Steven Sinofsky: AI Doesn't Need New Rules Yet

0:00Theo Jaffee:The whole topic of regulation for me just seems completely backwards because it's starting before we even know what we're regulating. There's no reason why the AI companies should be against open source other than we just don't want our competition to exist and we don't want to bother to compete. We'd rather just compete with each other and not worry about that crazy open source competitor. Truth is, no one knows the future. What those assumptions mean are we should regulate this based on our own personal predictions of the future. But the history of being right about those predictions is pretty limited.

0:39Theo Jaffee:And so we should be really careful about that because those are all self-serving.

0:44Steven Sinofsky:How should governments regulate AI when the technology is still evolving? Theo Jaffe and Sofia Puccini are joined by Steven Sanofsky to discuss why he believes AI regulation is moving too fast. the case for open source models, and what previous waves of technological innovation can teach us about building policy without stifling progress. We are live with Stephen Sinofsky, amazing tech analyst, author of Hardcore Software, longtime Microsoft leader, and we're so glad to have you back on. Stephen, welcome back. Hey there.

1:20Theo Jaffee:Super fun to be here.

1:22Steven Sinofsky:Yeah, so much in AI, like where do we even start? Well, our goal is to say stuff that we haven't said yet. So let's see if we can do that. We will try. Novel insights time, yeah. Novel insights. So open source, there's been much discussion of regulation of open source, Chinese open source models in particular, on both sides of the pond. China has considered export controls, but also Xi Jinping has said we're encouraging open source. And then in America, we've had Scott Besson says we're going to be looking into IP theft. and some people have considered import controls or requiring a license. So there's a lot going on right now.

2:02Steven Sinofsky:It's very fluid. What are your takes on regulation of open source models?

2:07Theo Jaffee:Well, it just seems, the whole topic of regulation for me just seems like completely backwards because it's starting before we even know what we're regulating. And if you go back in history, one of the best things about the 20th century in America was that so much experimentation was happening, so much innovation. And that does have this potential downstream of like, oh gosh, this thing happened that we have to roll back. Like a super famous example was safety in cars and that car companies spent the first 50 years making cars, making cars. And then in the 1960s, it sort of became clear that wow, we could actually make cars much, much safer.

2:56Theo Jaffee:Now, it took 60 years to understand that cars were super dangerous, and it was all that evolution. And in all fairness, like, it wasn't a design criteria. You know, seatbelts and airbags, and these things became a very long process to get them put into the upstream of making cars. And you could go through every sort of dimension. There's the antitrust law and the whole reason why, You know, oh, my God, you can't be an oil company where you sell gasoline, produce gasoline, and also pull it out of the ground. Or you can't make movies, have actors and actresses under contract, and own the movie theaters and distribution.

3:39Theo Jaffee:And maybe that shouldn't be right. And there are millions of examples. The challenge is the story of regulation is always told as though if they would have gotten in early, they would have prevented this stuff from happening. And, you know, you look back and you're like, oh, you know, what if they would have shown up at Henry Ford and said, we need airbags? And Henry Ford is like, OK, we can't figure out how to make engines work. Like, let's let's get that done. And, you know, also these cars go 15 miles an hour and, you know, we're just trying to make them go. And, you know, of course, air travel is like that.

4:15Every technology innovation, it took a long time for two things to happen.

4:21Theo Jaffee:One, for it to just work at all. And, you know, today we're talking about AI and it can't be that AI is both the most intelligent thing in the world and it generates gibberish hallucinations and the answers are wrong and you can't rely on it. Like those both can't be true at the same time. You can look at social networking have the same effect where like, oh, it's a toy, it's a giant waste of time. You know, it's either that or it can topple governments. You know, it couldn't be, and they were at the same time, people were saying both of those things about social networks. And so it can't be, and now they've added this dimension that they are mind control devices on our nation's use.

