Tech'ed Up

Chips, China & TikTok • Senator Mark Warner (D-VA)

January 26, 2023 bWitched Media
Chips, China & TikTok • Senator Mark Warner (D-VA)
Tech'ed Up
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Tech'ed Up
Chips, China & TikTok • Senator Mark Warner (D-VA)
Jan 26, 2023
bWitched Media

Senator Mark Warner (D-VA) joins Niki from Capitol Hill to take a deep dive into tech issues facing the 118th Congress. Specifically, Sen. Warner lays out the national security risks the United States faces from the Chinese Communist Party’s involvement in one of America’s favorite apps: TikTok. This conversation includes a look back at last year’s passage of the CHIPs Act and a look forward to his potential bipartisan social media legislation.

"…look at what the kids in China are getting on their equivalent TikTok accounts versus what our kids are seeing.  That shows the power of the algorithms in terms of how they can drive certain content." -Senator Mark Warner

Show Notes Transcript

Senator Mark Warner (D-VA) joins Niki from Capitol Hill to take a deep dive into tech issues facing the 118th Congress. Specifically, Sen. Warner lays out the national security risks the United States faces from the Chinese Communist Party’s involvement in one of America’s favorite apps: TikTok. This conversation includes a look back at last year’s passage of the CHIPs Act and a look forward to his potential bipartisan social media legislation.

"…look at what the kids in China are getting on their equivalent TikTok accounts versus what our kids are seeing.  That shows the power of the algorithms in terms of how they can drive certain content." -Senator Mark Warner


[music plays]

Niki: I’m Niki Christoff and welcome to Tech’ed Up.

 Today I’m chatting to Senator Mark Warner, who joins the pod from his office on Capitol Hill.

He has a bonkers schedule, so this is a quick episode and we dive right into it. We discuss last year’s passage of the CHIPS Act, his intention to introduce bipartisan legislation to reduce the harms of TikTok, and he ignores my joke about his staff getting him a birthday gift of a necklace made out of semiconductors in the shape of Virginia. And yes, [chuckling] I then called his staff a bunch of nerds.

Before becoming a public servant, Senator Warner built an incredibly successful telecommunications company and worked as a venture capitalist. He knows tech. And as Chairman of the critically important Select Committee on Intelligence, he also knows a lot about threats to the US.  I’m so grateful that he took the time to come on the show to talk to us about both topics.

Niki: Welcome. Today on Teched Up, we have a special guest, Senator Mark Warner from the Commonwealth of Virginia.  

Welcome, Senator! 

Senator Warner: Niki. Thank you so much for having me. 

Niki: Thank you for coming on. I know literally nothing's ever happening over on Capitol Hill, [Senator Warner: chuckle]  I joke!  You're the Chairman of Senate Intel. There's a lot happening, and we are here to talk today about an issue that is tech-related but also very national security related. 

So, let's just dig into it. But before we do, really quickly, your background is in tech, and I used to be at big tech companies, and one of the things we always liked about you and your staffers [chuckling] is you understood the tech.

So, just one sentence on where you were before you joined the Senate and what your priorities are as a senator.

Senator Warner: Great, I appreciate that. Yeah. I spent after failing miserably in a couple of businesses, my third try was in the very beginnings of the cell phone industry, and I went on to form, founded a company named Nextel, and then a venture capital fund called Columbia Capital.

I'm proud that Columbia Capital is, is still in existence and I think we’re on our third generation, so I'm proud of that. Obviously, no involvement. And within the tech world, I really have for this Congress, I have three items that I'm gonna quickly touch on. 

First is, I've been working since the 2016 election, where I really got exposed to the level of misinformation, disinformation, Russian bots, et cetera. That while the social media companies are great companies, that there's a dark underbelly. And the fact that Congress has never taken on anything from even basic privacy laws to data portability, interoperability, to questions around Section 230 reform, to protecting our kids. 

Revisiting that framework around social media is, I think, still terribly important. And I actually believe this coming year, we might surprise people and put some points on the board. 

Second, and I see this a lot from the position of the Intelligence Committee, the questions around cybersecurity and, in particular, while I think we've made some progress, the whole intersection between healthcare and cybersecurity. 

I was just recently at the CES show in Las Vegas and probably, next to autos, there were more healthcare apps there. Yet it still feels to me like we are, in terms of, of cybersecurity, we are bolting on cybersecurity onto our healthcare system rather than developing healthcare solutions that have cybersecurity baked in.

And that gets into the whole question of legacy items, it gets into privacy, but it is the current disorganization chart of seventeen federal agencies touching different parts of healthcare and cyber securities that is a mess. 

