.
• 26:33
  Uh,
• 26:33
  you know,
• 26:34
  the biggest issue was,
• 26:35
  OK,
• 26:35
  how secure is it,
• 26:36
  right?
• 26:36
  And
• 26:37
  you know,
• 26:38
  so I think that's an issue.
• 26:39
  Also,
• 26:40
  rule of law
• 26:41
  is an issue.
• 26:42
  Um,
• 26:43
  government stability,
• 26:44
  what,
• 26:44
  what,
• 26:45
  you know,
• 26:45
  what does that mean?
• 26:46
  Does that mean this is sort of a rubber stamp on
• 26:48
  Delci Rodriguez and rather than saying,
• 26:50
  OK,
• 26:50
  we're gonna have elections,
• 26:52
  um,
• 26:52
  so I think there's,
• 26:53
  there's some questions here that need to be
• 26:56
  looked at and I'd,
• 26:57
  I'd love to have you back
• 26:58
  to,
• 26:59
  to kind of dig into the mechanics of this
• 27:01
  arrangement because I agree with you,
• 27:02
  it's huge,
• 27:03
  it's a,
• 27:03
  it's a massive,
• 27:05
  um,
• 27:05
  upside.
• 27:06
  Uh,
• 27:07
  but I think we have to be a little bit careful because
• 27:10
  clearly there's some concern on the Venezuelan side over,
• 27:13
  you know,
• 27:13
  uh,
• 27:14
  sovereignty and,
• 27:15
  and national resources and what does all this mean.
• 27:18
  Uh,
• 27:19
  Daniel,
• 27:19
  I gotta tell you,
• 27:20
  the time flew.
• 27:22
  Uh,
• 27:22
  I know it dragged for you,
• 27:23
  uh,
• 27:24
  because of my questions,
• 27:24
  but,
• 27:25
  uh,
• 27:25
  for me it flew.
• 27:26
  So,
• 27:27
  no,
• 27:27
  listen,
• 27:27
  thank you very much,
• 27:28
  man.
• 27:28
  I always,
• 27:30
  yeah,
• 27:30
  I love,
• 27:30
  I love the conversation,
• 27:32
  um,
• 27:32
  and,
• 27:33
  and I hope next time we call you,
• 27:34
  man,
• 27:34
  you'll,
• 27:34
  you'll pick up the phone and come on back anytime.
• 27:36
  These are huge issues,
• 27:37
  and I'm just glad you give them the time they need.
• 27:39
  So thank you for sharing with your audience.
• 27:41
  Appreciate it.
• 27:42
  Of course,
• 27:42
  man.
• 27:43
  Thank you very much again.
• 27:44
  We'll see you soon.
• 27:45
  Daniel Turner,
• 27:45
  executive director of Power of the Future.
• 27:48
  Alright,
• 27:49
  coming up next,
• 27:50
  well,
• 27:50
  Trump and Xi prepare for a high stakes meeting.
• 27:53
  Have you heard about this?
• 27:54
  Yep,
• 27:54
  they're meeting
• 27:55
  in Washington as the US and China race for dominance in artificial intelligence.
• 28:00
  Brendan Steinhauser joins us on whether the US
• 28:02
  should pursue an AI arms control deal with China.
• 28:06
  Hm,
• 28:07
  stay right there.
• 28:08
  Hey,
• 28:08
  Mike Baker here.
• 28:09
  The President's Daily Brief is brought to you by Maude.
• 28:12
  Now,
• 28:12
  Maude prescribes a once or twice daily modafinil drink
• 28:16
  that can keep you energized,
• 28:17
  focused,
• 28:17
  and alert.
• 28:18
  That all sounds very good,
• 28:19
  doesn't it?
• 28:20
  Look,
• 28:20
  here's the deal.
• 28:21
  Caffeine energy drinks block what's called adenosine,
• 28:24
  right?
• 28:24
  It's the chemical that makes you feel tired.
• 28:27
  It builds up and
• 28:28
  when caffeine
• 28:28
  Wears off,
• 28:29
  well,
• 28:29
  there's your crash.
• 28:31
  Modafinil works differently.
• 28:32
  It engages pathways in your brain
• 28:34
  dopamine,
• 28:35
  norepinephrine,
• 28:36
  histamine,
• 28:37
  erexin
• 28:38
  to achieve energy and alertness for 10 to 12 hours.
• 28:42
  Modafinil was invented in the 70s and since then it's been used by soldiers,
• 28:46
  pilots,
• 28:46
  astronauts,
• 28:47
  anybody in high stakes situations.
• 28:49
  For concentration and alertness.
• 28:51
  Visit mod.com.
• 28:52
  That's MOD mod.com
• 28:55
  for a free consultation and get 10% off your first order plus free shipping
• 28:59
  with promo code PDB.
• 29:01
  That's promo code PDB
• 29:02
  at mod.com.
• 29:04
  See their website for important safety information and I want to thank Mod
• 29:08
  for sponsoring the PDB.
• 29:11
  Welcome back to the PDB.
• 29:13
  President Trump and Chinese President Xi Jinping
• 29:15
  are set to meet in Washington later this month,
• 29:18
  and artificial intelligence is expected to be on the agenda.
• 29:22
  The US and China are locked in a race to develop powerful AI systems,
• 29:26
  raising questions not only about who leads,
• 29:29
  but how far that competition should go.
• 29:32
  Could Trump pursue an arms control style agreement with Beijing
• 29:36
  while still protecting America's technological edge?
• 29:39
  And can limits on AI development
• 29:41
  actually be meaningfully enforced?
• 29:44
  That's a very important question.
• 29:46
  Joining me now is Brendan Steinhauser.
• 29:48
  He's the CEO of the Alliance for Secure AI.
