Microsoft president Brad Smith learned to work with DC Now, a brewing debate over AI regulation is putting his well-worn playbook to the test.
Updated May 25, 2023 at 12:01 a.m. EDT|Published May 25, 2023 at 9:00 AM EDT
But the prophecy was correct. As if on schedule, Smith convened a group of government officials on Thursday morning, members of Congress and influential policy experts for a speech on a debate he has long anticipated. Smith unveiled his “blueprint for public governance of AI” at Planet Word, a language art museum that he called a “poetic” venue for conversation about AI.
Rapid advances in AI and the rising popularity of chatbots like ChatGPT have prompted legislators around the world to grapple with emerging AI risks. Microsoft’s $10 billion investment in ChatGPT’s parent company, OpenAI, has thrust Smith firmly into the center of this madness.
Smith is currently drawing on years of preparation. He has discussed AI ethics with leaders ranging from the Biden administration to the Vatican, where Pope Francis warned Smith to “preserve your humanity.” He recently consulted with Senator Majority Leader Charles E. Schumer, who has developed a framework to regulate artificial intelligence. Smith shared Microsoft’s AI regulatory proposals with the New York Democrat, which “has pushed him to think harder in some areas,” he said in an interview with The Washington Post.
His policy wisdom helps others in the industry, including Sam Altman, CEO of OpenAI, who consulted with Smith as he prepared policy proposals discussed in his recent congressional testimony. Altman called Smith a “positive force” willing to offer short-term advice — even to naive ideas.
“In the nicest, most patient way possible, he’ll say, ‘That’s not the best idea for these reasons,'” Altman said. “‘Here are 17 better ideas.'”
But it’s unclear whether Smith will be able to sway cautious lawmakers amid a flurry of burgeoning efforts to regulate AI — a technology he compares to printing presses in potential, but which he says carries catastrophic risks.
“History would say that if you go too far in slowing adoption of the technology, you can hold back your society,” Smith said. “If you let technology move forward without guardrails and throw your responsibility and the rule of law to the wind, you will probably pay a price that is much higher than what you want.”
In Thursday’s speech, Smith supported the creation of a new government agency to oversee the development of AI, and the creation of “safety brakes” to rein in AI that controls critical infrastructure, including the power grid, water system and city traffic flows.
His call for stricter regulations on a technology that could shape the future of his company may seem counterintuitive. But it’s part of Smith’s widely used playbook, which cemented his reputation as the de facto ambassador of the Washington tech industry.
Smith has been pushing for legislation for years, portraying himself as a rare tech executive who is considered reliable and proactive by policymakers. He advocates stricter privacy laws, restrictions on facial recognition, and stricter repercussions for social media companies — policies that sometimes benefit Microsoft and hurt its Big Tech rivals.
Other companies seem to be taking notes. In the past month, OpenAI and Google, one of Microsoft’s biggest competitors, unveiled their own visions for the future of AI regulation.
But Microsoft’s embrace of ChatGPT catapults the 48-year-old company, along with Smith, to the center of a new Washington maelstrom. He also faces battles on multiple fronts in the United States and abroad as he attempts to complete the company’s largest-ever acquisition, that of gaming giant Activision Blizzard.
The debate marks a career-defining test of whether Microsoft’s success in Washington can be attributed to Smith’s political acumen — or to the company’s distance from technology’s most radioactive policy issues.
The proactive calls for regulation are the result of a strategy Smith first proposed more than two decades ago. When he applied for Microsoft’s top legal and policy position in late 2001, he presented a single slide to the executives with one message: It’s time to make peace. (Businessweek, since bought by Bloomberg, first reported the slide.)
For Microsoft, which had developed a reputation as a corporate bully, the proposal represented a major change. Once Smith landed the top job, he settled dozens of cases with governments and companies that had accused Microsoft of alleged anti-competitive tactics.
Smith found ways to ingratiate himself with lawmakers as a partner rather than an adversary, drawing hard-won lessons from Microsoft’s relentless antitrust battle in the 1990s, when the company engaged in protracted legal battles over allegations that it held a monopoly on personal computers.
