tv Charlie Rose Bloomberg June 10, 2016 10:00pm-11:01pm EDT
♪ >> from our studios in new york city, this is "charlie rose." charlie: eric schmidt has been at the center of google's rise from silicon valley startup to one of the world's most powerful and influential companies. he was ceo from 2001 to 2011 and is currently executive chairman of alphabet, google's parent company created last summer. alphabet encourages ambitious projects or moon shots it believes can benefit both the company and society. advances in artificial intelligence and other groundbreaking technologies have opened the door to revolutions in medicine, biology, and many
other areas. i sat down with eric schmidt in new york at the new york economic club for a wide-ranging conversation. here is that dialogue. let me begin with a couple of questions. when you went to google, they said to you, we need an adult in the room. [laughter] because it was a good day for you. eric: it was a good day for me. it is an honor to be here. thank you very much for inviting me, and charlie, thank you for doing this as well. larry and sergey decided they needed someone to sort of run things, and they had spent 16 months interviewing people, and they make them do things. to become ceo, you have to go skiing with them, or you have to go to burning man with them. and very few people met the test, apparently. but i was fortunate enough.
i told them i would not spend the weekend with them, but we made a list of things to do. charlie: 10 years as ceo. what was the most wonderful thing? for you, for the company as you see it? eric: my world is full of beautiful ideas that are not , in the sense that people have amazing ideas. in order to build a company of the success of google or facebook or uber, you need to but a technological idea also a significant change in the way revenue will come in. we invented targeted advertising which is really much better than non-targeted advertising. and we rode that really hard, and that gave us this engine. the same with microsoft had this engine of dos and windows, we had this engine that allowed us to build systems not with a particular revenue plan. we have been able to fail at big
projects without two much of an issue for our shareholders. charlie: so you can risk. eric: we can take risks, invest in ideas, and do crazy ideas. things that i don't think will work, but they work or they don't, we cancel things, it's part of the culture. i learned, that's not normal. most companies are mocked in these quarterly cycles, debt structures -- locked in these quarterly cycles, debt structures, and so forth. charlie: today, what is the role you have? eric: i am mostly working on science. i spend a lot of time working on policy, trying to understand how the world really works, trying to make sure, frankly, the governments would not screw this kind of amazing thing happening up, in the form of the internet. charlie: is the risk of that? eric: of course. whenever you are affecting to medication and information, governments have a role to play. we have a significant battle
with china. the democracies are generally ok, as long as you are on the side of informing people and reasonably fair. charlie: will google be back in china? eric: i hope so. we left in 2010, because they have very strict rules about censorship, and we were unable to operate, morelli, from our perspective -- morally, from our perspective. i spent time trying to get it reopened. it's really up to the chinese government. charlie: i wanted to talk about an issue that is strong with you. the future. the notion of the men's shot. we're -- of the moonshot. we are looking at it in cancer. what are the possibilities a moonshot can do for us? eric: i have come to a sort of view that we are operating under a zero sum set of assumptions in our society,
and i'm including the western world, not just the u.s. we are not asking enough of our people, not trying to build things that are transformative. go back to the interstate highway system, which was to movely justified people around, so the lack of interstate highway system would cause america to not grow at all. it is largely from interconnectedness and innovation. interconnectedness, from bringing the world closer, intellectually and informationally and all the things companies do. and it also, new inventions come along, and every once in a while there are things which we have a consensus, right, and if we just get behind it. we call these moonshots. the vice president did a cancer moonshot. shaun parker has donated $250 million to some doctors
that have learned to affect white and red blood cells in a major way that might be a cancer breakthrough. these things come along, but we don't talk about them. we spent our time arguing about political issues which are largely not that important compared to, how do we solve these massive problems? they can be solved. so the two biggest things going arein the world that i see, this incredible revolution in medicine, and is incredible revolution in knowledge, and the two of them become the basis, i think, for many things we do. the cancer moonshot is powered by these cancer breakthroughs, and we are able to essentially marry the analog world of cancer and biology and the digital world. charlie: there was the industrial revolution, and then the information revolution. where we now, and what is the next revelation? eric: there are two phenomena that i think will be transformative in the next