And third. But third is far and away the most important and I hope where we can spend some of this conversation. And that is the technology competition with China. Twenty years ago, I was part of the traditional theory that the closer you bring China into World Trade Organization and other international forums, the more that China is going to become like the rest of the world. 

And I think we were wrong. And, and let me be clear, this is not just politically correctness, but it's what I deeply feel is, y’know, my beef is not with the Chinese people. My beef is with the Communist Party. It's Xi Jinping’s authoritarian leadership. And, and if we don't make that clear, we play into the Chinese propaganda issues, in terms of bias against the Chinese diaspora anywhere, against Asian Americans. But I do think this competition with China- [interrupts self] and because I am of an age where we used to compete with the Soviet Union. 

The Soviet Union was a military threat and an ideological threat. It was never an economic threat. It was never really a technology competitor. China very much is. And so, we’ve, our, my intelligence committee, I'm proud of the bipartisan work. We're the first to, to spot problems with Huawei and 5G. John Cornyn and I led the efforts on the CHIPS bill.

So, my hope is that in my role as Chairman of the Intelligence Committee, we're gonna look at the other technology domains where this country needs to invest so we don't do, in the case of CHIPS and 5G, where we were chasing the problem after there was already a Chinese leader. So, I'm going deep on advanced energy across a series of [unintelligible], synthetic biology, artificial intelligence. Where will we need to get ahead of the game so that we, and our friends around the world, don't end up with a the Chinese Communist Party regime winning the day in, in these technology competitions. 

Niki: I really appreciate you saying it about the, the CCP, the Chinese Communist Party, versus the people living in a totalitarian state.

I don't think that's just politically correct!  It's, there's almost, in my opinion, this may not be your opinion, but even saying President Xi indicates that there's an election, which there's not!  [Senator Warner: There’s not] Which, I mean, that was Mao Zedong; that was his job. Like it's the same job. It's just a different title. And so, I think twenty years ago, I was where you are, thinking that we'd bring elements of capitalism in and that would open up democracy, which has not at all happened.

And one of the things that I think is relevant, you talked about 5G; you talked about Huawei. We know there's an enormous, I mean, almost jaw-dropping, IP theft problem happening with, sort of, corporate espionage. That's an issue. But when you think about national security, it's interesting you mentioned economics; and you mentioned the side of it, which is investing in US technology and we, let's talk for a minute about semiconductors and the CHIPS Act. 

And before everybody listening, like, groans and are bored about it [as an aside] I think, this is not Senator Warner's position, I think you should take, listeners, all of your anxiety about plastic in the oceans and transfer it to anxiety about chips. [chuckles] 

Where are we with chips? 

Senator Warner: Well, one where we are, and it shouldn't have taken a couple years to get this done, but just quickly, top line and you're audience is sophisticated enough to know that, y’know, there is no device that has an on and off switch that doesn't have some semiconductor components.

And as we think about a more connected world based upon IoT-connected devices, they’re all going to have semiconductors. We used to, as in so many areas, dominate this field. We, 40% of all the chips are made in America in, in the ’90s,  that has almost gone down to about 12%. In terms of cutting-edge chips, the, the most advanced chips that go into our fighter jets, satellites, y’know, advanced technology devices, we don't make any of them! They're all made in Taiwan!

 And so, you've got this rise of China producing their own set of chips. You've got Taiwan, with its geopolitical uncertainty making virtually all the advanced chips, in many cases for the whole world, out of TSMC. And we have this sit-situation where we were having nation after nation make major investments in trying to, to, build semiconductor businesses: Taiwan has, Korea has, Japan has. 

Y’know, over the last year, while we waited to get CHIPS passed, I mean, this was one of the things that finally got my colleagues to say, it's time to get off our butts and get this bill passed, is the Europeans literally had no CHIPS initiative back a year and a half ago when the Senate first passed CHIPS. In the ensuing year, the Germans managed to put 8 billion into Intel to get an Intel fabrication, “fab,” in, in Germany. And, I pointed out that when the European bureaucrats can beat America at getting something done, that oughtta be a wake-up call. [Niki: [laughing] For sure, for sure!]

It's about jobs. It's about national security. It's about, y’know, how we build these alliances with our friends around the world. And, y’know, the, the CHIPS investment is 52 billion dollars in R&D and direct subsidies. There's another 25 billion on top of that in terms of tax credits with the investment tax credit.

So, this is a, I know it used to be called a dirty word- industrial policy- but this is a quasi-industrial policy where while we don't pick an individual company, to pick winners and losers, I'm against that as a hardcore capitalist and venture capitalist. But you do have to pick domains, and this is an area where we were rapidly losing that edge, and without this kind of investment, I think it was gonna be a downward spiral.