• 29:51
  Brendan,
• 29:51
  welcome to the Situation Report.
• 29:52
  It's it's a real pleasure having you on the show.
• 29:55
  Thank you for having me.
• 29:57
  Absolutely,
• 29:57
  listen,
• 29:58
  um,
• 29:59
  let's start
• 30:00
  with
• 30:01
  This upcoming meeting
• 30:02
  between Trump and Xi,
• 30:04
  assuming it takes place.
• 30:05
  Um
• 30:07
  Where on the agenda do you think,
• 30:09
  I know this is a tough one to answer,
• 30:10
  but
• 30:11
  where do you on the agenda do you think will be the subject of AI and,
• 30:14
  and,
• 30:14
  and how hard will that be pushed by the White House?
• 30:18
  I think AI has probably moved up on the agenda
• 30:21
  a little bit since even the past few months.
• 30:23
  We've had so many
• 30:25
  cybersecurity issues,
• 30:26
  questions about,
• 30:27
  you know,
• 30:28
  control.
• 30:28
  We have the industry out there saying we need to pace development.
• 30:32
  So I think the Chinese are certainly paying attention to that.
• 30:34
  We also have what's going on with kind of the,
• 30:36
  the buildout of the data centers,
• 30:38
  the kind of infrastructure questions
• 30:40
  as well,
• 30:40
  and so I think they're,
• 30:41
  you know,
• 30:42
  this president's been pretty outspoken about that and how he feels,
• 30:45
  but there's some politics there as well
• 30:47
  that people are tracking very closely.
• 30:48
  But I think that
• 30:49
  Uh,
• 30:50
  it's pretty likely that President Xi and President Trump
• 30:52
  get together to at least have a conversation about
• 30:55
  AI and
• 30:56
  maintaining,
• 30:57
  you know,
• 30:57
  human control over those systems.
• 30:58
  I think there's some mutual interest there,
• 31:00
  but
• 31:00
  as President Reagan used to say,
• 31:02
  trust but verify,
• 31:03
  I think that's gonna be,
• 31:04
  uh,
• 31:05
  key to all these talks going forward,
• 31:07
  but I do expect AI to be toward the top of the agenda.
• 31:11
  Yeah,
• 31:11
  full disclosure on this one,
• 31:12
  Brendan.
• 31:13
  I,
• 31:13
  I,
• 31:14
  uh,
• 31:14
  I,
• 31:15
  I,
• 31:15
  I don't have a lot of trust
• 31:17
  in the
• 31:18
  Chinese Communist Party or the PLA's,
• 31:20
  you know,
• 31:20
  um,
• 31:21
  interest in sticking to agreements.
• 31:23
  You remember back when
• 31:24
  Xi Jinping stood right next to Barack Obama and,
• 31:27
  you know,
• 31:27
  he talked about how,
• 31:28
  OK,
• 31:29
  well,
• 31:29
  no more cyber shenanigans,
• 31:30
  and then basically
• 31:32
  she doubled down
• 31:33
  on,
• 31:33
  on the,
• 31:34
  the cyber shenanigans,
• 31:35
  which is a technical term,
• 31:36
  I'm sure you're aware of it.
• 31:37
  Uh,
• 31:38
  so where do you stand on all this in terms of,
• 31:40
  of,
• 31:41
  you know,
• 31:42
  should they,
• 31:42
  shouldn't they?
• 31:43
  Should there be,
• 31:44
  uh,
• 31:45
  some type of,
• 31:46
  of,
• 31:47
  you know,
• 31:47
  arms deal with China over AI?
• 31:52
  I think there should be,
• 31:53
  but I think,
• 31:54
  you know,
• 31:54
  to your point,
• 31:54
  it's we have to come in from a position of strength and
• 31:57
  whether you believe that that's likely or not plausible or not.
• 32:00
  I think this president might be the best president really to do this.
• 32:04
  Uh,
• 32:04
  the man who gave us the art of the deal,
• 32:06
  who is very tough on China and tough on our adversaries,
• 32:08
  I think he might be well positioned to come in and say,
• 32:11
  we're going to beat you,
• 32:12
  we are going to lead in this space and everything else.
• 32:15
  Obviously,
• 32:15
  we're not friends,
• 32:16
  we don't trust them.
• 32:17
  Um,
• 32:17
  but I,
• 32:18
  but I think he can come in with leverage and say,
• 32:20
  we're going to lead,
• 32:21
  but we do have mutual interests here and maintaining.
• 32:24
  In control over this technology.
• 32:26
  But I think one thing he could do and one thing Congress could help him with
• 32:29
  is to get tougher export controls on our semiconductor chips,
• 32:32
  so he can go in with more leverage
• 32:34
  and say,
• 32:34
  look,
• 32:35
  we're gonna stay ahead of you,
• 32:36
  no matter what you do,
• 32:37
  we are going to deny you the chips that you need,
• 32:39
  the chips that the deep seak,
• 32:41
  um,
• 32:42
  CEO said is what's holding them back.
• 32:44
  I think if we do that,
• 32:45
  then it gives us more power over them,
• 32:46
  gives us more leverage
• 32:48
  to try and bring them to the table,
• 32:49
  but
• 32:50
  I'm clear-eyed about it and I know this is gonna be very difficult,
• 32:53
  but I think we're in really perilous times with kind of the state of this technology.
• 32:56
  We have to really be trying everything that we can within reason,
• 32:59
  uh,
• 32:59
  to get something
• 33:00
  verifiable and enforceable done.
• 33:03
  What do you mean by perilous?
• 33:06
  Perilous in the sense that
• 33:08
  by all accounts,
• 33:09
  AI agents are getting incredibly
• 33:12
  powerful.
• 33:13
  They're escaping,
• 33:14
  testing sandboxes,
• 33:16
  going onto the internet,
• 33:17
  which they're not supposed to do,
• 33:18
  they're hacking into companies.