decade. the first is an health, biology, and the second is in knowledge. in health and biology, there has been a breakthrough in a way of gene editing. at the moment, it is a very tough hammer. they use a piece of gene to reassemble components. gene editing at the basic form. the combination of that and doing databases of genes and sequencing and so forth allows us to really probe into the molecular and biological structure of life. it is certainly true within the next 10 or 20 years, you will be able to get a body part generated out of stem cells that come out of your blood. it is an extra ordinary achievement, one that i think was made in japan. charlie: and removes it from the political controversies. eric: the politics were a stupid argument anyway. the core issue here, you need a new body part, and we can be
generated from euro and sells. that is life-saving -- from your own cells. that is lifesaving for people who need transplants. this is real combat. people are dying, and this fixes it. why don't we do more of it? another one, i'll get on cars in a second, but the core part here is, the combination of all of that is current. why is it occurring? partly because technology and science, but also because there is a great deal of money at stake, because the health care industry sees new treatments as new sources of revenue and new billion-dollar drugs, so you have a good alignment now of economic interests, venture money. the stuff is risky, so venture capitalists, some of whom are in the room, some will make money, someone lose money. that's how it works. information -- google is working hard on the concept of assistance. the way it works, and this is all opted in, with your permission and so forth, it uses
all of the knowledge google has generated, the knowledge graph, we understand how language is spoken, we have 17 years of theories on those things, to help you out. versions, werst built a messaging app which can reply for you, and it sort of learns what your patois is and knows what to say. an first foray in that was e-mail product that would automatically reply to your e-mail. so we launch this thing, and the most common reply is "i love you," which turned out to not be the correct answer in a corporate setting. [laughter] so we have bugs. but -- charlie: let me stop you there for one second. the idea of a virtual assistant coming out of artificial intelligence is, everybody is trying to do that. we have amazon already on the market with echo, and people could up and say, alexa, what time is it, what is the news?
all the major companies are there. i assume the competition will be good for the end product, but is google behind the curve on that? you don't have a product on the market. eric: we have, we just announced a product with different technology. we will see how well it does. this is how our industry works. we are far more collaborative than competitive. everybody won to focus -- wants to focus on apple versus google, but the whole ecosystem moves forward, and it is building those platforms, building that knowledge, it's reasonable to expect that in a decade the vast majority of york computer interaction -- your computer interaction will be by voice. 10 years ago. , i protected this would never happen. shows you how right i am. but you look at technology, and the gains in voice-recognition, and alexa, which is now common, and you see it. particular to the
voice-recognition part. i'm interested in voice-recognition with knowledge understanding. charlie: and attaching to the data google has. eric: or the underlying algorithms. we have a product now or you can get on your phone and speak in your language, and it comes out on another phone in another language. does this really work? yes. is it as good as a human translator? not yet. is it good enough to have a casual conversation? yes. how does it work? turns out it takes your voice, it digitizes it and puts it into text, which is done using a neural network, an ai concept, and it uses a different translation neural network, which learns how to translate by looking at language pairs, and then translates it back into voice. so you have three different translations to go from voice to voice. charlie: is there a name from industrials to information, for the age we are looking at now, the transformative age of all of
the technology and what it is doing for us? is there a name? eric: there is not a consensus name, but i can define it a little bit. another example. there's a game called "go" which americans don't typically know about. it is infinitely harder than chess. and a group, a subsidiary of havee, called deep mind been working for a long time to develop cognitive intuition. they developed an ability, the ability to take a game in the form of bits, they can watch the bits on the screen, and with enough work, they can, playing enough games, they can figure out what the objects of the game are, how to win it, and then beat all the humans. that's pretty interesting. what's interesting technologically is that you don't have to tell it what the
game is. so how does it do this? well, that sort of watches for a while, sees common patterns, and begins to develop a base of knowledge, and then turns against that base of knowledge. this is not a human intelligence we are nots not, making that -- charlie: you said "yet." eric: we don't know how far it will get, but we do know this has never been done before. it applies this to the game of go, which is thought to be non--computable, and it learned how to only look at certain positions by the same rough training mechanisms, and we decided to have a game against the best player in the world, in korea, who is a perfectly nice human being. which wasm 4-1, historic. charlie: historic and huge. help us understand. all the things you just talked about, artificial intelligence, a friend of your said to me