5:04Theo Jaffee:And at the same time, they're a huge waste of time and the content is all slop. Like all of these things can't be true. And so a lot of times it just, this whole notion of regulating is this hindsight and you assume that only good would have happened if regulation happens. But that's just, you can't prove that. And so you're in this very tricky situation. And so today you have this world, Well, oops, I just got lost on video. Hey, give me just a second. What just happened? Oh, I just crashed. No worries. You're still here in voice form, so. Yeah, I got you in voice. And I just crashed. I like literally crashed.

5:46Theo Jaffee:Hang on.

5:47Steven Sinofsky:The spirit of Steven Sanofsky still lives. It's a beautiful gear icon.

5:52Theo Jaffee:Oh, is that? I don't know. Oh, is it? Wow, that was super interesting. Yeah, we can pause the stream for a second while we figure it out. No, I like... I officially... And I'm working. I am closer. Well, can we do it with this? Is that working? It works. It works with audio. You just become an anonymous guest.

6:14Steven Sinofsky:Oh, hang on. Your newest Anon guest is like suspiciously knowledgeable about the Microsoft Surface Pro. How about that? That'll work. Okay, you're back. You're so back.

6:23Theo Jaffee:I'm back. It's not the right video, but it is video. And so we have this thing where everybody, that was just a total crash, by the way, of my like AV stack. And so we have this thing where people are just trying to rush to regulate. And that, it actually came up, it happened so often that this guy came up with a term and it's called the precautionary principle. And the idea is regulators who, you know, look, you don't get a job in government to regulate and then say, and then don't regulate. Like you come to work to craft regulations and to come up with what you want to do. And so the precautionary principle was like, well, let's just get ahead and let's regulate before anything bad happens.

7:07Theo Jaffee:But when you do that, what you really do is you constrain the solution set. And I think back to the internet and what would have happened if we would have precautionarily regulated the internet. Where would it have started? Like, would we all just be using AOL Instant Messenger right now? Because that was like the internet that everybody knew. And it had all these attributes that regulators like. Like, it was one company and it was in Virginia. Like, literally, that's even the best case because it was practically in the government already. And, you know, you could go to them and you could tell them to do stuff.

7:44Theo Jaffee:And it was a walled garden. If you didn't like something, you could turn it off. and it was perfect. Or would it have been in like Web 1.0 where everybody is using six tags in HTML, there was not yet really commerce and we all would have just looked things up on Yahoo and Excite. And they would have said, okay, these are the two companies we're blessing, Yahoo and Excite. And there's no video, there's no audio. You know, we're just, you know, and you just, you kind of go and you pick your time of when it was we're all comfortable with, like whatever it is that, that's going on. And so that's, of course, what happens is at that moment, the companies that are really hot are the ones that the government seeks input from.

8:28Theo Jaffee:And some people think that that's bad. I actually think it's good because they know presumably more than anybody else. But what they also know is what they want to do. And so those companies then, they sort of push government to go in a certain direction. Historically, technology companies have said, whoa, how about this government, hands off. We don't like regulation like at all. And, you know, that's a lot different than say what happens, you know, if the government's already regulating like safety of chemicals, it's very hard for the pharmaceutical companies to say, leave us alone and don't regulate us at all.

9:04Theo Jaffee:And so that was one of the first early regulatory bodies. But the tech companies this time around in AI have completely just blown my mind. Now, you have to understand, I spent like I was, Microsoft employee for like two years. And then the government started investigating Microsoft in like 1992. Told you for what? You wouldn't even understand what I was talking about. But now we had, you know, two years ago, like two years ago, what were people doing with AI? Like chatbots were new. And you had the leaders of the AI companies showing up to Congress, literally, please regulate us. Oh, we're begging you to regulate us.

9:46Theo Jaffee:And that is just this crazy notion. And so what you had was they just played right into the government's view that they missed regulating technology. They missed regulating the Internet. They missed regulating the PC. They missed regulating the mainframe. And so this was their chance. And they were being asked. And so they, like, rolled out the red carpet. And the government knew what was going on, but because it solved a problem for them, which was how to really get into regulating big technology companies, they sort of went with it. And so the government normally, like, they kind of go, oh, they're going to try to control us.

