Nick Clegg: Why UK Free Speech is Under Threat; Silicon Valley Needs to Man Up; China Leading the AI Race

0:00There was just this odd culture which seems to have taken root in recent years of very rich, successful men, business leaders in Silicon Valley, who feel terribly sorry for themselves. I slightly feel like saying, just man up, kind of, you know, just grow some. I don't believe that America is going to beat China in this AI race in the way that they appear to imagine they might. I think China is far, far too powerful and technologically gifted and adept. And the technology AI is far too versatile and dispersed to technology to imagine that someone's going to deliver one knockout blow. Let's talk about free speech.

0:40When you see people like Elon Musk say the UK or J.D. Vance say the UK doesn't have free speech, what's your response? Actually, as it happens, I do think that the balance is out of whack here. Welcome to the Master Investor Podcast with me, Wilfred Frost, where we celebrate and learn from the success of the greatest investors, business leaders and politicians in the world, giving you, our listeners, the edge. My guest today was Deputy Prime Minister of the UK from 2010 to 2015, and then President of Global Affairs at Facebook owner Meta from 2018 until earlier this year, essentially rising to be number two to Mark Zuckerberg.

1:29I am delighted to welcome to the Master Investor podcast, Sir Nick Clegg. Sir Nick, a very good afternoon to you. Thanks for joining us. And an author of a new book, How to Save the Internet, which we're going to be talking about throughout the conversation today. And this is just out. Yep, just out this week. Available to buy wherever you get your books. So, Nick, I mentioned that we want to celebrate and learn from the success of the greatest. And you fall into two of our categories there, which is rare. And on this, in particular, we want to celebrate success and learn from it. Do you think that America does that better than the United Kingdom?

2:06Oh, I mean, undoubtedly. I mean, and I think the gap is getting bigger and bigger. I am, as you can imagine, as the Americans would say, I'm a great patriot. I was Deputy Prime Minister of this country. I love this country. I think we have not only an extraordinary history, but a wonderfully sort of creative, slightly ingenious gene. You know, we inhabit this soggy, muddy island floating off the northwest fringes of Europe. So, I mean, and yet we still remain a remarkably creative place, a vibrant place. But I think for a whole bunch of reasons, and it's accelerated in recent years, I worry that it's like sort of it's settled like a dust on the country.

2:49You just feel there's an underlying sullenness and grumpiness about the future. It's as if the country has fallen out of love with the future. I find here, certainly much more than the US, but actually more than some other European countries these days, which is quite striking, that there's a tendency, maybe particularly in the political and media environment, to tear people down and tear ideas down all the time. We're very good as Brits at talking about what we don't like, and the Americans are very good at celebrating. Sometimes we find it as Brits a bit frothy, a bit insincere. But, you know, it kind of has a sort of momentum of its own if you say that you're optimistic and looking forward to doing something, whereas there's a sort of fearfulness about almost every aspect of the future at the moment.

3:45And we've seen this now in various manifestations in politics and elsewhere and in culture. There's this odd tendency for us to be very nostalgic about our, and it's good to be proud of our past. We shouldn't be trapped by our past. And there's a fine line between those two. And do you think, just because you and I moved to America and came back at slightly similar times, do you think it took you to have that move to notice the scale of that difference? Or do you think the gap has got bigger over the last decade? Well, in one sense, the gap, of course, just has got bigger. when I was Deputy Prime Minister, the GDP of Europe, which we were part of, the EU we were part of then, and the US were roughly the same.

4:29I mean, it slightly depends how you slice and dice these stats, you know, currency calculations and so on, but roughly the same. And now the US GDP compared to Europe, I think including Britain is, what is it, 1.5, 1.6, 1.7 times greater. That is a huge difference. And that's partly because of, you know, events. I think we limped out of the 2008 crisis and America bound out of it. We sort of crawled out of the COVID pandemic and they sort of sprung back to life. I mean, the American economy is an extraordinary sort of beast. So I think those are events which have certainly made that difference more clear and more distinct.

5:12There's demographics. We're an aging society. And we, of course, inhabit a hemisphere, a neighborhood, Europe, which is just a much more tricky place to live than in the U.S. has got, what, Canada or Mexico north to the south and two great oceans east and west. And then there's great continent-sized economy. We are a cluttered series of small and medium-sized countries living cheek by jowl next to each other in a pretty dangerous neighborhood. neighborhood. So there are all those differences of geography and of history and demographics and certainly of economics recently, but you're right, as ever.

