Big Technology Podcast - Condoleezza Rice: U.S. Tech at Risk Amid University Cuts, China Threat

Episode Date: July 16, 2025

Condoleezza Rice is a former U.S. Secretary of State and current director of Stanford’s Hoover Institution. Rice joins Big Technology to discuss whether the United States can hold its technological ...edge as China races ahead in AI, batteries, and advanced manufacturing. Tune in to hear her candid take on the U.S.–China tech arms race, the ripple effects of chip export controls, and why she believes democracies are safer stewards of frontier technologies. We also cover the squeeze on university research funding, immigration-driven talent pipelines, and tuition-fueled class divides. Hit play for a data-rich, no-fluff conversation on the special sauce for the U.S. tech industry and the risks it faces in our current political environment. Learn more about the Hoover Technology Policy Accelerator here: https://www.hoover.org/research-teams/technology-policy-accelerator --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology on Substack + Discord? Here’s 25% off for the first year: https://www.bigtechnology.com/subscribe?coupon=0843016b Questions? Feedback? Write to: bigtechnologypodcast@gmail.com

Transcript
Discussion (0)
Starting point is 00:00:00 As the United States at risk of losing its technological edge, as it cracks down on university research funding, pushes away international students, and falls behind China in some key disciplines. Let's talk about it with former Secretary of State and Hoover Institution Director Condoleezza Rice, who's here with us in studio at Stanford today. Secretary Rice, welcome to the show. It's a pleasure to be with you. So we find ourselves in an interesting moment right now. The U.S. has long been viewed as the leader in technology, but you look at China.
Starting point is 00:00:33 They're the leader in battery technology, the leader in EVs. You can make an argument that they're leading in humanoid robots, and they just came for RAI industry with Deepseek. So is the U.S. in danger of losing its lead to China right now? This is actually a really interesting story because I think we're seeing a pattern here. The United States will lead in innovation, lead in discovery, and then somehow we manage. to lose that edge. So battery technology is an excellent example. We actually invented battery technology, and somehow now we've lost the lead. So I'm very interested in why this keeps happening. You know, some of it may be that the innovations are not ready for the market. They don't have a
Starting point is 00:01:18 commercial value, and so they sort of faded to the background. They get picked up because we're very open about our innovation and our research. You can read it anywhere. And so China has done very well, taking American discovery and innovation and then creating a market for it. So it's something we have to be very careful about because when you come to AI, and I know we'll talk more about this, you're talking about what my friend Faye Faye Lee calls us civilizational technology. And that would be very different than losing the lead in, say, battery technology. So you're on to something. Something does happen that we discover, innovate, and then we lose the lead. Now I think a lot of people will take issue with my first question. They'll be like the U.S. is not in the lead or who cares? And it's not important. The U.S. can develop technology. China can develop technology. So why do you think it's important the U.S. days in the lead? And what are the consequences if it falls behind? Well, we're in an arms race in technology because there are many things about the U.S.-China relationship that are not adversarial. They are the two largest economies. We are going to have to find a way to trade together. But in security,
Starting point is 00:02:26 policy, we are adversaries. And I would say that's largely a decision that Beijing made. So as a result, the technology race is also adversarial at the high end. You know, I think one of the really kind of silliest statements that I made, or maybe I would say kind of a dumb speech, if you will, is when Xi Jinping said that they were going to surpass the United States in frontier technologies like AI and quantum. And he gave a date within essentially 10 years. So what did he think was going to happen? We were going to get our backs up. We were going to start to think of it as an adversarial race.