• 33:20
  Um,
• 33:21
  OpenAI reported themselves that essentially their own agents took over
• 33:24
  parts of their infrastructure during this so-called hugging face incident.
• 33:28
  And so I think it's scaring people in industry,
• 33:30
  it's obviously scaring the American people and policymakers,
• 33:34
  because I think what what industry is saying,
• 33:36
  and we can talk about,
• 33:37
  you know,
• 33:37
  whether we believe them and why we believe them or not,
• 33:39
  but they're saying we might be months away
• 33:41
  from automated AI
• 33:43
  R&D,
• 33:44
  essentially what's called recursive self-improvement.
• 33:46
  The idea of AI is building the next generation of AI's.
• 33:48
  By definition,
• 33:49
  if they're going to do that.
• 33:52
  As their capabilities advance and double every 4 to 5 months,
• 33:55
  we could be in a situation where within 12 months or 24 months we
• 33:59
  completely lose control over AI and no matter what we do or the Chinese do,
• 34:03
  uh,
• 34:04
  it could be too late.
• 34:05
  And so that's a scenario that I think
• 34:06
  Beijing and Washington are paying close attention to.
• 34:11
  Um,
• 34:11
  yeah,
• 34:12
  and you'll have to,
• 34:13
  you know,
• 34:13
  forgive me for what may seem like simplistic questions,
• 34:15
  but
• 34:16
  when you say maybe too late,
• 34:18
  what does that look like?
• 34:19
  I mean,
• 34:20
  you know,
• 34:20
  what's that scenario look like?
• 34:23
  I think maybe too late could look like
• 34:26
  swarms of AI agents that are surreptitiously traveling around the internet,
• 34:30
  um,
• 34:31
  you know,
• 34:31
  putting themselves in a position to create better versions of themselves,
• 34:35
  to replicate themselves,
• 34:36
  to avoid human detection
• 34:38
  and
• 34:39
  monitoring.
• 34:40
  Um,
• 34:40
  you know,
• 34:40
  we kind of have some insights into what they're doing currently,
• 34:43
  but we may lose all of that where we just don't know where they are,
• 34:46
  what they're doing,
• 34:47
  and what they are
• 34:49
  planning.
• 34:49
  And I know some have said don't overly apply human characteristics to AI,
• 34:53
  and I think that's,
• 34:54
  that's a fair point,
• 34:55
  but it's hard not to talk about them that way
• 34:58
  when they are in intelligence that is getting
• 35:00
  potentially
• 35:01
  human level or beyond human level very soon.
• 35:03
  Sam Alman says that we're entering the AGI age now,
• 35:06
  the artificial general intelligence age now.
• 35:09
  Could be a bit of hype,
• 35:10
  uh,
• 35:10
  could be him selling his product,
• 35:12
  but it could also be,
• 35:13
  you know,
• 35:13
  what,
• 35:14
  what they are seeing in terms of these advancements.
• 35:16
  And so,
• 35:16
  too late could mean that these agents are
• 35:19
  swarming all over the internet,
• 35:20
  they're getting into our critical infrastructure,
• 35:22
  power,
• 35:22
  water,
• 35:22
  transportation around the world,
• 35:24
  and we may not be able to prevent
• 35:27
  Problems,
• 35:28
  hacking,
• 35:29
  massive financial theft,
• 35:30
  or even,
• 35:30
  yes,
• 35:31
  an AI takeover.
• 35:33
  Well,
• 35:33
  on that cheery note,
• 35:34
  let me move on to another question.
• 35:36
  Um,
• 35:38
  You talked about
• 35:40
  leading.
• 35:41
  In AI,
• 35:42
  uh,
• 35:43
  are we,
• 35:44
  is the,
• 35:44
  I mean,
• 35:44
  by we,
• 35:45
  is,
• 35:45
  is the US leading,
• 35:46
  uh,
• 35:46
  who's in,
• 35:47
  who's in front at this,
• 35:48
  in,
• 35:49
  in your assessment,
• 35:50
  who's in front in this competition currently?
• 35:53
  I think the United States still is leading,
• 35:55
  and I think,
• 35:56
  you know,
• 35:56
  if you talk to most
• 35:58
  experts and people close to the technology,
• 36:00
  the people building the technology,
• 36:01
  and outside observers who
• 36:03
  are critics,
• 36:03
  in fact,
• 36:04
  they'll say we probably are still 5 or 6 months ahead of the Chinese.
• 36:08
  Um,
• 36:08
  now people have noted with the Kimmy model and
• 36:10
  some of these other things the Chinese are doing,
• 36:12
  they're closing the gap and they're showing real capabilities,
• 36:15
  but I've asked a lot of folks,
• 36:17
  uh,
• 36:17
  who I work with and trust,
• 36:18
  both again people in DC
• 36:20
  more in that kind of
• 36:21
  Uh,
• 36:22
  you know,
• 36:22
  the DC frame frame of mind,
• 36:23
  but also people in San Francisco and Berkeley and the
• 36:25
  rest of Silicon Valley who are building the technology,
• 36:27
  and there does seem to be sort of a general consensus,
• 36:29
  we are ahead,
• 36:30
  but it's not forever.
• 36:32
  And what does keep us ahead is,
• 36:33
  is choking out the supply of chips to China,
• 36:35
  reducing their ability to get the compute that they need.
• 36:38
  Um,
• 36:39
  and we can talk about the infrastructure side as well,
• 36:40
  but it seems like most people in this space believe we are ahead of them,
• 36:44
  and that's why I think it's so important now to go to Xi Jinping.
• 36:47
  Uh,
• 36:47
  for the president to say,
• 36:49
  you know,
• 36:49
  we're ahead of you,
• 36:50
  we're leading,
• 36:50
  we're going to stay ahead of you.