10:27Theo Jaffee:They're going to lobby us and tell us what to do. And in fact, everybody knew that was what's happening. And that's called regulatory capture. And this is a long history. And most of the people in government that are savvy with government know that's what's happening, that they know the companies are saying, do this thing because it's good for everybody. And they always have good reasons. They always say, oh, the products will be better or the price will be lower or there'll be much clearer, you know, lines of service and the marketplace will be more fair. Like, for example, AT &T, which is a fascinating example because they were actually a government created monopoly.

11:02Theo Jaffee:Like literally the government created the phone company. and they owned it essentially. But then when the government was saying, you know, we think we need to control your prices and do stuff, AT &T went to them and they said, okay, here's the deal. We can guarantee that every single address in America will have a telephone and it's called universal access. And that's why you can only let us do this. And so basically they made this deal that AT &T was gonna be the national phone company, even though it was a private company, if they promised to deliver phones everywhere. And it got really tricky because with that came, like, a bunch of rules about using the telephone lines that today led to surveillance, you know, and all of this stuff.

11:51And so what happened was basically AT &T, a private company,

11:56Theo Jaffee:became really the United States phone company. And it was just a branch of the government. And this has happened time and again. J.P. Morgan became the National Bank of America. You know, the Standard Oil became the National Oil Company of America. Even at some crazy extreme, Warner Brothers became the movie theater of America. You know, and every interesting, and it turns out, radio, television, and telephone all sort of followed the same path, where they were, there were private companies that were basically beholden to the federal government. You saw a lot of this when the New Deal was created.

12:36Theo Jaffee:And FDR basically used the Federal Communications Commission to control the messaging of the New Deal by basically threatening the licenses of the radio broadcasters. And there's a lot of controversy of just how much they did and did it really cross some line. But the truth is they were just in line. Whether they wanted to be or not, they were going to be in line. And the same thing happened with television. And so this whole idea of being against open source, it's really rooted in, like, the government can't be against open source because if you get a government grant, you're required to release all your software as open source.

13:19Theo Jaffee:Like, that's the government way of doing computer science research. So how can all of a sudden the government say, we don't want open source? It doesn't even make sense because nobody, none of the leading academic researchers that will be government funded. And so it just makes no sense at all to me. And I'm, you know, Microsoft, where we were a closed source, you know, Bill Gates invented the closed source business model. And so we lived through the rise of HTTP and Apache and Web and Linux and all of this other stuff. But there is a role for open source. And most importantly, the open source existed even when Microsoft existed, even when IBM existed.

14:06Theo Jaffee:And so there's no reason why the AI companies should be against open source other than we just don't want our competition to exist and we don't want to bother to compete. We'd rather just compete with each other and not worry about that crazy open source competitor, which I just I can't even put words into how obnoxious that is. It's just not, it's just not true. And they benefited enormously from the academic research community, all of which was open published in open source. You know, it's just crazy. And that's how we got here. And that's why we're even having this debate.

14:41Steven Sinofsky:Yeah, well, I think that, you know, most AI labs, AI companies would be like totally on board with this idea of like, yeah, of course we don't want, you know, government centralization and regulation. but they think you know ai is not like the other technologies it's not like the internet it's not like the pc they're building towards you know artificial super intelligence and this will be like a totally different thing and uh will require like a novel approach so i think uh maybe different people in this debate are working on like different assumptions of like

15:12Theo Jaffee:where the technology is headed well those are let's let's that that's the most generous way to express it is different assumptions. The truth is no one knows the future. So what those assumptions mean are we should regulate this based on our own personal predictions of the future. But the history of being right about those predictions is pretty limited. And so we should be really careful about that because those are all self-serving. There's no reason. And to say it's different, I genuinely believe there are people who work on AI who really believe in this ASI, AGI arc of superintelligence. I mean, they went to Congress two years ago and they said literally there was fear in their eyes for the economy and for people dying everywhere.

16:08Theo Jaffee:At the same time, of course, it didn't work and it was hallucinating and it was silly and it was making things up. So again, they're drawing some predictive arc. And even today, people are fighting over, is AI good enough to do stuff? What is it good at? So you can't have all of these things being true at the same time. So what it really says is, now is not the time to regulate because we don't know where it's heading. So all you're going to do is kneecap innovation. And there are laws in place for a zillion, almost any scenario, in fact, I would say 100 % of the scenarios that people say are problematic, there are already laws against them.