recently, eric is thinking a lot about artificial intelligence. on the one hand, you have deep mind, which is able to beat go. a huge thing. on the other hand, you have lots and which -- watson which won "jeopardy." explain artificial intelligence. in this audience and elsewhere, everybody hears about it, some people make investments in it, hedge funds, others -- eric: remember what i said about the biological role. it's happening because there is a confluence of a platform, a set of ideas, and a large amount of money and a lot of investing, a lot of people coming out of school, working on it, and the sense it is transformative to everyone's lives. the same thing is going through. with respect to ai, the current ai uses, a couple that are similar. if you are familiar with a disease called diabetic retinopathy, because diabetes,
tragically, is taking over the world, it causes your eyes to go bad and you become blind. it can be detected by an ophthalmologist, but we did a test where we took pictures of your retina, and we could do it better than an ophthalmologist. how is that? we see more eyes. we sell one million eyes. it is hard for an ophthalmologist, as hard as they work, to see one million eyes. there's a large number of cases where if you just let the computer see more examples, they can come up with better decisions. another example. there's some, we believe, you can apply this to oil and gas is to beat networks. there's a great deal of leakage and sort of, decisions that are made about flow and storage, and so on and so on, and by using that data, we think we can reduce the emissions from that. so that's -- by the way, the emissions are
also hurting the industry. how far can this go? we think we can develop enough intuition that a physicist or a chemist could say -- you know, they wake up in the morning and say, i want to combine this chemical without chemical, and i want to have the following crazy reaction. it's not going to blow up, and it will produce a new substance that will get me a nobel prize and a promotion at work. so they do that, right? that's not a clock in the morning. 11:00 in the morning they do that, and they have the subsidiary chemist do it and it fails. so they have dinner, and the next morning they come up with another one. that's how it really works. and these are incredibly intelligent people. to we can ask the computer go through all the combinations and give you probability. does that matter? these are trillion dollar industries, globally, around chemicals,, synthetics, drugs. charlie: with respect to artificial intelligence, on the one hand deep mind has a
different operating idea than ibm's watson. explain how they are different, and what they are trying to accomplish on their own? mind --tson and date deep mind are doing completely different providences. watson, they use a particular kind of inference model, that's the technical term, which works particularly well for jeopardy and complicated problem solving, and they are having a lot of success applying this to complex systems and explaining them. think of it as, there's a complicated system, and they can read it and tell you what is in it. complexity, and you take away, however it works. so you can read all the contracts, and get an answer. facebook announced this week, they have a breakthrough in
language understanding around communications, sort of what they do, and they say they have made progress in detecting hate speech. that's clearly a good thing. in our case, we took a position we wanted to build an underlying platform that allows you to do all this, so we built a network, sorry to describe it technically, that is called tensorflow. a multidimensional matrix, and these are multidimensional matrix algorithms of one kind or another, and we have built this framework to all our competitors. it is so strategic to us to build, that we took this amazing intellectual property and gave it out. ♪
♪ charlie: you bought deep mind. some will say to you what they are trying to do at deep mind, they try to understand how humans think and bill from there . the ibm people will say it is man plus machine. eric: the deep mind people are interesting, because the founders came out of neuroscience. buildy imagine you would computer systems that use the same way we do learning, and i will give you an example. i won't do a good job of this, because i'm not a neuroscientist. but think about it, when you came into this room, how much
cognitive time did you spend figuring out that the floor was where your feet went, the lights were up there, the table was there, and you had a knife and a fork, and there were roughly eight people, and everyone is dressed properly? zero time. you had already learned that. you had chunked that, if you will. there's evidence that our brains will study a scene, and then we will sub-set the things that are really important,. and the things that are really important, we then put into the brain. this is called reinforcement learning in their bernanke letter, and we believe free --their vernacular, and we believe this will be a core part of ai. charlie: interesting, in terms of business and economics and the global economy -- take these five companies, apple, amazon, google, facebook, microsoft --is their race to do any one thing, are they all in the same business?