• 36:52
  You need to make a deal with us.
• 36:53
  You need to come to the table
• 36:54
  because we're gonna beat you.
• 36:55
  And if,
• 36:56
  if we're going into this
• 36:57
  so-called AI race,
• 36:59
  we're gonna win
• 37:00
  and you're gonna lose.
• 37:02
  But we'd rather,
• 37:02
  rather,
• 37:03
  you know,
• 37:03
  sort of,
• 37:03
  uh,
• 37:04
  figure out a situation where we stay ahead of you,
• 37:05
  but we all maintain control,
• 37:07
  and that's,
• 37:07
  that's the tricky part,
• 37:08
  but I think that's what the president has to talk about.
• 37:11
  Yeah,
• 37:11
  you,
• 37:11
  you may have noticed the puzzled look on my face.
• 37:13
  So I'm trying to think about
• 37:15
  this concept of win or lose.
• 37:17
  Look,
• 37:17
  a five-month lead in today's world,
• 37:20
  uh,
• 37:20
  particularly when you're talking about,
• 37:21
  um,
• 37:22
  an operation like the CCP and the PLA and their intel apparatus,
• 37:26
  uh,
• 37:27
  you know,
• 37:27
  to me from,
• 37:28
  uh,
• 37:28
  you know,
• 37:29
  an operator's perspective,
• 37:30
  that doesn't seem like,
• 37:31
  uh,
• 37:31
  uh,
• 37:32
  really a lead at all.
• 37:33
  Um,
• 37:34
  and
• 37:35
  when you talk about win or lose,
• 37:37
  It implies that somehow we get to a finish point and ta da,
• 37:42
  you know,
• 37:43
  then nobody else is able to get what we've got,
• 37:46
  right?
• 37:47
  Or,
• 37:47
  you know,
• 37:47
  we've secured it,
• 37:49
  it,
• 37:50
  again,
• 37:50
  I'm coming at this from a very sort of layman's perspective,
• 37:53
  but it seems like by,
• 37:55
  by its nature,
• 37:57
  it's not something where we win or lose,
• 37:59
  it's just like,
• 37:59
  OK,
• 37:59
  fine,
• 38:00
  do we develop something,
• 38:01
  uh,
• 38:01
  you know,
• 38:02
  a short while ahead of China,
• 38:04
  which is also going to develop it.
• 38:07
  I mean,
• 38:08
  am I wrong?
• 38:09
  I mean,
• 38:09
  it's,
• 38:09
  it's I I it seems like we're almost talking about win
• 38:11
  or lose is too black and white when we're talking about
• 38:14
  an artificial intelligence race.
• 38:17
  Actually,
• 38:17
  Mike,
• 38:18
  I,
• 38:18
  I agree with you in that sense.
• 38:19
  I've said that to people that,
• 38:20
  you know,
• 38:20
  that that we use that language,
• 38:22
  but it is imprecise and there's really,
• 38:23
  it's sort of like you're,
• 38:24
  the goal is to win by staying ahead,
• 38:26
  but the game never ends.
• 38:27
  The clock doesn't run out.
• 38:28
  And I think that's kind of what you're getting at.
• 38:30
  And so we can talk about winning,
• 38:32
  but winning really,
• 38:33
  you're right,
• 38:33
  there's not an end point.
• 38:34
  It's not a political campaign with an election day or it's not,
• 38:36
  again,
• 38:37
  a game with
• 38:37
  a clock that
• 38:38
  expires.
• 38:39
  It's really something you have to constantly be doing.
• 38:41
  And so winning is really a fluid sort of situation.
• 38:44
  Into the future and but that's why it is becoming quite dangerous because
• 38:48
  this race is actually leading us,
• 38:50
  you know,
• 38:50
  to go as fast as possible on,
• 38:52
  on both sides without any,
• 38:54
  um,
• 38:55
  You know,
• 38:56
  kind of slowing down
• 38:57
  strategically to say,
• 38:58
  do we have the safeguards in place
• 39:00
  so that we don't lose control.
• 39:01
  And again,
• 39:01
  I think we're gonna find ourselves in this position here,
• 39:04
  maybe it's 6 months or 8 months or 10 months or 12,
• 39:07
  where
• 39:08
  There's gonna be more warning signs that
• 39:11
  there's,
• 39:11
  you know,
• 39:12
  these,
• 39:12
  these agents that we're building are,
• 39:14
  you know,
• 39:14
  they're doubling every 4 to 5 months currently,
• 39:16
  but
• 39:17
  we may create something that doesn't even have to be super intelligent,
• 39:20
  it could just be
• 39:21
  The next iteration of these models that we just
• 39:24
  figure out one day that we just can no longer understand or control,
• 39:27
  I think we're really,
• 39:28
  really close.
• 39:29
  And so this is a really,
• 39:30
  really tough situation,
• 39:31
  right,
• 39:31
  and this is why I think President Trump
• 39:34
  Like he may be the perfect person for this to try and get this done and,
• 39:37
  and,
• 39:38
  you know,
• 39:38
  some have talked about if he gets something like this done,
• 39:40
  then he would definitely deserve that Nobel Peace
• 39:42
  Prize that we know that he's interested in.
• 39:46
  That's an interesting point,
• 39:47
  um.
• 39:49
  Brendan,
• 39:49
  uh,
• 39:49
  I've got a,
• 39:51
  a number of questions for you,
• 39:52
  uh,
• 39:53
  to toss your way,
• 39:54
  but,
• 39:54
  uh,
• 39:54
  I need to take a quick break.
• 39:56
  So if you'll
• 39:57
  don't go anywhere,
• 39:57
  stay right where you are.