16:54Theo Jaffee:Like there are already laws against, you know, putting bad drugs on the market. There are already laws against not giving people bank loans for their gender or their race or their other attributes. And there's already like Senator Warner today came up with the big four point plan about AI. And he's like, well, we have to address the issue of non-consensual nudity. And it's like, okay, but there are laws against this. Like you can't be showing nude pictures to children. Like that's already a law. And you can't be showing nude pictures of children. It's already a law. And so like every one of these evil scenarios that they worry about, it's already illegal.

17:35Theo Jaffee:Like I saw one state, like you can't be registered as an attorney if you're an AI. Well, of course you can't be registered as an attorney. You can't even sign your name on the license. Like, you know, like you have to have a license to be a lawyer. You have to take a test. You have to do all of this stuff. And the AI doesn't do any of these things, nor can it. Like, it can't register for college. Like, people aren't making, they aren't being coherent because they're just so enamored with, like, getting their point of view and leaving off competition in some way or kneecapping big tech in some way.

18:14Yeah. So if we have like the precautionary principle in mind, what would be the opposite of it? Like what would be a very like responsible, like iterative way to start regulating AI knowing that like your viewpoint is like we don't even know exactly what it's capable of. It's not even like, you know, like hashed out enough as a technology or as a sector to even know what to regulate.

18:37Theo Jaffee:Well, the first thing that's super easy is you can go through all the laws and say like, hey, in this state with this law for this thing, you know, did we make it clear that you can't be an optician if you're not an AI? Like, should we just make sure that AI can't just go give eye tests? Like you can't set up an iPhone in the mall with like a camera and write lens prescriptions for people. Like, okay, maybe you can do that because Ohio didn't word their law correctly and states are responsible for licensing opticians. So there is this step one. Okay, we have a whole new technology. Should we, like, this happened with EVs.

19:23Theo Jaffee:Like, EVs weren't gas combustion engines and they had to adhere to all the safety rules of cars, except they had a whole bunch of different components in them. And all the rules for cars sort of got based on the gas combustion engine. So they need to go back and make sure that all the laws applied if you had a battery-operated car. And so, like, how many cars had front trunks? Not very many. So were there laws about safety and crash zones and all of this that accounted for front trunks? Let's go check it out and make sure we're okay. And so there's a first step, which is there are a lot of laws.

20:00Theo Jaffee:There's two million laws on the books about everything. So do the right ones apply to AI? Like do a bunch of places need to go add and AI to their laws? And maybe that's CSAM. Maybe that's spam. Maybe that's surveillance. Like there's a bunch of stuff to just go do. And maybe today those are wrong. That's like, that should keep everybody busy while we go figure out AI. And of course we have to do this with computers. Like you had to make sure that if you used a computer to do something, that like you couldn't, Like, you know, that all the anti-forgery laws applied if you happen to do output in a computer.

20:38Theo Jaffee:That, you know, I went through getting the legal system to use Microsoft Word. And it turned out there were a whole bunch of features we had to go change in Word just to work correctly in the legal system as it stood. Legal system didn't have to do anything. We had to go and just make sure we worked within the constraints of, like, here's a crazy example. like in the legal system, having footnotes that are longer than a page. So footnotes have like a limit. They can only take up like a third of the page in a legal brief. But if your footnote is longer than that, you have to have like a feature in a word processor that continues the footnote on the next page.

21:15Theo Jaffee:Like we were like, wow, who thought of doing that? And it's no big deal for using a typewriter because you haven't even gotten to typing that page yet. So we're fine. So we had to go do that. So that's like a great step. And that's an idea of like then we'll know what's missing and also while the technology evolves. Right. Yeah, I'm a big believer in like domain experts will sort of know the like in the case of the like opticians, well, it should be like opticians, registered opticians and people who are like have expertise that are sort of like working with the states to along with like some AI experts.