Starting point is 00:03:03 And I am one who believes that if somebody's going to win the race on these frontier technologies, it had better be a democracy. Because if something goes wrong in AI, and it's quite possible that something will, as a matter of fact, it's probable that something will. Maybe it's even predictable that something will. We will have investigative reporting. you'll probably be doing it on your show. We'll have congressional hearings. The Chinese will do what they did with COVID. They'll hide it. They'll lie about it. And so an open society that develops these foundational technologies, these transformational technologies, I believe it's simply safer for humankind. Okay, but the Chinese are open sourcing their models and our labs are closed. Well, our labs are closed for commercial purposes. But I think when you look at the amount of work that is done at the frontiers of these technologies in universities, we published just about everything openly. And as you know, many people saw Deep Seek coming because they were reading the literature. They were reading the open source literature. I'll tell you an interesting fact, not a single AI specialist computer scientist that I know was. surprised by Deepseek. Really? And every national security expert that I know was surprised by
Starting point is 00:04:25 Deepseek. So that just shows that if you are following the research and you're following the research papers, maybe you'd know a little bit more than if you're a national security type. Right. And speaking of research papers, I mean, it is the open transformer paper that came out of Google, which by the way founded by people who went to Stanford. We're here in Stanford. That's what led to the beginning of this generative AI moment. So I want to ask you, what do you do? If you are determined to stay on top, what do you do? And I think that a lot of people have been talking about you've got to stop the exports of chips to China, the chips that these AI innovations are built on top of. And it's so interesting because we're in Silicon Valley,
Starting point is 00:05:06 but it's a misnomer. It really should be called Silicon Design Valley, because where the silicon is made is in Taiwan. And if you put restrictions on China from taking this core material being made And in Taiwan, I think the U.S. even believes Taiwan is or says Taiwan is part of China and says, you can't use these chips. You don't think that China is going to go invade Taiwan to get them? Well, let me unpack that for a moment because I think there are several important points there. The first is that you asked how do we win or how do we deal with the fact that China is we run harder and faster. That's how we do it. And we get out of our own way. I'll give you just one example, was talking to some people in the administration, the Trump administration, who tried to get a preemption on states having their own laws about AI, their own restrictions on AI. Can you imagine if you're a young AI company and you've got restrictions in Delaware and Texas and California and they're all different? So we have to be careful that we
Starting point is 00:06:12 don't just get in our own way and we have to continue to innovate and innovate quickly. I'm a national security type, so I continue to believe in restrictions of some kind, and I continue to believe that export controls can have a purpose in slowing what the Chinese can do. We know that the Nvidia chip, which was prohibited for sale in China, it probably slowed it. But we would be on a fool's errand if we think it's going to eliminate the ability of the Chinese to do these things. If we were going to stop Chinese indigenous development, we would have had to do that 10, 15 years ago before they really did develop the ability to innovate indigenously. But the first thing is get out of your own way and run fast and run hard. And secondly, when you speak of Taiwan, yes, it is a remarkable fact that this extremely important industry, which we founded, has ended up in a place.
Starting point is 00:07:14 that is vulnerable to China, because China continues to believe that Taiwan is a rogue breakaway state of China. They want to reintegrate it. And Xi Jinping in particular is someone who has staked his entire historical claim, his personal historical claim, his place, if you will, next to Mao in the pantheon of Chinese leaders, on what he's called the restoration of China or ending the humiliation of China and putting back together those parts of China that were taken away by imperial powers. The last piece of that, really, from his point of view, is Taiwan.
Starting point is 00:07:57 If you look at what they've done in Hong Kong, Hong Kong, which used to be, you may remember, it was one country, two systems, and Hong Kong was going to have all of these freedoms. Well, all of that has been wiped away in Hong Kong. And Hong Kong is now really just another province of China, except for some economic freedoms which benefit Beijing. But the politics is controlled by Beijing.
Starting point is 00:08:20 The security is controlled by Beijing. That's what they have in mind, I think, for Taiwan. Not an all-out invasion of Taiwan. An invasion of Taiwan would be like D-Day times 100. And I'm not sure that Xi Jinping really trusts his armed forces. You might notice that he keeps demoting generals. Generals keep kind of disappearing in the Chinese. hierarchy. And so I'm pretty sure he doesn't really trust his military. But you don't have to
Starting point is 00:08:48 invade Taiwan if you're the Chinese. What do you do? You use cyber attacks. You cut underwater sea cables. You do what the Chinese are currently doing very, very often. Militaries would call them denial exercises. So you look as if you're going to quarantine Taiwan so that it can't trade. Nothing can get in, nothing can get out. And Admiral Paparo, who is our chief in the Pacific, has said, it's not an exercise, he said, it's a rehearsal. So that's what we have to be careful about. And from the Chinese point of view, that's more effective because when would we react? So let's talk about the first part of your answer before we got to export controls where the U.S. will need to outwork the rest of the world.