5:49One experiences this when you go on a holiday. Even if you go on holiday for two or three weeks and you kind of put down the newspapers and don't read the day-to-day news, you always get a slightly different sense of perspective of your own home country. And of course, anyone who's worked or lived or studied abroad will recognize that you do get that sort of clarifying perspective when you're somewhere else. It doesn't mean that I found our life in California an unvarnished sort of joy. There's always good and bad of every place. But I do feel we've got into a bit of a grump. We've sort of got ourselves into a bit of a ditch, really, in terms of sentiment.

6:27And sentiment in business as much as in anything else is so, so important. And once it kind of curdles, it's very, very difficult to kind of reinvigorate it. Well, we'll come towards the end on maybe your advice for the current government to reinvigorate it. Just want to dwell on perhaps some of the negatives you point to on the American business culture. I was two weeks ago anchoring on CNBC with Andrew Roussourkin, and he quoted something, I think it popped up on Twitter whilst we were on air, on X whilst we were on air, that you'd said to The Guardian, if you're accustomed to privilege, equality feels like oppression.

7:01you said of Silicon Valley and David Freeberg of the All In pod then weighed in and it created a little bit of a conversation. What did you mean by that of Silicon Valley culture? I actually think I heard that quote. So I think this was from a print. I hope I sort of said it in a tone, which sort of suggested I didn't come up with that pithy phrase, but I think, but I said it in the context of the following. One of the things I found most striking in Silicon Valley, I still, for the life of me, can't quite understand it. And maybe it's because I come from the rough and tumble world of Westminster where you kind of just need to kind of, you either toughen up or you just get flattened.

7:35But there's this really odd combination in Silicon Valley of lots of very, very rich men. And not all of them, of course, I'm not generalizing about everybody. I have lots of dear friends there and many people I admire. And I'm not directing this at Mark Zuckerberg either. But there was just this odd culture, which seems to have taken root in recent years, of very rich, successful men, business leaders in Silicon Valley, who feel terribly sorry for themselves. They sort of whine about not being liked by the New York Times or not being invited to sort of polite dinner parties. And I found this combination of immense wealth and power and sort of simpering self-pity an incredibly unattractive aspect of the latter-day leadership of some parts of Silicon Valley.

8:24So that's what I was commenting on. So what does that come down to then? Is there some insecurity, do you think, or what? Yeah, I don't. Honestly, I think maybe it's personality types. Maybe it's a craving for acceptance.

8:41I genuinely don't understand it because these same people celebrate the fact that they're disruptive and that they challenge the orthodoxy and that they mess up other people's business models in introducing it. It's like I feel like saying, hey, dude, if that's what you're doing, don't expect everyone's going to throw bouquets of compliments at you because you're a disruptor. So either be a disruptor and then take the flack that comes with that. And by the way, I know this myself from a different – I played a very disruptive role in politics. And people get very, very angry if you disrupt a status quo.

9:15It's sort of the anthropology and psychology of it is the same. And so I don't quite get it. I really, in a weird kind of way, given that a lot of this has been associated with this eruption in this slightly sort of plastic masculinity that you see now in parts of kind of American society and American industry and American politics. You've got the whole bro podcast. I slightly feel like saying, just man up. Kind of, you know, just grow some. If you're going to compete in the jungle of different vested interests that you're disrupting, kind of don't expect people to kind of applaud you every step of the way.

9:56You're inserting yourself into something where you're always going to get reactions. And I found that probably as an ex-politician, I found that, of course, particularly difficult to understand. And again, maybe the British political culture is particularly aggressive, but I just kind of, I found it really, I still to this day don't understand it. It's like, don't do that kind of thing then if you want to be sort of inoffensive to everybody. It's interesting. I mean, you're obviously going through the media here in British politics, I think is pretty brutal. So you've probably had that thicker skin yourself.

