US Commerce Secretary Howard Lutnick Talks AI, US-Canada Trade

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Joe Mathieu** (0:07)
We are on the ground here in Chapel Hill, and I'm surrounded by a who's who of AI. It's the Mount Rushmore of artificial intelligence as you walk around the Carolina in here. Think Jensen, Altman, Karp, and we'll add another name, Lutnick. The Commerce Secretary is hosting this confab in North Carolina and joins us right now live on Bloomberg TV and radio. Mr. Secretary, it's great to see you here at the G20.

**Howard Lutnick** (0:32)
It's great to be here with you.

**Joe Mathieu** (0:34)
So we were just talking about the sales pitch and some of the comments that the Treasury Secretary made last night. You're surrounded by arguably the smartest people in the world. You've been having fireside chats with them and I've been fascinated to listen to these conversations. Are you surprised they have not been clever enough to sell the American people who might be skeptical about this technology and the means with which we're developing it through data centers?

**Howard Lutnick** (0:57)
I think today was sort of the first day that they really sort of grabbed on to it and tried to understand that they're really, they were saying the word intelligence, right? Like data centers create intelligence. But the right way to say it is the way they said it today at the G20, which is it's education in a bottle. And what they were saying is imagine if all the world, the smartest people in the world were willing to move to your country, speak your language, speak your language and work on the projects you want them to work on. Would you really keep those people out of your country?
See, that's what AI is. AI is education. It's the ability to ask the smartest people in the world to do what you want them to do. And that is what I set out to do today, to have the world understand that they can grow and build using the American tech stack and AI.

**Joe Mathieu** (1:56)
You've talked about our adversaries potentially spoiling the narrative here through disinformation when it comes to data center. Is that true? Where is it coming from?

**Howard Lutnick** (2:05)
I do. I think data centers, I mean, think about it. The number one product that uses water is an almond farm.
Next thing is cattle. I mean, data centers don't use water. This is just misinformation.

**Joe Mathieu** (2:21)
Well, the early generation did, right? I know the newer plants were closed-circuit and used different cooling systems, but people remember these old data centers that made a lot of noise, they used a lot of water and drained a lot of power.

**Howard Lutnick** (2:31)
So basically, if your community embraces data centers, you're going to have great economics, you'll have more power will be built and the price of power in your community will go down, and you'll have the economic power of their paying taxes and they're making your community better. So if your community doesn't embrace a data center, some other community will.
And I think data centers are part of the mix. They're not the mix, because you could always rent a data center from another community that's using it. But the fact is, education is coming, democratized education is coming, and the opportunity in entrepreneurship, which this will really work for America, because we are the most entrepreneurial country. Do you realize, compared to last year, entrepreneurship, new startups, up 40 percent, usually it's like up 2 percent, up 40 percent year over year, this is really the greatness of America coming out.

**Joe Mathieu** (3:34)
Sam Altman put a very fine point on that when he was speaking to the room full of folks in a fireside chat that you were just leading. When it comes to disinformation though, have you confronted your Chinese counterpart about this? Have you met on data centers?

**Howard Lutnick** (3:47)
We met with our Chinese counterparts, and we really talked about how we could work together. Remember, the G20 is all about a collaborative way to how to do things together, right? Can we come up with a set of pillars, a set of really instructional items on AI and technology? Can we all work together, all G20? And I think we are going to reach consensus amongst us all.

**Joe Mathieu** (4:15)
Isn't this zero sum though? Somebody's gotta lose, Mr. Secretary.

**Howard Lutnick** (4:19)
No.

**Joe Mathieu** (4:19)
Am I wrong?

**SPEAKER_1** (4:19)
Yes.

**Joe Mathieu** (4:20)
Are we trying to beat China?

**Howard Lutnick** (4:21)
Yes.
We are trying to have the American AI tech stack be out there in front. But if you think about AI, if we talk about it as education, the smartest frontier models in the world are American. They're the teacher. And if the teacher is relentlessly studying to stay at the frontier, the smartest, the greatest in the world, the students are always going to be a little back. And that's what you have right now with Chinese open source models. They are studying from us, but it's open AI, it's Anthropic. And by the way, Tom Brown was here, he's a founder of Anthropic. He was one of my fireside trats earlier today. And the idea is those are the teachers, those are the frontier. And the Chinese open source models are a couple of generations back because that's what students are going to be when the teacher is the smartest in the world and keeping at the frontier.