we know apple has made a fortune on smartphones. a fortunes made a smar on search. microsoft made a fortune on software. fortune on all kind of different things, but are these companies in pursuit of a holy grail? eric: tech companies as a group are highly competitive, seeking new, i want to say the right thing -- think of each of these as a platform driven by innovation that solves a problem that is global, in some cases a problem you did not know you had, but you discovered they solve very well. so if you go back, microsoft being the eldest of them, saw a problem of interoperable workstation platforms, and we know where it went from there. amazon started off as a virtual bookstore. i did not know i wanted a virtual bookstore, but now that
i have one, i know it's fantastic. apple 's transformation was legendary. we saw the resuscitation of the company, and when steve took over the second time, he clearly wanted to do phones, and led the category. each of these companies -- we have never in our industry had, and i would argue the first four are leading the platform fights, we have never had that many companies fighting so brutally against each other, yet also collaborating. in our industry, we always had ibm and microsoft and a few others. charlie: where is the collaboration? because you are also suing each other. [laughter] eric: that's normal. there's lots of collaboration. a typical example is our apps all run on microsoft, or run on apple. charlie: last year, they announced a partnership with microsoft. eric: the traditional model would say, we will not put
anything on that platform. it turns out apple is a customer, in our case, and we are also a customer of apple for things. on and on and on. in fact, everyone sort of argues with each other, but we benefit, we as an industry have benefited from global markets -- open markets, globalization, a sense that markets are transformative. charlie: should we insist on open sources, in terms of the future, in terms of all that is being discovered, or are we looking at a world in which each organization is going to be jealously guarding not only what it knows and is learning, but also trying to hide away and protect itself from losing their most talented human beings? eric: this is the genius of competition. we fight brutally to hire the top people, to get our products out.
think about the android phone or the iphone you use today. think of how powerful it is. i figured out, it is 100 million times more powerful than the computer i used when i was in college. by the way, it cost a lot less. there was only one of them in college, and i stayed up all night to use it, because it was the only way you could get access to it. so it is real consumer benefit. i think the competitive structure, the architecture you described of those four or five companies, will continue for a while until another one joins us, and one leaves. charlie: when we don't know now. eric: of course. i can tell you now, the correct which has on her well. and disclosure, google is a large investor in uber. charlie: so is saudi arabia's sovereign wealth fund. eric: i did not do that deal. has done incredibly well. i wish i invented uber.
it was actually invented in paris, at the base of the eiffel tower, according to travis. at the exact time he was inventing uber, i was giving a speech saying there will be amazing companies founded based on smartphones, google maps, and gps, but i could not figure out what that was. i will tell you, the next uber, be talkingwill about in five years, will be built on a machine intelligence platform and very fast networks. it will use a smart phone, android or iphone most likely, and it will use very rapid iteration. i just don't know what the app is, wahthart problem. fastie: in terms of how technology is evolving, the fear is often that people, from people like elon musk, larry,
bill gates, is there some danger from machines becoming so smart, so human, but uncontrollable, that they provide a threat to the planet? erioc: these people have been watching a lot of movies. [laughter] charlie: these are your colleagues, and smart people. eric: my colleagues, and perhaps competitors. byn backed up his concerns he back of his concerns over this important issue by investing $1 billion in a competitor to deep mind, so we will see how that plays out. you never say never, but let's go through what is needed to make that scenario happen. the first thing is, we're still learning how to do basic intuition, those kinds of things.
there will be breakthroughs, and we would get excited about it and we will be able to answer questions, answer e-mail, make suggestions for what movie to go to tonight, and so on. we may be able to, and we hope to be able to assist humans in their daily jobs. and who doesn't want help? think about all the professional, so on and so on -- we think we can do that. it is real speculation to get to the kind of human level of intelligence that everyone here has in the room, let alone going past that. my own intuition is, it's just a guess, is that there's another discovery needed, that the human level of intelligence is a very hard problem, hard to define what it actually is, but my own intuition is there's probably another discovery, which might occur, and then the concerns over,, oh, my god, the robot has let loose in the lab and is deciding to kill its owners, i saw that movie. [laughter]
charlie: there are questions of disruptive technologies. there's, does google fear there may be some disruption, so search engines will be obsolete? eric: in my industry, you always worry about the next idea. inevitably, there's always new team. the young professor and the graduate students. by the way, that is how we started. you always worry about that. there are many, many ways in which what we currently do would be disrupted over time. this is why we invested so much. charlie: big picture. some people worry that there may be, somehow, going back to the 2000, 2001, you lived through oft, some kind of collapse technology companies. a bubble bursting.
lived through the bubble. we were so much more handsome and beautiful during the bubble, i must say. the bubble makes you feel like you are god. a member being at this dinner in vos, looking around, and thinking -- these are the leaders of the free world? we sort of got ahead of ourselves. thank goodness that it crashed and we rebuilt it happily. for the companies that don't have strong profits, they have a strong potential revenue scale solution. charlie: they know technology will bring productivity. will it also create problems in terms of people being displaced from the job market? eric: we have had this concern for a long time. if you go back to the 1980's, there is a great deal of concern that there would be a loss of jobs.