10:26Just quickly to round off this part of the discussion, you know, we've seen lots of cabinet meetings with the president and President Trump in version two, administration two, and quite a level of praise and sycophancy from cabinet members. Last week, I don't know if you saw, Thursday night, there was a dinner in the White House and the same thing happened, went around the room. Yeah, there's Tim Cook, Satya Nadella, Bill Gates, Sam Altman, Mark Zuckerberg. Again, it was pretty extreme, the praise. I mean, how does that sit with you? Look, I'm a sort of old-fashioned Gladstonian liberal. I kind of feel there is a sort of division of labor in a successful, vibrant, capitalist economy where, of course, politicians and particularly prominent business people should have, be able to sort of, you know, converse with each other.

11:19But I always say there's only one thing which is worse than having businesses and politicians at each other's throats in a dynamic economy. It's having them in each other's pockets. And the odd thing I find is that what seems to be uniting all these people, and I'm not directing any of them individually, because clearly some Some of them, like Sergey Brin and others who were there, were lifelong progressive Democrats. So they've all clearly, as a group, and that's very Silicon Valley. Again, they kind of like to think they're all terribly striking out on their own, but there's quite a herd-like behavior.

11:53They've clearly all calculated this is in the best interest of their business, and they're perfectly entitled to do that. What I find interesting as an interested bystander now or observer is what appears to unite a lot of that discussion around that dinner table is this ardent wish to beat China in the race for AI. And I think that was ostensibly part of the sort of discussion. It's about AI and American leadership in AI. but of course in having this ever close relationship between the political power and commercial power oddly enough they behave in a way that is actually much more akin to Chinese behaviour patterns where the traditional accusation has been that Chinese businesses take their steer and take their cue too much from a political power and it's going to be interesting to see how this pans out because I don't believe that America is going to beat China in this AI race in the way that they appear to imagine they might.

12:54And you saw it at that dinner table. How much money are you going to spend? Wow, that's a big number. How much are you going to spend? That's a big number. It's almost as if it's a tacit assumption that America can beat China in AI in the way that it outspent the Soviet Union in the Cold War. And there's going to be a Berlin Wall moment. And then suddenly someone in Silicon Valley is going to say, Eureka, in the middle of the night, I've got AGI, I've got super intelligence. We can now keep this under lock and key and dictate terms to the rest of the world. I think China is far, far too powerful and technologically gifted and adept to be sort of treated like that.

13:29And the technology AI is far too versatile and dispersed to technology to imagine that someone's going to deliver one knockout blow. So at some point, it seems to me, both Silicon Valley and the powers that be in DC are going to have to rethink this very belligerent America first approach where they kind of just, you know, they beat their collective chest and say we're bigger and better than everybody else. They are bigger and better in many respects, but they're not going to win like that. In the end, they're going to have to rediscover some old fashioned skills like actually working in partnership with some of their partners rather than just slapping sky high tariffs and insulting them.

14:06Well, let's dwell on AI then just a little bit since you brought it up. Because A, very interesting to hear the threat from China as significant as it is in your eyes. What about this pace of spending in the US? I mean, I'm really interested in if we focus on meta. I think it's fair to say that Mark Zuckerberg has form in overspending on a new idea, the metaverse. you know very clear example of that in the last six months maybe 12 but certainly the last six months since you left the spending on ai has been extraordinary do you think he's overspending so one of the one of the reasons why mark zuckerberg is such a remarkable i mean you can say what you like about him and many people do for and against but um just setting aside your views about social media and so on why he is such an exceptional business leader i mean he's more or less single-handedly built this, whatever is it now, trillion and a half dollar company and so on, the largest social media operator in history, is because he is not afraid of making very big swings.

15:11And what he tends to do, which I've always liked about him, is he doesn't sort of deal in half measures. When he makes a bet, he makes a very big bet. And he kind of, I think he's highly competitive and he kind of feels there's no point in doing things in half measures if you're going to compete against a lot of other very, very gifted and accomplished companies. You've got to go all in. So that's kind of, that's the way he's always done it. And it's why he makes these big bets. I remember when he bought Instagram and WhatsApp, he was mocked for it. You paid way too much. Actually turned out to be an extraordinarily prescient acquisition.

15:45And you're sure people now cast aspersions on the metaverse. I actually started thinking that the long run, that bet's going to pay off because I think we will eventually migrate from phones we hold in our hands to some kind of interface that we put on the bridge of our nose. But setting all that aside, so I think it's very much in keeping with his, the way he competes, the decisions he makes. For what it's worth, look, you need to get many other people who are AI data scientists and others on your program to give you a fuller answer to this. I remain a little skeptical about some of the hype around AGI or superintelligence and so on.