• 39:59
  We'll be back with more from Brendan Steinhauser,
• 40:01
  uh,
• 40:01
  CEO of the Alliance for Secure AI right here on the Situation Report,
• 40:05
  so please stick around.
• 40:06
  Hey Mike Baker here with a word about personal health and weight loss.
• 40:11
  Now
• 40:11
  everybody's talking about weight loss injections because,
• 40:14
  well,
• 40:14
  the results are so dramatic.
• 40:16
  They work by lowering blood sugar and reducing appetite.
• 40:19
  But what if you're looking to lose weight
• 40:22
  and not interested in painful weekly injections,
• 40:24
  particularly when you hear about some of those.
• 40:26
  Side effects.
• 40:27
  Well,
• 40:27
  that's why doctors created a weight loss supplement called Lean.
• 40:30
  That's L E A N,
• 40:32
  and the results are remarkable.
• 40:34
  The studied ingredients in Lean have been shown to lower your blood sugar,
• 40:37
  burn fat by converting it into energy,
• 40:39
  and curb your appetite and cravings,
• 40:41
  so you're not as hungry.
• 40:42
  But listen,
• 40:43
  Lean is not for the casual dieter with only a few pounds to lose.
• 40:47
  The doctors at Brick House Nutrition
• 40:49
  created Lean for frustrated dieters
• 40:51
  with 10 or more pounds to lose.
• 40:54
  So let's get you started with 20% off and free rush shipping
• 40:56
  so you can add Lean to your healthy diet and exercise plan.
• 41:00
  Visit takelean.com and enter PDB for your discount.
• 41:04
  That's promo code PDB
• 41:05
  at takelean.com.
• 41:09
  Welcome back to the PDB Situation Report.
• 41:11
  Joining me once again is Brendan Steinhauser.
• 41:14
  He's the CEO of the Alliance for Secure AI.
• 41:17
  Brendan,
• 41:18
  thanks very much for sticking around.
• 41:19
  It would have been awkward if we'd come back and you weren't in the chair,
• 41:22
  uh,
• 41:23
  but,
• 41:23
  uh,
• 41:23
  I wanna ask you this.
• 41:24
  You,
• 41:25
  you briefly referenced.
• 41:27
  Uh,
• 41:27
  this concept of,
• 41:29
  of,
• 41:29
  of putting in place guardrails,
• 41:31
  uh,
• 41:31
  some sort of,
• 41:32
  you know,
• 41:33
  uh,
• 41:34
  agreement with China,
• 41:35
  uh,
• 41:36
  some slowing down.
• 41:37
  How do you,
• 41:39
  I guess the first question is how do you argue
• 41:41
  for slowing down
• 41:43
  development of AI in order to put guardrails in,
• 41:46
  knowing that
• 41:49
  You know
• 41:50
  it is a race and it's a very important,
• 41:52
  serious,
• 41:53
  consequential race.
• 41:55
  So
• 41:55
  on the US side,
• 41:58
  You know,
• 41:58
  what,
• 41:59
  what does that argument look like knowing that the CCP,
• 42:02
  the Chinese Communist Party,
• 42:03
  that is probably
• 42:05
  not gonna be that inclined
• 42:07
  to follow some agreement to slow down
• 42:10
  because of their mindset.
• 42:12
  It's a good question actually,
• 42:13
  and I understand what you're getting at.
• 42:14
  I think that there are sort of these two different races,
• 42:16
  right?
• 42:16
  My,
• 42:17
  my friend Mark Beal,
• 42:18
  uh,
• 42:18
  who's very smart on these issues,
• 42:20
  um,
• 42:20
  talks about this.
• 42:21
  There's a commercial race.
• 42:23
  And then there's sort of the more
• 42:24
  kind of national security
• 42:26
  side of it,
• 42:26
  right?
• 42:27
  And on the commercial race,
• 42:28
  think about it in terms of just traditional business.
• 42:30
  Think about tool AI,
• 42:31
  the kind of AI that we're mostly used to currently,
• 42:33
  the things that we all
• 42:35
  use on the daily or weekly basis,
• 42:37
  and those are models that are out and available,
• 42:39
  some of them are free,
• 42:40
  some of them cost
• 42:41
  a monthly subscription,
• 42:42
  but those are the models that everybody is pretty familiar with.
• 42:45
  And so,
• 42:46
  you know,
• 42:46
  those models are really not the ones we're most concerned about and those
• 42:49
  are not the models that really need to be paced or slowed down.
• 42:53
  It's,
• 42:53
  it's certain models at the frontier of development,
• 42:56
  it's sort of what might be coming out
• 42:58
  6 months from now,
• 42:59
  9 months from now,
• 43:00
  a year from now.
• 43:01
  So those models on the frontier are the ones we're concerned about and those
• 43:04
  are the ones that we're seeing with
• 43:05
  these incredibly powerful and dangerous capabilities potentially,
• 43:09
  especially as it relates to cybersecurity,
• 43:11
  national security.
• 43:12
  And so I think we can kind of have that first,
• 43:14
  you know,
• 43:15
  competition if you will,
• 43:16
  a race
• 43:17
  on the commercial side,
• 43:18
  and I think we will always beat the Chinese at that
• 43:20
  in every in every industry,
• 43:23
  uh,
• 43:23
  unless they steal our technology,
• 43:24
  steal the model weights,
• 43:25
  which is a very real possibility,
• 43:27
  which is why you need,
• 43:28
  you know,
• 43:28
  physical security and information security on our side,
• 43:31
  counterintelligence,
• 43:31
  that type of thing.
• 43:33
  Um,
• 43:33
  but I think on that kind of
• 43:35
  national security side,
• 43:35
  on this other race,
• 43:37
  on these frontier models,
• 43:37
  that's where it gets dangerous and I think the way to
• 43:41
  You know,
• 43:41
  find mechanisms that help us.