Starting point is 00:09:40 If you look at China, there is an intense work ethic. They have regulations. They have steep regulations. They have taken big tech CEOs like Jack Ma and effectively disappeared him for chunks of time. And still, they've been able to push forward with some of the innovations that I mentioned at the beginning of our conversation. So what is happening in China from a work ethic perspective or what cultural values do you think they have or policies do they have that we can learn from. here in the U.S. Well, I'm glad you said policies, because I'm actually not much for cultural explanations. I've seen cultural explanations. These people have to work in a particular way.
Starting point is 00:10:20 I usually find those explanations don't work. What does work is do you set up an ecosystem in which the incentives are such that you get the right output from your economy or from your workers? And there, I'll say that it's been up and down in China. You mentioned what happened. to Alibaba and Jack Ma, what happened to Tencent. China once led the world in online education startups. They shut all of it down. Why? Because the Communist Party, like all authoritarians, cannot tolerate the idea of alternative sources of power. And Jack Maugh was showing up in Davos a little too much, and he was getting a little too popular. And so I think there are inherent weaknesses in an authoritarian system. First of all, they try to do everything from
Starting point is 00:11:12 the top down. We have the advantage of distributed innovation. You mentioned three, four companies that are trying to press the front edges. We're always going to have a more distributed approach to innovation and to research, and I think that's a very good thing, and that's how we'll continue to lead. But we shouldn't underestimate that when it comes to not just just copying. But kind of that next iteration from something maybe we've invented and then you iterate just the next step, that China will be very good at that. But I think authoritarian systems, top-down systems have their own marks, seeds of their own destruction. I mean, we'll see what the results look like. But I think in history, that's proven correct.
Starting point is 00:12:02 You know, we can go back in history. We were very worried about something called Sputnik. at one point. The Soviet Union did beat us into space, but ultimately the nature of that system, we sprinted ahead. But that sparked a rush toward innovation in the United States. And you know, we're here in Stanford, you know as well as anybody that a large part of the root of our rush to innovation comes from the university system. Right now, the university system is under attack, especially research institutions. I'm going to read you some numbers. The Trump administration has frozen 2.2 billion in grants to Harvard. They have frozen a billion in funding to Cornell, 790 million to Northwestern. They're looking at Johns Hopkins, 3.3 billion. The
Starting point is 00:12:50 list goes on. Are we putting our ability to innovate at risk if we kneecap this important part of the source of our ability to invent? Let me be the first to say universities have in some ways been their own worst enemy in a number of ways. I don't think universities reacted particularly well after October 7th. A lot of things happened on campuses that should never have happened. I also think that when it comes to freedom of speech and freedom of expression, universities weren't the paragon that we should have been for civic discourse around difference. So let me start there. I just have to lay that groundwork. I totally hear you and we'll talk about because I want to get to the Trump rationale.
Starting point is 00:13:36 Yeah. But I'm not going to ask you to comment on Harvard in particular, but the leading tuberculosis researcher there had received an order from the federal government to halt her research. So if you think about what's happening across universities, is that the solution? That's exactly my point, which is that even if universities have made these mistakes and they have, we have to be very careful that we're not endangering something that is of high value to the United States. I would say irreplaceable value. You know, 80 years ago, we basically made the decision with Vannevar Bush's important white paper on this,
Starting point is 00:14:12 that we were going to make universities, the ecosystem, the infrastructure for fundamental research. And it was a really kind of brilliant idea. You would have the Defense Department and the Energy Department and the National Institutes of Health and the National Science Foundation, which would come later, to fund fundamental. research in universities, which were kind of cheap, actually. Labor wasn't that expensive. And you would get two kinds of innovation from that, two kinds of breakthroughs. Some were commercializable and commercializable fairly quickly. And we saw companies come out of that. And some would have to wait a while until they prove their value. Now, you could say in the first
Starting point is 00:14:58 case, maybe industry would be prepared to do that kind of work. But think, about how long it took for work on neural networks to actually become the AI revolution that we're now seeing because it took the link between the research that started in the 40s and the 50s on neural networks, then the GPUs to be able to do it. And now you have this revolution in AI. And so sometimes you have to wait. And commercial entities can't wait. And so having the fundamental research in universities absolutely critical. And my concern is we don't have a plan B. If it's not going to be done in universities, where is it going to be done?