americanct, the economy has generated during all of the travails and ups and downs a large number of jobs. i think the evidence is that the american model does create jobs. but the jobs are different. and everyone has a right to fear for their own future and fear their jobs will be disrupted. but the fact of the matter is, the u.s. is running near what economists call full employment. and that is a testament to the twovery since 2008, thousand nine. everyone here was in new york, i would assume in 2008 and 2009. try to remember how you felt. it was only seven years ago. think about how strong this city and what you all have done is. i am not as worried about this. there is a problem of the loss of high-paying, middle-class manufacturing jobs.
this is in the new data. the hollowing out of the middle. nor are many economic solutions -- there are many economic solutions for that. the ultimate answer is more education, more education, more competitiveness, more entrepreneurs. what is interesting, you named the five companies. every one of them was started by incredibly brilliant entrepreneurs. maybe we should thank them occasionally. i'm not the founder. think of all the jobs these guys created. you get the idea. charlie: speaking of taxes, should there be a change in the tech structures so they bring all of that money from overseas home? eric we have argued for two : decades that the offshore cash -- it seems crazy to not let that
cash come into the country and be used. here is another sore point. we are under investing in our infrastructure. the country's population is growing. the connectivity is increasing. .ou have greater demand we need to spend the money on roads, bridges, airports, you name it. charlie: globally, where is the most competition going to come to the american technological economic engine? is it china, south korea, somewhere else? eric: the history in this was, america would invent it, korea would perfect it, and china would make it in huge volumes. many people think china would jump one level higher and are following our playbook. they are incredibly intelligent, they have lots of money, and
they are very, very focused on emphasizing their universities. critics believe their educational model and speech and everything will not allow them to get to our level. there are arguments that china's economy is slowing down. i can't understand. china is clearly going to be a player. the most interesting country to spend any time in is israel. on a path for pound or person for person -- whatever metaphor you want -- their productivity is the highest in the world. partly because they have forced military service and are aggressive in their culture of innovation. that is a repeatable model. charlie: one of the last times i saw you, partnering with cornell? eric: that's right. charlie: trying to create a silicon valley, essentially, in
new york. eric: mayor bloomberg. a huge canvas with a combination of cornell and the tech of israel. silicon valley needs a competitor. i love this project. but if you go through where the innovation will occur beijing , comes to mind. tel aviv comes to mind. london is having a huge renaissance. it is largely because kings cross has a line that goes to cambridge. that train line is about an hour and a half. i'm serious. at one point we go to cambridge and not oxford? cambridgepeople at had a lot of land laying around the university and allowed the parks.ction of business which is unusual in europe because they do like to build anything. excuse the comment, but it is roughly true. they were clever enough and owned a lot of land that was
unoccupied. they had on the order of 1000 startups, but at some point, they have to move to a city. and of course, they moved to london. kings cross. so that is a pretty good model. charlie: what about the model stanford has with silicon valley? take the founders of google. in graduateth schools. and the relationship of them doing whatever they want to do, does it create opportunities? eric: you could argue the cornell program is the same thing here. stanford is the best example of this but there is no secret here. it's not like an intellectual property in a vault somewhere. stanford is organized around graduate students. they have a lot of funding. they are encouraged to write interesting things. the moment they have something interesting, they have lunch with a venture capitalist, they get funded to a couple million dollars, which to them seems
like an enormous amount of money. and for me, too, at the time. they move into some dumpy house in palo alto that cost too much. six or seven cycles. so, it is highly repeatable. charlie: if you were starting over today, would you going to biology rather than computer science and engineering? eric: both are having a renaissance. i don't know. it's interesting you ask that question. i spend a fair amount of time with computer scientists working in biology because they are right at that intersection. all of the interesting computer science problems at scale are true in biology. the number of proteins in protein folding. i figured genetics was a solved problem. i did not know this. your genes change as a result of environmental factors.