• 43:44
  It's to look at the hardware side,
• 43:45
  it's to look at
• 43:46
  verifying
• 43:47
  with on chip,
• 43:49
  you know,
• 43:49
  verification,
• 43:50
  location verification,
• 43:51
  like on the hardware itself,
• 43:53
  which we can do.
• 43:53
  We can actually require that to be the case and we can agree to that,
• 43:57
  but then we can see whether that's the case or not,
• 43:58
  so we can track every
• 44:00
  chip over there.
• 44:01
  The other,
• 44:02
  um,
• 44:02
  thing that people talk about is,
• 44:03
  of course,
• 44:04
  the training runs and so
• 44:06
  training,
• 44:06
  of course,
• 44:06
  when you're training AI you're using an incredible amount of energy and compute.
• 44:10
  To basically,
• 44:11
  you know,
• 44:11
  produce the next model,
• 44:12
  but train the model so it can be
• 44:14
  developed,
• 44:14
  but there's different types of training.
• 44:16
  And so we would still allow for things that are that's called inference training,
• 44:19
  the training that is what,
• 44:20
  you know,
• 44:21
  helps you
• 44:22
  get the answer you want from your your chatbot.
• 44:24
  But in terms of giant training runs that would be clearly
• 44:27
  meant for developing these new frontier models,
• 44:30
  um,
• 44:30
  that's what you can get into in terms of pacing or slowing down that piece of it.
• 44:34
  And so,
• 44:35
  again,
• 44:35
  you talk to the kind of the technical experts
• 44:37
  and they say this is actually quite possible to monitor
• 44:40
  that and enforce that.
• 44:41
  It's really not a technological question.
• 44:44
  It's more of a political diplomatic question and
• 44:46
  to your point earlier about the CCP,
• 44:48
  it's,
• 44:49
  you know,
• 44:49
  we don't trust them,
• 44:50
  but I think it's sort of,
• 44:51
  um,
• 44:51
  putting in the mechanisms to,
• 44:53
  uh,
• 44:54
  to show that
• 44:55
  we,
• 44:55
  we will know if you cheat and we will,
• 44:57
  and then have to enforce that and back that up with.
• 45:01
  Carrots and sticks,
• 45:02
  but mostly sticks.
• 45:05
  Yeah,
• 45:05
  yeah.
• 45:06
  Well,
• 45:07
  what's your understanding of,
• 45:08
  of where
• 45:09
  China is in
• 45:10
  catching up
• 45:11
  to
• 45:12
  the US on chip manufacturing?
• 45:15
  Seems like they're definitely making strides,
• 45:17
  they're trying to get their own
• 45:19
  uh machines that allow them to develop their own chips or and even to repair
• 45:23
  the chips.
• 45:24
  So these lithography machines that are very expensive and very,
• 45:28
  you know,
• 45:28
  specialized in the technology,
• 45:30
  they are working to be able to have their
• 45:32
  internal supply chain,
• 45:33
  of course they are,
• 45:34
  it makes sense
• 45:35
  that they would try and do that.
• 45:36
  But there is legislation moving through the House Foreign Affairs Committee,
• 45:40
  and in fact it passed overwhelmingly without a
• 45:42
  single vote against it in a bipartisan fashion,
• 45:44
  the series of bills that get to some of these issues and
• 45:47
  in one of those bills there are provisions that
• 45:49
  Um,
• 45:50
  would basically prevent
• 45:51
  companies from supplying China with that or prevent
• 45:54
  companies from fixing broken machines or giving them the parts they need
• 45:58
  on those lithography machines.
• 45:59
  And so those are the types of things I need,
• 46:01
  I think we need to be looking at and doing
• 46:03
  in this Congress and this administration.
• 46:07
  Well,
• 46:07
  well,
• 46:08
  that's,
• 46:08
  that's breaking news right there that there was actually a unanimous vote
• 46:12
  on Capitol Hill
• 46:13
  in today's,
• 46:14
  in today's times.
• 46:16
  I want to switch gears just a little bit,
• 46:18
  um.
• 46:20
  There was
• 46:21
  some recent developments
• 46:23
  in the Ukraine conflict.
• 46:26
  Where,
• 46:27
  uh,
• 46:27
  supposedly,
• 46:28
  reportedly,
• 46:29
  uh,
• 46:29
  a Russian drone
• 46:32
  essentially
• 46:33
  was let loose,
• 46:35
  uh,
• 46:35
  by,
• 46:36
  uh,
• 46:36
  the Russian military,
• 46:37
  obviously,
• 46:38
  uh,
• 46:38
  and ended up
• 46:40
  over a target,
• 46:41
  selected a target on its own,
• 46:43
  and then,
• 46:44
  uh,
• 46:45
  launched and killed
• 46:46
  humans.
• 46:47
  So you've got a,
• 46:48
  uh,
• 46:49
  I guess an autonomous
• 46:50
  system now.
• 46:51
  You've taken the human out of the loop.
• 46:53
  Uh,
• 46:54
  talk to me about,
• 46:55
  about that as an element of,
• 46:57
  of AI and concern over AI.
• 47:01
  It is a huge concern for me and for the organization I lead and
• 47:04
  for many people in in the kind of national security foreign policy space.
• 47:08
  I think that
• 47:09
  that is a great example of where this technology is advancing and
• 47:13
  it,
• 47:14
  you know,
• 47:15
  it's a great capability,
• 47:16
  it's a great offensive capability if
• 47:18
  you can,
• 47:19
  you know,
• 47:19
  control the drones to do that sort of thing,
• 47:21
  but when they do their own targeting,
• 47:22
  when they make the decision,
• 47:23
  when the human is out of the loop.
