Microsoft President Brad Smith Talks Investing in the Gulf

SPEAKER_1 (0:02)

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Kayleigh (0:07)

Thanks for being with us on Bloomberg TV and radio as we hand things over to our colleague, Ed Ludlow, of course, the host of Bloomberg Tech, who is joined now in conversation by the vice chair and president of Microsoft, Brad Smith. Ed, over to you.

Ed Ludlow (0:21)

Yeah, thank you, Kayleigh. And the focus this week in New York City, of course, is the UN General Assembly, where AI is a piece of subject matter, is front and center. Brad, thank you very much for being with us. I appreciate, actually, your schedule at the UN General Assembly is very busy.

There is a fresh piece of breaking news in the last hour, which is Microsoft expanding a commitment to the Gulf. This is a $10 billion commitment between now and 2030 for Gulf nations. But the timing is interesting because of the war in Iran, the situation in the Gulf itself. Explain why and why now.

Brad Smith (0:56)

Well, Microsoft has been a long-standing partner providing compute, cybersecurity, cloud services to the nations in the Gulf. I think this is an important time. It's the right time. We're expanding our investment and I think that reflects two things. One is our confidence in these countries. They're really leading the world in many ways in AI transformation.

At the same time, we've all learned a lot. We've all been through a lot together over the last seven months, really strengthening the cyber resilience of these countries in the Middle East. And what we're committing to is not just increasing and spending more money, building out more infrastructure, working with the national champions in those countries, but pursuing a digital resilience initiative to strengthen their ability to continue to prosper, to flourish during this time of conflict, to strengthen cyber security and the like.

Ed Ludlow (1:55)

Brad, I'd be interested to get a sense of how this has been operationally in the period. If I think back to the end of last year, as a case study, you'd made a commitment to use 200 megawatts of capacity in Abu Dhabi, right? And the world changed in the early part of this year. Are you still committed to that specific deal, for example, in the Gulf?

Brad Smith (2:15)

Yes, we are. And what we're seeing in Abu Dhabi, in the UAE and across the region, including in Saudi Arabia, where we'll bring live a new set of cloud services in just five weeks, is a commitment to protect these resources. The US government is helping to protect these resources. But in addition to, say, kinetic warfare, it's critically important that we strengthen cybersecurity. That's requiring closer collaboration.

And digital resilience, in part, requires that one be able to, frankly, move data around. That's what Europe learned during the war in Ukraine in 2022 and ever since. I think it's an important reminder when people are talking about things like digital sovereignty, you've got to be able to protect your data. Oftentimes, the best way to protect it is to move it, especially in a time of conflict.

Ed Ludlow (3:10)

As you know, I'm very focused on physical infrastructure.

There's a great emphasis in tracking of how much of capacity is coming online in the real world. So again, take the Gulf as a case study. There was a commitment that Microsoft had made to deploy advanced GPUs in the region. Did that deployment take place yet or start?

Brad Smith (3:35)

What I would say is we are on track. We're doing the things we said we would do. We continue to explore opportunities to do more. And it's easier to ship American advanced GPUs to a place like the UAE today than it was a year ago.

So in many ways, I would say there is just long-term tremendous cause for optimism. And what we have to do between now and say at time when there is peace in that region, continue to work with governments to collaborate closely to protect these resources.

Ed Ludlow (4:12)

Brad, what kind of questions have you been getting this week so far at the UN General Assembly? What is the sort of point of interest of a world leader with everything that's happening in AI in particular?

Brad Smith (4:24)

It's an interesting time because I'm getting fundamentally three questions. One, especially in many countries, how do we go faster to diffuse AI to spread the benefits of it? So the benefits are not just say in the global north. People recognize it will drive scientific discovery, medical advances, productivity gains. We should spread that everywhere.

At the same time, people are asking, should we slow down as an industry on say the frontier models, the next frontier of the frontier models, while speeding up safety? And I think that is becoming a critical conversation. Should we slow down the frontier while safety catches up? I think that is the other big conversation we're finding repeatedly in the United Nations this week.