The game paid off. Four years ago, when the Silicon Valley antitrust investigation was building, Microsoft was not a target. Smith instead served as a critical witness, helping lawmakers build the case that Facebook, Apple, Amazon and Google engaged in anti-competitive, monopoly tactics to build their dominance, said Representative David N. Cicilline (DR.I .), who chaired the House Judiciary antitrust panel that led the investigation.
Smith acknowledged that Microsoft was a “better company, a more innovative company” because of the clashes with Washington, Cicilline said. Smith also proactively adopted a number of policy proposals proposed by lawmakers that other Silicon Valley companies aggressively lobbied against, he added.
“He offered a lot of wisdom and was a very responsible technology leader, very different from the leadership at the other companies surveyed,” said Cicilline.
Smith has particularly deployed this reconciliation model in areas where Microsoft has much less to lose than its Big Tech competitors.
In 2018, Smith called for policies requiring the government to obtain a warrant to use facial recognition as competitors such as Amazon aggressively pursue government contracts for facial recognition. In 2019, he criticized Facebook for the impact of foreign influence on its platform during the 2016 election — an issue that Microsoft’s corporate social network, LinkedIn, largely failed to address. He has said Section 230, a key law that social media companies use as a shield against lawsuits, had outlived its usefulness.
“I’ve interacted with executives in a number of industries over the years and I’ve found Brad to be thoughtful, proactive and honest, especially in an industry prone to clouding,” said Sen. Mark R. Warner (D-Va .).
But as Microsoft moves into Washington’s crosshairs for the first time in decades, Smith’s vision is once again put to the test. Despite a global charm offensive and a number of concessions designed to encourage competition in gaming, both the U.K. Competition Authority and the U.S. Federal Trade Commission recently filed a lawsuit to block Microsoft’s $69 billion acquisition of Activision Blizzard .
Smith struck a new note the day the FTC decision came down.
“While we believed in giving peace a chance, we have complete confidence in our cause and welcome the opportunity to take our case to court,” Smith said in a statement. The company has appealed both the UK and FTC decisions. Smith said he continues to look for opportunities where he can find common ground with regulators who opposed the deal.
As Microsoft geared up for regulatory oversight of the Activision Blizzard deal, Smith traveled to Washington to talk about how the company “adjusted ahead of regulation.” He announced that Microsoft would pass a series of new rules to boost competition in its app stores and supported several legislative proposals that would force other companies to follow suit.
On Thursday, he again tried to stay one step ahead of concerned policymakers in Washington. Smith delivered Thursday’s speech in the style of a technology company demo day, where executives theatrically unveil new products. There were more than half a dozen legislators in the audience, including Representative Ted Lieu (D-Calif.), who has used his computer science background to position himself as a leading AI policymaker, and Representative Ken Buck (R-Co.) , who led the antitrust investigation of technology companies with Cicilline.
Smith suggested the Biden administration could quickly promote responsible AI development by passing an executive order requiring companies selling AI software to the government to adhere to risk management rules developed by the National Institute of Standards and Technology, a federal laboratory that develops standards for new technology. (Such an order could favor Microsoft in government contracts, as the company promised the White House it would implement the rules in the summer.)
He also called for regulation that would cover multiple levels of the “tech stack,” the layers of technology ranging from data center infrastructure to applications that enable AI models. Smith and his Microsoft colleagues have long made education an important part of their policy strategy, and Smith has focused on educating lawmakers, members of the Biden administration and their staff in recent one-on-one meetings on how to the AI technology stack works. Natasha Crampton, the company’s head of Responsible AI, said in an interview.
Smith, who has been with Microsoft for nearly 30 years, said he sees AI as the most important policy issue in a career that has spanned policy debates on surveillance, intellectual property, privacy and more.
But he clearly sees more political obstacles ahead for Microsoft, saying in an interview that “life is more challenging” in the AI space as many lawmakers around the world simultaneously consider new technical regulations, including on the field of artificial intelligence.
“We’re dealing with questions that don’t yet have answers,” Smith said. “So you have to expect life to get more complicated.”