16:27Just because I think if you look at the trends, remember even six, eight months ago, we were told that GPT-5 would be the moment we walk through the looking glass. That would be the moment suddenly we would be inhabiting another universe. It's a great incremental improvement on GPT-4, but it's an incremental improvement. So maybe we're not just in a world of ever more exponential increases in capability and versatility for this technology. Maybe now all of these big hyperscalers are in a world of just squeezing more out of the same fundamental technological sort of LLM-based paradigm. And if that's the case, you know, you're going to have to ask yourself some very big questions about whether in the long term you're going to do this technology in and of itself is going to generate such substantially increased revenues that it makes up for the huge capex investment now uh look i think as far as meta is concerned meta has just this it's just this extraordinary you know it's just this extraordinary core business of the advertising the ad business and as long as that just carries on churning away as powerfully as it does it's got money um to to burn but at some point at some point all of these big companies and then some of them are starting to generate some revenue from their products, either B2B or the whole API-based approach from Anthropic and OpenAI and so on, generate some revenue.

17:55But you're hard-pushed to claim now that it's enough to recoup. I suspect a lot of them, and I suspect if Mark Zuckerberg was on this sofa, I'm not sure if he put it like this, but I think they probably kind of think they just have to spend all that money because their competitors are doing anyway. An interesting snapshot, I think, to summarize what you think on this. Since you've left, not in absolute terms, but relatively of the holding you had in Metastock, have you sold some of it? Oh, no, I sold it all. I don't hold any Metastock at all. Because of a principle or because it was overvalued?

18:30No, I was sort of, I'm not really, I don't sort of think that. I thought, I did extremely well, of course, because as you can imagine, senior executives in Silicon Valley, you're remunerated principally through, you know, these layered stock options or units. And I thought, well, I've done so well, you know, I'll probably now time to try and, you know, do other things. It was just a sort of, I've had a great ride and I probably didn't want to overdo my luck. And it felt, I also, which is interesting. I also feel on a sort of personal level, I am, you know, I had such an interesting time at Facebook, then, then met forever in the debt to people like Sheryl Sandberg and Mark Zuckerberg.

19:10Really proud of the work that I did then. But I just, I'd be very lucky. I've had sort of two or three very distinct chapters in my career. I spent 10 years in Brussels. I spent 12 years in Westminster. I spent seven years or almost seven years in Silicon Valley. I have found, I'm now 58, it's generally, at least it suits me better. Just when you move from one to the other, just move, just turn the page. Don't sort of cling on to stuff too much. Just, you know, I never did that with politics either. I never wanted to hang around in the penumbra of politics. So it suited me to do it like that as well.

19:42And there's earlier books to capture those chapters, as well as the new one of How to Save the Internet.

19:52Let's talk about free speech. When you see people like Elon Musk say, the UK, or J.D. Vance say, the UK doesn't have free speech, what's your response? Well, I have a sort of, I have two very strong reactions which point to slightly opposite directions. On the one hand, I feel like saying to them, just butt out. Just butt out. Just like, we're not sitting around pontificating about what, about, you know, the excesses of American politics and all the imbalances of them. And by golly, there are plenty. Certainly, I think government ministers generally don't do that. And also there's just this shocking double standard.

20:36You know, the way in which the new U.S. administration is quite actively and deliberately in a way that I think certainly goes against the spirit. can argue or not whether it goes against the letter, but certainly go against the spirit of First Amendment free expression in the US in the way that they cow and bully and seek to intimidate any countervailing or critical voices from both business and politics, I think, is a shocking example of double standards. Having said all of that, actually, as it happens, I do think that the balance is out of whack here. I read, I think, in The Economist some weeks ago that the police are now arresting, I think, around 30 people per, or making 30 arrests per day related to online speech offences, and that those arrests are often made based on statute that was passed certainly well before AI and possibly well before the internet fully flourished.