and another complicated ways involving proteins. this is just a gold mine for the problems that people like myself are interested in. that worked today will become the foundation of nobel prizes 10 years from now, 20 years from now, 30 years from now. jamese: i have asked komen to be interviewed. he has been at the forefront, loggerheads between the fbi on one hand and national security issues, and at the same time, encryption. where do you come down in terms of somehow, in the national interest on both sides finding a , solution to this? eric: we need a solution to it. the industry is united saying that the government forcing us to weaken encryption is a bad idea. if we are forced by law to weaken encryption, it will be -- to weaken encryption, and there are people proposing that, it will not be just a government that has access to your
information on your phone. it will also be the bad guys. the computer can't tell the difference between the good guys and the bad guys. it's even more important in the juice like china, where laws are not so favorable to human rights. we have taken a position that they need to be other solutions rather than forcing a weakening or a backdoor. charlie: rights. eric: it's a hard issue because encryption is getting stronger. it's important to understand what happened. when snowden revealed all of the activities, which was an illegal act on his part, we read all of the things the government was doing which we did not know about, which was to survey the united states citizens. we have fully, fully encrypted the data at google, at rest and in transit. if you want to be private, the best place is gmail. seriously. it is fully encrypted, very strong, very difficult to break
in. and we know this because everyone is complaining. charlie: what would happen if the fbi director came and said we know this person is suspected of something serious and we think there is an exchange of information through gmail. please give us access. eric: america has a great law. it's called the fisa court. charlie: right. it's a legal proceeding. eric: it's a legal proceeding. that is the front door. terrorism is a horrific thing. the fbi director would not call us. they would go to this three-judge panel and the three-judge panel would order us to give information and we would give it just like that. charlie: most of the time, they have. eric: well, in fact -- something like -- it's a public number. less than 50,000 times a year we are asked this.
we have billions of users. it is a relatively rare event. that's for all national security matters. charlie: 10 years from now, the world will be dramatically different because of what we do? eric: think about the information you have now that you didn't have a decade ago. think about the companies you talk about today that did not exist 10 years ago. think about the -- find a 10-year-old. borrow one. get one loaned to you. watch this 10-year-old on his or her ipad or iphone. and you will see the future. it is a good future. is the evidences -- evidence people are getting smarter. not dumber. educational achievement is going up. a lot of this is due to the interconnectedness. it's going to be a very good world. charlie: it reminds me of the old joke.
drive the adoption of clean, low-cost energy producing and energy-saving technologies. it owns and operates moderate size, regulated utilities that benefit from access to low-cost capital and have deeper connections with the local community then it's larger peers. -- its larger peers. they are the managing partners of 21st century utilities. i am pleased to have them both. tell me how this began. >> way back when, the company. industry i have grown up with. this is an industry that i believe has been transformational from its founding well over a century ago. my believe and probably peter's -- my belief and probably peter's believe is there are technological changes that are occurring in the ecosystem of electric power generation production and use that makes
the utility even more relevant. charlie: notwithstanding everything that has changed in energy, you believe that you can take the regulated utilities today and make them energy-efficient? >> we believe that is the objective of a well functioning utility in today's world. yes. charlie: how are you going to do that? >> so much of the technological innovation occurring today is on the customer side of the meter -- in homes and businesses. nest thermostats, rooftop solar, energy assistance, tesla cars and power walls. so much requires that utility move beyond the meter and embrace the customer as a true customer and give that customer a choice to embrace the new energy efficiency and clean energy technologies as part of the integrated system. charlie: how does it do that? >> we had the million rate pace -- base model. which is a little bit wonky. all utility investments go into
the rate base. substations, power plants, transmission lines. one rate base. like giving millions of cell customers different plans. utilities will give customers their own individual rates. they can buy power from the grid or can buy rooftop solar, tesla, and electric cars themselves in their individual rate base. charlie: what part of that are you providing? >> there is so much talk about the need for a green bank to finance the growth of clean energy. the utility is nothing. it is not a bank. it is a steward of infrastructure assets. we are offering customers the chance to buy these technologies at the lowest conceivable cost at no extra profit margin. the ability to have on bill financing. they can pay for these
technologies over time. charlie: where is your competition? >> status quo. charlie: do you worry about people that have tons of disposable money that have it sitting in their banks? people like silicon valley companies that say, why don't we go here? we have a huge amount of funds to finance the most modern of utilities. >> they do, but in order to businesshat model and ethic, you have to be grounded in the industry. believe these silicon valley companies will look at this and say, gee. it is regulated. we don't like being regulated. we like being regulated -- because it allows us to partner with environmental and consumer advocacy groups in a way that other industries, it does not exist.