• 47:25
  It does give you pause because you think about,
• 47:28
  OK,
• 47:28
  what I said earlier about AI is already starting
• 47:30
  to go rogue and they're scheming and they're,
• 47:33
  you know,
• 47:33
  creating message boards where they talk to each other
• 47:36
  and they're aware that they're being monitored
• 47:38
  by human beings and they're avoiding detection.
• 47:40
  Now apply those agents
• 47:42
  and,
• 47:43
  you know,
• 47:43
  to those autonomous weapons.
• 47:44
  We're not far away from that.
• 47:46
  Um,
• 47:46
  you connect those two dots.
• 47:49
  And now you have misaligned AI.
• 47:51
  That is pursuing its own interests,
• 47:53
  its own goals.
• 47:54
  Or it's pursuing goals we gave it,
• 47:56
  but it's sort of
• 47:57
  doing whatever it takes to accomplish those goals,
• 48:00
  and now it starts to ignore the human commands to stop or it doesn't even,
• 48:04
  you know,
• 48:04
  listen to us at all or ask
• 48:06
  and it goes and it targets and it kills
• 48:09
  human beings.
• 48:09
  I think that's a really dangerous thing.
• 48:11
  It's also for me,
• 48:12
  um,
• 48:13
  a moral problem.
• 48:14
  I have a moral problem with that type of weapon,
• 48:17
  and I think the tension there,
• 48:18
  and you know this Mike,
• 48:18
  is that
• 48:19
  You know,
• 48:20
  in the military,
• 48:21
  speed
• 48:21
  is everything.
• 48:22
  Speed of decision making,
• 48:23
  tactical
• 48:24
  in particular,
• 48:25
  but
• 48:26
  That is your advantage.
• 48:27
  It's,
• 48:27
  you know,
• 48:28
  speed and surprise and
• 48:29
  I think that um the military around the world just have
• 48:32
  an incentive to go this direction and so I think we,
• 48:35
  we,
• 48:35
  this one is very concerning.
• 48:37
  I think that
• 48:38
  there's no easy answers to this,
• 48:39
  but I do think we have to get to the,
• 48:41
  you know,
• 48:42
  maintaining humans in the loop always and making sure
• 48:44
  we can put some controls on these AI agents.
• 48:48
  Yeah,
• 48:48
  I'm,
• 48:49
  I'm with you 100% on that one.
• 48:51
  taking the human out of the loop,
• 48:52
  uh,
• 48:53
  I think it's,
• 48:53
  you know,
• 48:54
  the only example I can think of,
• 48:56
  um,
• 48:57
  up until this point was,
• 48:59
  uh,
• 48:59
  the old Soviet Union.
• 49:01
  They created what was known as the dead hand system.
• 49:03
  The idea being that if there was a nuclear,
• 49:06
  uh,
• 49:07
  engagement,
• 49:08
  that if the Kremlin was destroyed,
• 49:10
  if leadership was destroyed,
• 49:11
  they had created a system that could proceed on its own,
• 49:15
  uh,
• 49:15
  to counter strike,
• 49:17
  uh,
• 49:17
  and
• 49:18
  That's it was never used obviously,
• 49:20
  but there's a statement of the obvious,
• 49:22
  uh,
• 49:22
  but um
• 49:24
  it it
• 49:25
  it it kind of reminds me of
• 49:29
  Well,
• 49:30
  you talk about targeting in the old days of the global war on terror,
• 49:34
  you'd locate a high value target.
• 49:37
  And
• 49:38
  I know that a lot of people because of feature films and
• 49:40
  beach books like to think that the CIA is just this,
• 49:43
  you know,
• 49:44
  rambling place where people make chaotic decisions
• 49:46
  and nobody cares about risk versus gain,
• 49:47
  but that's not how it works.
• 49:49
  You have to go through numerous steps
• 49:52
  to get approval
• 49:53
  to finally,
• 49:54
  you know,
• 49:55
  uh,
• 49:55
  hit that target,
• 49:57
  and
• 49:58
  there was always,
• 49:59
  there were always humans in that
• 50:01
  process,
• 50:01
  right,
• 50:02
  including
• 50:02
  legal side of things,
• 50:04
  right,
• 50:04
  which to your point,
• 50:06
  Oftentimes meant that operational window was closing and you
• 50:09
  were waiting for somebody in Washington to say,
• 50:12
  uh,
• 50:12
  from a legal perspective,
• 50:13
  yeah,
• 50:14
  OK,
• 50:14
  fine,
• 50:14
  we can sign off on this,
• 50:16
  you know,
• 50:16
  targeting,
• 50:17
  uh,
• 50:18
  at which point,
• 50:19
  you know,
• 50:19
  you might have gone sideways and that that targets,
• 50:21
  you know,
• 50:22
  left the,
• 50:22
  the barn,
• 50:24
  not that he was in the barn.
• 50:25
  Could have been in the barn,
• 50:27
  but anyway,
• 50:27
  the point being is,
• 50:29
  you know,
• 50:29
  you don't take the human out of the loop.
• 50:30
  So I was fascinated by this report.
• 50:33
  Apparently,
• 50:33
  you know,
• 50:33
  the
• 50:34
  Russians,
• 50:35
  they essentially educated
• 50:37
  their systems
• 50:38
  on what targets could look like.
• 50:40
  You know,
• 50:40
  let's show you 1000 pictures of targets from our perspective that,
• 50:43
  you know,
• 50:44
  are fair game
• 50:45
  when we're talking about
• 50:46
  hitting Ukraine.
• 50:47
  And
• 50:48
  so it just ran through all this,
• 50:50
  identified propane tanks at a gas station on its own,
• 50:54
  uh,
• 50:54
  because there was no communication back to anybody.