Now, making sure these dollars are invested correctly- there's never been a case of, y’ know, where the rubber hits the road and implementation is more, more important than this area. And I am, you know, very glad that, I think, the star of the, the Biden cabinet, Gina Raimondo, is gonna be the person in charge of that.

Niki: She is a star. I agree. I'm also a hardcore capitalist, although it's falling out of vogue among younger, younger Americans, but I'm still there! And it's a national security issue because if everything that we own runs on a supply chain, which was fragile just from the pandemic, but if you also look at the geopolitics of it, we, we absolutely must have some homegrown chips.

You, I don't wanna accuse you of having the nerdiest office in the United States Senate, but I did hear about your birthday gift [chuckling]...

Senator Warner: I'm a, I, I'm a little, yeah. I, I, I, I'm guilty as charged! But you know, it's, it's, um, particularly as somebody who wasn't a tech investor, being, being able to at least get past the buzzwords to try to drill down on some of these issues is, is exciting.

It's also, y’know, this issue; both the combination of China and technology competition is still one of the few remaining truly bipartisan issues. Y’know, a lot of these issues don't fall on the conservative/the liberal, y’know, continuum. It's much more kind of a future-past and I think America's always been its best when it's been future-leaning. [Niki: Yup]

And then, y’know, I think there's a, a lot we can do to reestablish the need. One, this gets back into the nerdy category. So, the big picture- we, the thing that scared the dickens out of me as much as anything was not only back with Huawei winning the 5G contest. And I say this as somebody who was in the wireless industry, so I’m particularly nerdy here, but China was also flooding the zone on all of these standard-setting bodies. 

One of the things that's kind of been a secret sauce in terms of America's success, literally since Sputnik, is with virtually every technology innovation, even if it wasn't invented in America, we got to set the rules, the standards, the protocols. We did that in wireless, we did it in satellite, we did it in TV, you name the software.

China woke up to that. And you know, in 5G, for example, in the next generation, they were not only the world's leading company, but they were starting to set the rules. We've seen that as well in terms of China investing in a lot of the forums around artificial intelligence. And boy, you do not want an authoritarian, non-privacy protecting, y’know, regime setting the rules for AI on a going-forward basis.

So one of the things we do, we also need to do, is make sure the public sector, private sector, and our friends around the world reengage, not only on innovation but then the rules that surround each of these innovations, 

Niki: [interrupting] Right! Not, I mean, and not just “America First,” but sort of a democracy and a place with the rule of law running some of these things.

I passed the Official Clock with my young cousin at the Naval Observatory, and I said, “That's the official time.” And she said, “Oh, is that Apple’s headquarters?”[Senator Warner: laughs]  “No!”

Senator Warner: Amen! [Niki: It's not!]  Amen, amen! 

[both chuckling]

Niki: Yeah, it's not! 

So, let's quickly chat you, we've talked about China. We've talked about the importance of chips and making sure that we're leaders in that, making huge investments, which I agree with in AI, and sort of getting on the leading front foot on a lot of these innovations.

One thing that I know you, sort of, it stopped me in my tracks a little bit to see the headline. You said that there was one thing Donald Trump was right about and it was TikTok. So, I'd love to talk a little bit about TikTok and what you see as potentially a national security concern and how the government should address it, because people, Americans, love TikTok. Young Americans love it. What do we do? What do you think? 

Senator Warner: Wow!  Great question and, and remember, this is not the first time we've had to grapple with this. I remember being on the Intelligence Committee and reading about Kaspersky, the Russian-based software firm that was clearly a national security risk. And we were selling it on GSA the, the government's preferred vendor site. It took years to get Kaspersky off.  Huawei, y’know, which is the wireless provider. Huawei is, is a, if you, you wanna have a really scary overlay, and this is in the public domain,  if you look at where Huawei has sold their equipment and where our intercontinental ballistic missile sites are, it's almost a complete overlay.

And, and that if it doesn't scare you, it should!  

Niki: I did not know that! That was chilling. 

Senator Warner: I mean, it's pretty chilling, and you'll, why we are out now spending a lot of money in what's called rip and replace. We're actually literally taking the equipment out because that call that routes from St. Louis to Los Angeles, it routes to Beijing and chances are people might be scraping your data. 

TikTok, I was, y’know, again, it's, it, it was hard for me to acknowledge, but Donald Trump was right, and at first, I didn't fully appreciate what I think are the dual threats coming outta TikTok. On one level, there is the fact that this data is being collected and as you said, Niki, one of the things that's fairly remarkable, I mean, the guesstimate are a hundred million active users in America, 65 million of which are active users in a level of 95 minutes a day. That's like holy heck. And there is an enormous amount of data that is being, that is being collected, maybe not as much as Facebook but still, even though TikTok, which is owned by the Chinese holding company by ByteDance, says that American data is protected we have seen press report after press report that Chinese engineers are still getting access to this. 