Starting point is 00:15:42 At one point it was done in Bell Labs. But when Bell Labs became a cost center for AT&T after the breakup of the baby Bells, Bell Labs went under and most of those people fled to universities where they won multiple no bells. So I really hope as we're looking at all the questions, around higher education, that it will be recognized that fundamental research, scientific research, medical research, really the universities are the answer. I'd ask most people, when you have some exotic disease, don't you try to get to a university-led hospital to take care of it? Because that's the front foot for American biomedical research. And you could go on and on.
Starting point is 00:16:26 You know, the founding really here of what became recombinant DNA, the discovery of stem cells, and Google out of here, Hewlett-Packard out of here. Stanford's done okay. Stanford's done okay, and it's not just Stanford. I could give that list for most of the research universities in the country, and not just the ivies. But I'm from Birmingham, Alabama. The University of Alabama, Birmingham, is an amazing biomedical research center. Purdue is an amazing engineering center. So it's dotted throughout the country as well.
Starting point is 00:17:07 Right. I mean, there's a great article by Jonathan Cole, who's the former provost and dean of faculties at Columbia. Just list the innovations we've gotten out of universities. I'm going to read them just because it's worth reading. Lasers, FM radio, barcodes, Google algorithm, the invention of the computer and the iPhone, cures for childhood leukemia, the Papsmere, CRISPR, the electric toothbrush, Gatorade, the Heimlich maneuver, and Viagra. Apparently, he felt necessary to list that. But that is a track record of everything that, many of the things that you think coming out of the United States.
Starting point is 00:17:42 It happens in universities. It does. And there's another piece to it, of course. we train the next generation as well in PhDs that come through these universities and then go on to become faculty or go into industry. A lot of them actually go into industry from the PhD programs. And so these research universities are really a kind of gold standard internationally. It really has set the United States apart in terms of the way that we do this. In continental Europe, they teach in one place and they do research in another.
Starting point is 00:18:22 At a place like Stanford or any of these universities, you can walk across campus and you've got the really brilliant young 18-year-old and you've got the Nobel laureate in the same body. It's really something we have to protect. Going back from China, going back to China, this is still Cole. In the past quarter of century, investments by China and higher education have become similar to those in the United States and has increased the building of new research oriented. universities to compete with us in STEM fields. It seems like the rest of the world is catching on to the U.S. secret sauce. You're seeing the investment in China. And of course, as we're having restrictions of people to be able to do their research in the United States, Europe has extended the hand and said, come do it here. I still think we'll win on the battle for talent.
Starting point is 00:19:09 If we don't say to people you aren't welcome, they're going to find the place that it's best to do this because these researchers are driven by a sense of mission to do their work at the highest levels. And it's still the case that you do the work at the highest levels in the United States. But yes, too long of sending talent or rejecting talent and having it go other places will really pay the price. I'll also say that I'm a big believer in controlling your borders. I'm a big believer in that we've made a lot of mistakes over the last few years. in losing control, particularly the southern border, and I want to see that remedy. I hope that when it comes to bringing talent to the United States, we will recognize that
Starting point is 00:19:55 we don't train enough engineers. We really need H-1B visas to get people to come here. If you look at the number of founders of these high-tech companies, awful lot of immigrants in that group. So we do have a kind of secret sauce, and maybe it needs a little additional adjusting here and there. But let's remember what's gotten as to where we are. Okay, I'm going to get to some of the numbers that we're seeing with international students in a moment because it's not pretty, and we should discuss it in more depth. But let me ask you, why do you think this is happening? I'm going to give the Trump administration's rationale in a moment. But just from a philosophical level, how do you get to the point where you start to see university funding as
Starting point is 00:20:39 something you can pause? It's almost as if you haven't seen enough or you're too detached. from their innovations to think that it's something that you might want to stop. I've been a university professor for more than 40 years, right? They hired me when I was 11. I just want that to be understood by your audience. But I think universities have become detached from society and from reality as well. And so it's not just, it goes a little bit both ways. What do I mean by that?