21:34And I certainly, when I've looked in some of the examples, I thought to myself, yeah, that's really unpleasant speech or egregious speech, but really surely a kind of a part of the definition of being in a free society is that people say ghastly things, offensive things, awful things, ugly things, and we don't sweep them under the carpet. So I, yeah, so on the one hand, I think there is a bit of a point. And I do think we need to think long and hard on this side of the pond about whether we've overdone it. I think we have. I certainly think the way these sort of almost pre-digital statutes are being applied.

22:13But conversely, I kind of also feel that the last people we need lectures from on open, you know, open discourse and debate is from this administration in DC. Well, and that's then, I think you're pointing that perhaps directly to J.D. Vance. But I'm fascinated by that answer. And I guess to put it all together... you know, you were pretty central in the decision to take Donald Trump off Facebook. He was obviously taken off Twitter as it was then for a much more extended period of time, perhaps without the same formal process that you did at least go through. Do you have to also look at Elon Musk and commend him for buying X and changing the whole tone towards that sort of area?

22:59I mean, there's a lot of nuance there. It's a lot of nuance, but it's a very good question. And I think you are right to sort of put your finger on this huge sort of pendulum swing where, I mean, I'm sure there are other ways to describe it, where the perception was that sort of uber-progressive, sort of woke-like approach to speech just became excessive. and there's certainly a very strong sentiment, as you know, on the right in American politics that the big Silicon Valley companies went overboard in prescribing speech. And they allege, much less evidence of this, but they allege that under government pressure at the time, that too much speech was proscribed during the period of the pandemic and the lockdown and so on.

23:47And I think there is a lot of validity to both assertions. I remember actually, oddly enough, when I arrived in late 2018, Miriam and I with our kids in Northern California, I felt more constrained about what I could say than any time in my adult life. I remember sort of saying a couple of jokes, which I thought were rather innocent and they were clearly deemed to be slightly risque or off color or something. I made a sort of mental note. I just shouldn't indulge him. What were the jokes? I can't remember, but no, I can't remember. That's not really the point. The point was I remember there was a sort of humorless earnestness at that time about speech.

24:21and you really felt you were sort of treading on eggshells. I think that is true. I also, and I've said this publicly and I've given evidence in Congress and so on, I think with hindsight, sure, with perfect hindsight vision, the panic that everybody felt when this virus was killing people on quite a large scale, there wasn't a vaccine yet. The world had never dealt with it before. There's no wonder that people went, ah, maybe we shouldn't have this content circulating or that content circulating away until we know how to handle this. So I think all of that is arguably, it is true and it was inevitable and perhaps in the long run, a healthy thing, that there was a reaction to that.

25:03The problem as ever in culture and politics and in society generally is that the reaction ends up almost throwing the baby out with the bathwater and then you get this sort of almost ludicrous cardboard cutout of sort of slightly kind of unthinking libertarian idea of free expression where there should be no constraint at all. And then it gets worse, of course, when in the hands of people like Musk, you actually realize on examination, it's a bit of a one-eyed view of free expression. It's kind of free expression for stuff that he likes and not free expression about stuff that he doesn't like, particularly when he starts or appears to start handpicking content if it impinges on his reputation or his business.

25:41So I think these big, I think that it's too early almost to write the history of this. My hope is, my hope is that over time, kind of we settle down and accept as we have generally accepted in in civilized society that there are certain things particularly which forms of speech which particularly incentivize or or threaten real world imminent harm which you know that there is a legitimate say to say legitimate basis on which you say that kind of speech is not permitted but i think at the moment we're still too much in the throes of the backlash to the original backlash if you see what i mean But what's really interesting, put aside the individuals and who's making the argument, if someone says we don't have full free speech in the UK right now, it can't be labeled as a crazy right-wing thing to say.

26:29No, I don't. And I think it's, well, look, I'm a liberal. I come from that sort of Gladstone tradition of liberalism. And I think I'm never going to concede to anyone a greater sort of philosophical belief in the value of free expression. And that speech is, I've always said, and I personally feel that over the last, what is it, 10, 15 years on both sides of the Atlantic, but most prominently in the United States, progressives have completely lost the sort of North Star on free expression. Free expression used to be a progressive thing. The civil rights movement and others used to defend, it was the famous thing, the march through Cokie, when the civil rights organization defended the rights of the Ku Klux Klan, I think it was, to demonstrate.

27:19This was right back in the 70s.