And remember, Chinese law, as of 2016, dictates, dictates that any company, at the end of day, has to follow the orders of the Communist Party. Not be loyal to their shareholders, not be loyal to their customers. They have to follow the dictates of the Communist Party of China in [Niki: Meaning, sharing data!]  So, that data, no matter how it's said is being protected, is vulnerable. 

That is a, is an easy-to-understand concern, but the concern that almost that, that, again, we've been late to fully appreciate that I think is equal or even greater to greater than which is TikTok is really a communications medium. It is a network. If you are Left in this country, you like MSNBC. If you're Right in this country, you like Fox. With TikTok, why say it's a network? TikTok leadership does not, y’know, create the videos, but the algorithms that drive TikTok, that drive what you see, is very much determined by the company.

And the greatest example of that is the TikTok that young Chinese people see inside China has videos the algorithm drives it towards science and engineering, towards being a good, y’know, a, a good citizen. Totally positive reinforcing messages. Y’know, unfortunately the, the TikTok that a lot of our kids see is like crack, y’know, with kids, does not support the best, y’know, goal.  

I'm not saying everything on TikTok is negative. There's a lot of creativity on TikTok, but I, I am very concerned that the Communist Party in China could say, “Well, we on TikTok, we don't wanna show videos anymore that are at all critical of China. And, matter of fact, we may wanna skew a little more of these videos to also, y’know, say not very nice things about the United States.”

This is, while we acknowledge that it’s popular, remember the Armed Forces, our military, has said they will not allow TikTok on active duty service people's devices. We've now seen a number of states move in the same direction. The United States Congress, in a bipartisan way, unanimously passed to say, “We don't want TikTok on federal employees’ devices.”

So, this is a, this is a real issue and a problem. And, I think we've gotta sort through it. I've given the Biden administration about two years. They say, “Hey, there's a tech, there is a technology way to fix this.” My patience is going to run thin. We've not seen a, a technology way to fix it. So I am looking at, at some legislation, that might not invite retaliation, but I, I think we need a frame. And my, my hope is in the next couple of weeks, I'll be able to put out some ideas. And again, this is broadly bipartisan. Senator Rubio, my partner on Intel, has already got legislation. Mike Gallagher, the Republican member from Wisconsin, heading up our Special Committee out of the House on China, has got some legislation.

So, I do think there's a way to sort through this, but it's, I also recognize that we have to make the case so that it doesn't appear arbitrary to literally the millions of young Americans who are pretty, pretty dependent and really love their TikTok accounts. 

Niki: They do! So I know we're closing out, but just to recap what you said. So, in addition to the data collection, the facial recognition, the data it could be pulling off your phone that, that the company is required to share with the Chinese Communist Party. Setting aside just national security,  [Senator Warner: Yes] users in the United States are spending 95 minutes a day on an app making their brains into gummy bears,  [chuckling] potentially.

[Senator Warner: laughs] 

That alone seems like not super healthy. And one thing I think is interesting is it leads with the “for you” page. Whereas on Instagram, you go to the people you follow first; on TikTok, you immediately go to what the algorithm is pushing, which to your point, it's a communications network. It could be used for propaganda.

Senator Warner: Amen. And Niki, you, you absolutely, you said it, y’know, in a shorter version than me. I guess that's why I'm still the politician, it takes me too long to say things!  But it's, I don't think most policymakers have thought that through. I don't think most parents have said, “Well, this is harmless. Kids get to do videos and dancing or fun things.” Y’know, this is an extraordinarily powerful tool, and I'm not saying right now that the CCP, the Communist Party of China has, y’know, is, is blasting out propaganda. 

But I will say this, I mean, I, the ability to do that-  And again, go back to the fact, look at what the kids in China are getting on their equivalent TikTok accounts versus what our kids are seeing.  That shows the power of the algorithms in terms of how they can drive certain content.

Niki: Yeah. Okay. Well, I am looking forward to your legislation. I know you're walking out the door. 

You're truly known for working across the aisle on tech solutions that are rooted in practical outcomes. So, we're delighted to have you in the Senate and thank you so much for coming on the show. 

Senator Warner: Well, Niki, thank you for having me and please have me back. There's lots more we can cover!

Niki: Yeah, we'll talk dark patterns. Another favorite of yours. 

Senator Warner: Very cool!

Niki: Thank you so much. 

Senator Warner: Thank you.


[music plays] 

Niki: Tune in to our next episode for a conversation with former Congressman and presidential candidate John Delaney- who also knows a thing or two about tech. We talk about his time in government and return to the private sector, where he is working on financing projects focused on decarbonization.  

As always, thanks for listening and subscribing to this pod.