Starting point is 00:21:11 clearly we haven't made the case very well for what we do. Maybe it's that people take for granted some of the innovations that have come out of universities, but if you walked and asked even a very highly educated member of the attentive public about how the research system that we just described worked, they probably wouldn't know. So maybe we shouldn't take that for granted anymore. Maybe we should make it clear why this is happening. Secondly, I do think that universities and elites sometimes have looked down on people who, quote, weren't their own kind. I do think that the stories that come out about the running down of American values, American institutions, America is too racist, Americas, people get tired of that. And they don't
Starting point is 00:22:04 like the attack on their country, and they don't like the attack on their culture. And unfortunately, it's become a little bit associated. It's become a lot associated with elite universities. So I would say to us, let's look in the mirror a little bit too. Well, I'm glad you brought that up because one of the things that I really struggled with before applying a university or applying to college was the cost. And I came out tens of thousands in debt. And I was lucky. And if you look at the costs of what it takes to go to university today, it's out of control. So in the 60s, this is according to the National Center for education statistics, 12,000 a year for a private four-year college. Now it's 35,000. So you could come
Starting point is 00:22:45 out maybe with 40, and this is in today's dollars. So coming out with like 30,000, 40,000 in debt, manageable. Coming out with 100 or 200,000 after the interest is not manageable. In fact, we're actually capping the amount of money people can take out for a loan. I think that just changes the composition of the university, and it changes the composition of the elite. The elite becomes solidified. It's the same people coming from the same rich families that never have any contact with people who are in a different social class from them. And as much as we're, you know, dividing in our country based off of any number of characteristics, we're falling apart because we don't speak to each other in terms of class. So how can we fix that? Well, I agree with you. I never thought,
Starting point is 00:23:35 I used to study the Soviet Union in class conflict. I never thought I would see what I think is kind of class conflict or class division in the United States. And I will say that universities that are well endowed have made an effort to use that endowment to make it possible on what's called needblind. You apply, and if you're good enough to get in, we'll find you a way to go to school. And so some 20% or so of the student population in a place like Stanford's first gen. So these are kids whose parents, nobody else went to college. And I've always said when I can stand in front of a class, and one child is the child of an itinerate farmer, and the other is the child of a fourth generation legatee.
Starting point is 00:24:24 I feel pretty good about what universities are doing. But it's not just that they are expensive, and I'll come back to why they're expensive. I was provost of Stanford. I was the budget officer. I understand why it's expensive. But I will say, not every kid should go to college because many of them don't want to go to college. They would be just as well with a... It's not that everybody needs to go, but it's unavailable for a large part of the population.
Starting point is 00:24:50 But if you want to go to college, you ought to have the ability to go. And that's why I think financial aid and making it possible is so important. But if you're going to take down tens of thousands of dollars in debt and you would have done just as well with a two-year degree and a skill, then maybe we ought to start to value people who work with their hands. You've heard a lot about how we need shipbuilding, we need manufacturing back in the United States. We don't even have the skills. We don't have the welders and the electricians to do that. Why don't we value those people as much too? And that's part of that class division that we're seeing.
Starting point is 00:25:28 made it by ChatsyPT, so we might be on that way. But a lot of white-collar people are going to get automated. They might be there. They just have to be trained for them. But I wanted to make one other point about the divisions. We don't know each other very well anymore. And I have been wondering about ways to remedy that. When the election took place in 2016 and Donald Trump won, I actually had colleagues who said,
Starting point is 00:25:53 you know, maybe I should travel and see what those people in Alabama think. And I thought, you know, if you have. have to do an anthropological dig on your fellow citizens. We have a problem. It was a weird cliche. It was a weird cliche, really bizarre reaction. So the military used to be a place that people went from a lot of different backgrounds. Now that really isn't true. I'm a fan and a believer in national service, even if it's voluntary national service. It doesn't have to be the military. It could be the Peace Corps. It could be any number of efforts. I like Teach for America because I have some kid who's from Pacific Heights who's going to go
Starting point is 00:26:34 work in the Mississippi Delta. We just do need ways to get to know each other better. We've lost that as a country. And no democracy can ultimately survive and prosper with those kinds of divisions. And finally, the educational system is reinforcing class differences because I can look at your zip code and tell whether you're going to get a good education. Right. That's a real problem. That's a real problem. And so whether it's by giving parents choices through school choice and vouchers or improving public schools, we'd better pay attention.