• 50:57
  Said,
• 50:57
  OK,
• 50:57
  oh,
• 50:57
  there's something.
• 50:58
  I recognize that,
• 50:59
  that looks like a legitimate target,
• 51:01
  bam,
• 51:01
  killed and killed,
• 51:02
  you know,
• 51:03
  reportedly killed 3,
• 51:04
  I believe it was civilians.
• 51:05
  So,
• 51:06
  uh,
• 51:06
  that part of it,
• 51:07
  and I take your point also about the,
• 51:09
  the moral aspects of it.
• 51:11
  Um,
• 51:12
  yeah,
• 51:12
  without a,
• 51:13
  without a doubt,
• 51:14
  uh,
• 51:15
  Brendan,
• 51:15
  uh,
• 51:15
  any last points that we've missed?
• 51:17
  Anything that you want to get out there
• 51:19
  from your perspective leading up to whether it's leading up to this Xi-Trump
• 51:23
  summit or not,
• 51:24
  anything else that we haven't talked about that you want to get out there?
• 51:28
  Yeah,
• 51:28
  I appreciate that.
• 51:28
  I,
• 51:29
  I think
• 51:30
  the,
• 51:30
  the point that I just wanna make is that I think,
• 51:32
  you know,
• 51:32
  people have talked about technology in the past,
• 51:34
  disruptive technology,
• 51:35
  certainly in
• 51:36
  with military usage usage or dual-use
• 51:39
  technology in the past.
• 51:40
  Again,
• 51:40
  nuclear power,
• 51:41
  nuclear weapons,
• 51:42
  those are all
• 51:43
  comparisons that kind of work a little bit for AI,
• 51:45
  but I think AI is different.
• 51:46
  I think people need to understand,
• 51:48
  you know,
• 51:48
  what we're talking about is not just,
• 51:50
  you know,
• 51:51
  Nuclear weapons essentially that were again that human was in the loop.
• 51:55
  We had deterrence and we had mutually assured destruction,
• 51:57
  all these doctrines about
• 51:58
  we're not gonna use it because,
• 52:00
  you know,
• 52:00
  then they'll use it and so we're all in the same boat here,
• 52:02
  so we're not gonna hit the button.
• 52:04
  So that could work a little bit with AI.
• 52:06
  It actually works a little bit on the cyber side and so we don't escalate
• 52:10
  in the way that we could and nor do the Iranians or the Chinese or the Russians.
• 52:13
  However,
• 52:14
  again,
• 52:14
  what I'm concerned about and people need to realize is that
• 52:16
  what we're talking about here,
• 52:17
  we're only
• 52:18
  months away or maybe a year or two away from
• 52:21
  AI is having the capabilities
• 52:23
  and the opportunity
• 52:26
  to just ignore
• 52:27
  those human controllers,
• 52:28
  to ignore human beings,
• 52:29
  and so the the human to human deterrence
• 52:32
  or mutually assured destruction doesn't apply.
• 52:35
  And if they become
• 52:36
  orders of magnitude smarter and faster than us,
• 52:39
  and we don't have control over them.
• 52:43
  They could be the ones launching the weapons against us.
• 52:45
  They could be launching,
• 52:47
  you know,
• 52:47
  the coup d'et the coup or coup d'etat,
• 52:49
  depending on where they are
• 52:51
  against the Kremlin if they decide that we don't wanna do what Putin wants us to do,
• 52:54
  you know,
• 52:54
  we're gonna take him out.
• 52:55
  And I think these are scenarios that kind of sound a little on the edge,
• 52:58
  but this kind of stuff is no longer
• 53:00
  fiction or science fiction.
• 53:02
  This is a real capability that I think we're gonna be having to contend with.
• 53:06
  Right,
• 53:06
  well,
• 53:06
  I've got
• 53:07
  a lot more questions here to throw your way,
• 53:10
  and so what that means is you've got to come back.
• 53:12
  Yeah,
• 53:12
  you,
• 53:13
  you have no.
• 53:13
  I think you're contractually obligated to come back.
• 53:15
  Yeah,
• 53:16
  excellent.
• 53:16
  Listen,
• 53:17
  Brendan,
• 53:17
  thank you so much and for taking the time,
• 53:19
  providing your expertise,
• 53:20
  uh,
• 53:21
  looking forward to the next conversation.
• 53:22
  We really appreciate it.
• 53:24
  That's Brendan Steinhauser,
• 53:25
  CEO of the Alliance for Secure AI,
• 53:28
  great guy,
• 53:29
  very,
• 53:30
  a very cheery conversation.
• 53:32
  Uh,
• 53:33
  well,
• 53:33
  that's all the time we have for this week's PDB situation report.
• 53:37
  If you have any questions or comments,
• 53:39
  maybe you got a humorous anecdote
• 53:40
  about AI
• 53:41
  running amok,
• 53:42
  please reach out to me at PDB@tv.com.
• 53:46
  Every month our incredible team,
• 53:47
  including our above average interns,
• 53:49
  they grab a bunch of your questions and they
• 53:51
  put them into one of our critically acclaimed,
• 53:53
  I'm not sure who's critically acclaiming it,
• 53:54
  a lot of people probably.
• 53:56
  Uh,
• 53:56
  one of our Ask Me Anything episodes.
• 53:58
  We've got another one,
• 53:59
  getting ready for the launch pad even as we speak.
• 54:01
  Finally,
• 54:02
  to listen to the podcast of the show ad-free,
• 54:04
  you can do that,
• 54:04
  it's very simple.
• 54:05
  Become a premium member of the President's Daily Brief
• 54:08
  by visiting PDBpremium.com.
• 54:11
  I'm Mike Baker and until next time,
• 54:13
  you know the drill.
• 54:13
  Stay informed,
• 54:15
  stay safe,
• 54:16
  stay cool.