charlie: because those groups are interested in regulation? >> because those groups are interested and our partners in the evolution of a public service. utilities provide a public service. silicon valley technology companies do not view themselves as public service companies but entrepreneurial ventures. utilities have always been and continue to be public service enterprises. charlie: go ahead. >> it's very interesting you raised silicon valley. i started a smart grid company. silicon valley spent a lot of money and had a number of companies trying to change the power system from the outside. some really smart people, some really great companies. what we have concluded, it was that you need to change the industry from the inside out. these utilities have a mandate
to provide affordable power to everyone. silicon valley has a huge role to play. the utility industry has its role to play to get this technology deployed at scale in the homes of wealthy people. poor people alike. charlie: what are those utilities that represent the future? >> there are some very well run utilities in different parts of the country. they are not concentrated in one place or another. in vermont green mountain energy , and green mountain power, i think they are doing the best job of any pushing the envelope and embracing that. charlie: how are they doing that? >> they are doing many of the things that we are going to do. we want utilities to be cities on a hill and he in the related -- and we want to be emulated by others. you're not really competing for customers. you have a territory and someone next-door has a territory. they are embracing solar. they are embracing energy efficiency. their team is doing a really brilliant forward-looking job to the people of vermont. charlie: what about the dramatic
need for an energy miracle? >> you know, we all have tremendous respect for bill gates. i think we need an energy revolution. in some sense, if you look at the price of solar power, it is much less extensive than other conventional means. the market signals are there. >> to playoff the solar example, the most recent long-term contract for solar power which was entered into by the dubai electricity and water authority was an 800 megawatt contract at cents perents -- 2.99 kilowatt hour. that is cheaper than coal. it is cheaper than natural gas. it is cheaper than wind.
yes, it is dubai. but there is no 30% itc in dubai. that is the all-in price of the solar power. in our view, the energy revolution has not only taken place, but it has continued to evolve and drive down the cost of these transformational technologies. charlie: what is dramatically needed is market conditions that are price competitive? >> we want to put our foot on the accelerator of market conditions taking place. we want to create a cleaner and more cost effective environment for energy to be utilized throughout all segments of society. charlie: does this country have an energy policy? chef but i don't believe so, no. to be blunt, no. i don't believe we have had an energy -- >> i don't believe we have had an energy policy since the carter administration when james flesch and your -- james schle
ssinger was the first head of the department, there was a coherent and actionable energy policy back in the late 70's and early 80's. since then, in our opinion, we have not had an energy policy and argued all of the above is not an energy policy. you have to make choices. all of the above is you don't have to make choices. we believe you do have to make choices to consciously evolve the system in a thoughtful manner from where it is today to where you want it to be. charlie: what is the role of coal and what is the role of nuclear? >> in 2001, coal was king. the most recent data out of eia, the energy information administration, from march of 2016 showed coal at less than half of the percentage that they were in 2001. 24%. made up by natural gas and made up significantly by shale gas. and also made up significantly
by renewables. as time goes on, we believe coal, from an economic perspective, the math is going to result in it being phased out over time. as we have seen already over the century, coal's share of the market has been roughly cut in half. charlie: nuclear? larry nuclear. : one of the interesting observations and data points of last week is that one of the largest nuclear operators in the country, exxon, it operates to nuclear plants in illinois. one is called the clinton plant, the other is quad cities. these are existing plants that are operating quite well. exelon said they are two of the best operating plants in the system. they are voluntarily shutting them down, one in 2017 and the
other in 2018. the reason why is, in this economic environment, even in existing plant that has all of the capital completely paid for is no longer cost-effective. it underscores the changing dynamics of the nature of competition. charlie: when do you expect it to be operational and have plants online so you can demonstrate what you are selling? >> i think within a year to a year and a half. i think we have been able to demonstrate a shift and our -- in our first electric utility. there is a whole regulatory approval process. it takes quite a bit of time. charlie: within a year you think you will be operational with a plan in place? >> yes. charlie: good luck. >> thank you. charlie: thank you for coming. the company is called 21st century utilities. thank you for joining us. see you next time. ♪
mark: i am mark crumpton. you're watching bloomberg west. let's begin with a check of your first word news. senator elizabeth warren and hillary clinton held a private meeting today a clinton's washington home. this comes a day after the massachusetts senator formally endorsed mrs. clinton for president, fueling speculation warren could be on the short list for a running mate. likely republican presidential nominee donald trump tweeted -- goofy elizabeth warren, one of the least productive u.s. senators has a nasty mouth, hope she is vp choice. hockey legend gordie howe is dead. from 1946 until he played 26 1980, seasons in the nhl and six in the world hockey association. nicknamed mr. hockey, he was a