Starting point is 00:27:14 Yeah, the Trump argument, this New York Times captures it, they turned, the universities turned into bastions of leftism, hostile to conservative thought and lost the trust of the American people. Elements of that might be true. But again, if you're only going to admit a selection of the population, you're going to get uniform thinking. And I thought if you're going to think about withholding federal funding, maybe it's not research, maybe it's other forms of federal funding, require the universities to not increase their tuition, not increase their fees more than inflation. Why can't, why is that so hard? Well, as a budget officer, I would have loved to not increase tuition. And I think actually tuition increases moderated for quite a long period of time. But do you know why it's expensive to run a university like this?
Starting point is 00:27:59 I actually have an idea. Yeah. I mean, you're not going to give the same answer as I am. But I think that we have had an increasing runaway bureaucracy that is running universities. We pay so much money to people who are, excuse me, but pushing paper and not teaching and, you know, other amenities because there's this sort of arms race between schools to offer things. And then you end up looking at a tuition bill that's out of control. Well, that's part of the story. And I'm a big believer that you need to cut administrative bloat. But let me, you know, when I get a federal grant, for instance, do you know what the reporting requirements are like on a federal grant? That's why the administration is. And that's why administration goes through. So I would trade the federal government 11 points on what's called the indirect cost recovery. In other words, the overhead that the government pays. I trade 11 points if you don't make me report to the degree that you do. And another problem is. students expect a lot these days. So when I first became Provost, we had, we're called internet cafes. So you sat down in the basement and everybody could use the, do you know what
Starting point is 00:29:05 a kid would think today if they walked into a dorm room and there wasn't access for their computer? So the cost have gone up, expectations have gone up, but I'd be the first to say universities need to control costs. Yeah, it's called learned helplessness, right? You teach them that this is what they should expect and they can't do anything else. And And, you know, let's just go back to the consequences here because assuming that the funding does, you know, get withheld for a long term, we could see, again, a harm in our ability to innovate. And the innovations coming out of China that I read in the beginning of this conversation were before any of this happened. Is it surprising to you that it's Republicans who are traditionally pro-business are seeding what could be the roots of a decline in business? because they're kneecapping the university?
Starting point is 00:29:55 Well, I think a couple of things are happening. People, some people are angry about the kinds of things we've been talking about. And so, and universities become then a kind of easy mark because they have made some mistakes. I also think that, again, there's something of an educational mission here to really draw the line from that funding, that federal funding for university research to where we are as a country in terms of innovation. When I go to the hill to talk to people, there are certainly any number of senators and congresspeople who understand that. And they are trying to hold the line. You know, people are also looking for money in these budgets to be really clear about it. So some of the cuts
Starting point is 00:30:41 are coming because people are just looking for money because you can't cut entitlements so you find these smaller ways to do it. But I've been a voice for we really, really have to re-center ourselves on how important the innovations that came out of a very smart, specific system that we created 80 years ago. And I just want to repeat, we don't have a plan B. So we really do have to make sure that we're adequately funding federal research. And it's not, by the way, just biomedical or engineering or what happens here in the Valley, but a lot of defense capability is going to be dependent on what we do in terms of innovation as well. Right. And you think that if anyone would know that, it would be folks in tech. And I think it is notable that
Starting point is 00:31:28 you're making these points on a technology podcast. I'm doing that because I really want to speak to that community. We've done something at the Hoover Institution along with Stanford. It's called Stanford Emerging Technology Review. And the whole purpose of it, I co-chaired with the Dean of Engineering at Stanford, Jennifer Whittam. And the idea is that we need to help policy makers understand what's coming on the horizon in terms of frontier technologies. But in order to do that, we have to have the scientists who are really in the labs at the bench to help us understand these technologies. And then they need people like us who understand policy and institutions to help those institutions understand what those technologies are doing, what the
Starting point is 00:32:16 challenges are, what the upsides are, what the downsides are. And that's what we're trying to do. So that's why I'm on your podcast. In addition to the fact that a lot of people like your podcast. Yeah, we cater to a larger audience than Just Tech. Just Tech. So of the people in the tech world that supported the president and have been behind his agenda up until recently was Elon Musk. Can Elon Musk's third party work? Oh, I don't know.
Starting point is 00:32:44 I'm a specialist on international politics, not American politics. And I always remind people that. And you were the Secretary of State. Yeah, but that does international politics, remember. A lot easier to figure out that. I am a great fan of great entrepreneurs and people who have pushed the envelope. We have a lot of them here, including Elon Musk. Politics is a strange business, and it doesn't look like.
Starting point is 00:33:14 It doesn't actually look like industry. It doesn't actually look like business. It doesn't innovate very quickly at all. And sometimes there's a little bit of a class. between the valley and the way that the valley thinks about things and the way that Washington thinks about things. We do what we call these programs where we bring together the tech people and government people, and we try to help them speak the same language. How's that going?
Starting point is 00:33:47 You know, we're getting people who speak the same language a little bit, but it just shows that what you can do in the Valley, what you can do in business, you can't always do in the political realm. The political realm, the government has functions that businesses don't have, has many, many, many more veto groups and many, many more constituencies that have to be taken account of. My solution to a lot of our problems in Washington is to look to where the founding fathers looked, which is not to Washington, but what's happening in the states and the localities because there you really do get governance that's closer to the people. And if you start to feel bad about democracy sometimes, go to a city or go to a state and watch what's
Starting point is 00:34:31 happening there and it'll rejuvenate your belief in democratic institutions. Oh, definitely. I mean, maybe I'm a coward for this, but when I thought about which type of reporter I should be, the local reporter was always the scariest one because you're reporting on people and living in their community. And the same goes for representatives as well. All right, a couple more questions. about funding. Well, one more question about funding. I've complained for a long time in our conversation about how the federal government is pulling funding. But you look at the endowments in universities, and you mentioned this, and they are, I mean, unbelievable. So Harvard's endowment, $53.2 billion. Stanford, where we are, 37.6 billion, a little less, but you can still
Starting point is 00:35:09 do a lot with that money. Why are we complaining about university funding? Shouldn't these very rich institutions, which have effectively become financial institutions in and of themselves, just fund all the things they're asking the government for? Well, endowments under our nonprofit status, we pay out a certain amount of the endowment every year. And it covers mostly a whole range of activities. But do you know how much of that endowment is actually restricted? That is, of that 37 or 38 billion, a lot of that money was given by people who gave it very specific things. And you can only use that payout for very specific things. So those are big numbers, but it's not as flexible as people think. The other thing is that endowments were structured to make sure that universities lasted for perpetuity. That's the whole
Starting point is 00:36:00 idea of the endowment. And I'll give you an example of one time that Stanford had to invade the endowment. We had a major earthquake in 1989 called the Loma Prieta earthquake. We had at the end that earthquake, $157 million in unfunded, because we were self-funded, unfunded damage to the earth. The four quad corners were down. The museum was down. You could drive a truck into a pothole on the streets. We actually did take down more of the endowment payout to be able to finance the rebuilding of the campus. So when you think about something like that, you think these endowments have to be there for keeping the university in perpetuity. But the main point that I would make is that they're a lot less flexible than people think. Okay. All right. I hear you. I mean, you could get a
Starting point is 00:36:52 lot of money off the interest of that $37 billion. But if it's restricted, then that's a real thing. We also have students and we have dormitories. And, you know, as you were driving over to Stanford, you might have noticed that the roads are all torn up. Well, that's called planned maintenance. Right. Nobody funds plan maintenance except the payout from the endowment. Really? Yes. Okay.
Starting point is 00:37:16 So, look, earlier you talked about international students. I promised I was going to come back with some numbers. Some numbers. The Financial Times says U.S. universities face a $1 billion revenue hit over foreign student fears. So more important than the money is the fact that if the U.S. is a brand, it's not attracting the amount of international students that we had previously. This is from the article. Three quarters of universities surveyed in recent weeks anticipate a fall in international student numbers this year with the majority expecting a drop of at least 10%. So a lot of these students, especially here, a lot of these international students, they'll come get an education at Stanford and then they'll go and vent the next algorithm inside meta or open AI or anthropic.
Starting point is 00:38:02 Are we going to do more damage scaring away these international students because of our immigration policies? Well, I really hope that we will be very clear that we believe in international students. And I'm a huge believer that bringing students from around the world is good for our students, it's good for them, et cetera. I want to see what the numbers look like in two or three years. I'm not one to take a snapshot in time. And it's not even clear to me that we are going to have a 10% reduction. There may be some places that that's the case. But I'll tell you, I have some experience with this because I was National Security Advisor on September 11th.
Starting point is 00:38:38 And for a variety of reasons, we had to really constrain student visas. Three of the high trackers were actually registered on student visas. So we very much constrained student visas. We were the ones who created that system that you read about, Civis, where you put in and you get a report on the student as to whether or not they're actually taking classes and so forth. We turned that around within three or four years. And so some of these effects may be temporary. Let's wait and see.
Starting point is 00:39:13 But I'm one who's encouraging, particularly state, to make sure that the visas are keep coming. I think students are starting to get their visas. And we'll see what it looks like in the fall. I wouldn't want to make predictions about what the impact will be. So speak of 9-11, I mean, if you look at the United States right now, we have a moment we're turning inward. We have tariffs to try to bring manufacturing. home, but really to lessen our dependency elsewhere. Some of those are smart, but it's again, it's a focus inward. We're restricting student visas. We're massively anti-war in this country,
Starting point is 00:39:49 if you look at the reaction to... Well, I don't know about anti-war. We just did some very good work in Iran. I know. I'm saying, but just look at the reaction there. It was very controversial, both with the Democrats and with the Republicans. How much do you think the legacy of the Iraq war contributes to this moment? Oh, it probably contributes a little bit. I told President Bush, you know, in August of 2008 that we'd been about war and terrorism and it'd been tough on the country. But I think it's a relatively small issue. I think what's happened over time is the United States has borne the brunt of what George Schultz called the Security Commons. We were the ones who defended the sea lanes. We more than overpaid for NATO's defense. We more
Starting point is 00:40:34 for then overpaid for defense of a great deal of the world. And so I do think there's a little bit of a sense in the United States that we need to redistribute the load. I was very grateful to see the Secretary General of NATO say the United States has carried too much of the load for too long. And it's time for us in Europe to do our part. And so this is not, this is one of those things that I think has been boiling for a while. And now what you're seeing is that other countries with the United States threatening to step back, but maybe not fully stepping back, you're seeing other countries recognize that we need to spread the load a little bit more. I mean, my, in one of my favorite allies was the Australians, because when you're the Secretary of State,
Starting point is 00:41:24 911 is the Secretary, the Secretary of the United States is the 911 of the world. But the Aussies would call and they'd say there's a problem in the Marshall Islands made and we'll take care of it. We'll call you if we need you. We need more of we'll call you if we need you. Right. Okay. I want to end here. A couple years ago, you were rumored as someone who could be the head coach of the Cleveland Browns. You said you're not doing it, but I want to test your football knowledge to see if this could be something that you could do today. All right, second and goal. You're down four, 25 seconds left to go the balls at the one yard line. Are you passing or are you running? Well, if I have Josh Allen, I'm going to run. Because I'm going to, or if I have
Starting point is 00:42:06 Jalen Hertz and, you know, the brotherly push, then I'm going to run. Anybody else I'm going to throw the ball to the corner and have my receiver go up and get it. Marciaun Lynch in the backfield? Marcia. Oh, that's a tricky one. I'm not going to criticize Pete Carroll. All right. Yes. Well, if you would run, you would have won. Super Bowl 49. Secretary Rice, thanks so much. Really great speaking with you. Thanks so much. Great being with you too. All right, everybody. Thank you so much for listening and we'll see you next time on Big Technology Podcast.

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