Interview | India has got Data Bill right; it’s a sound framework: Microsoft vice chairman Brad Smith

Synopsis The Indian government has got the new Data Bill “right”, applying “strong protection” for personal data while allowing cross-border data flow, said Brad Smith, Microsoft’s vice chairman and president. ETtech Brad Smith, vice chairman, Microsoft (Photo credit: Ashwani Nagpal) The Indian government has got the new Data Bill “right”, applying “strong protection” for personal data while allowing cross-border data flow, said Brad Smith , Microsoft ‘s vice chairman and president. In an interview to ET, Smith, the second-ranking executive (after chairman and CEO Satya Nadella), called artificial intelligence the greatest advancement for human thinking since the invention of the printing press.

Edited excerpts. What are your preliminary thoughts about the data protection bill? I would affirm what I said a year ago. It was more important to get it right than to go fast.

And the government has gotten it right. It’s applying strong protection for personal digital data. It’s focused on the kinds of consent requirements while at the same time it allows data to cross borders, which is important because India serves the world in terms of data.

‘India Better Poised Today’ It was smart to focus on personal data and not all kinds of data. Everyone will now focus on what comes next, which is the implementing regulations and with all such laws, there are a lot of details to come. It’s a very sound and strong framework and consistent with international standards.

What are your broader views on this entire overhaul that India is undertaking when it comes to regulations that impact technology companies? I would start with where India stands in the world when it comes to technology, especially AI, because that’s been the most significant change in the last 12 months. In many ways, India is even better poised today than before. This whole focus on digital public goods and digital public infrastructure is gaining momentum around the world.

The refinement of the concepts in the past year reflects that the conversations that have been taking place with other governments are yielding early interest that has real potential. So India has more opportunities to take its technology around the world. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Secondly, the skill base here is continuing to grow at an aggressive rate.

There is a greater recognition around the world of the demographic changes and the challenges that the rest of the world is facing. India has an abundance of the most important natural resource in the world —people. People who are younger and are entering the working age population, people who are learning engineering and other skills, that works well.

We have seen a spate of layoffs by large technology companies. What are your thoughts on whether the world is going into a recession and what does it mean for Microsoft? In hindsight, the pandemic was a bit of a bubble for the tech sector. At the time, everybody thought it was accelerating growth that would continue at this accelerated rate.

So we went up and then we went down and now we’re levelling off. For a company like Microsoft, say between 2015 and 2020, each year, on average, our revenue grew 14-15%. It went up to 20%.

It came down to single digits. Now, it’s coming back. I would hope that we’ll get back to something like the growth rates we had between 2015 and 2020, with perhaps some AI upside.

We’ll see but that’s the opportunity we have to pursue as a company and even as an industry. But AI is more capital intensive, the amount of money that’s being spent on infrastructure, GPUs, CPUs, energy, fibre, buildings, everything (is huge). Which means that capital costs will probably grow much faster than the costs related to people.

But I’ll always argue the people matter hugely. We need great people. We had this most difficult period in our rear-view mirror now.

We still grew the number of employees to 16,000 in the India engineering teams. But we’re going to see the people’s side grow more slowly than the capital side. And we’re going to really have to focus on how we upskill our people.

That to me will be a hugely important priority. India so far has not taken a stand on AI regulation. What would be your recommendations? There is an opportunity to start to think about how some of the global examples can be transposed into something like the Digital India Act.

But there’s a broader opportunity that will take centre stage in the latter half of this year. One of the more interesting moments in the year was when the European Union and the United States said they wanted to pursue a voluntary code of conduct that would be adopted by the G7 countries plus India and Indonesia. And that is an unusual and perhaps even unique opportunity globally and for India.

Because a voluntary code can move more quickly than legislation at the national or global level. It puts India in a position to exercise influence, especially coming out of the G20 presidency. And that by fashioning some common ground at such an international level, it can lay the blueprint for what India can choose to implement nationally as well.

Has AI infusion helped Bing gain market share against Google? Bing has gained a little and ChatGPT has gained a little. You’ll see some more opportunities. But at some level, we’re still pretty GPU constrained.

Overall, it hasn’t been the number one priority of our allocation for GPUs. That’s actually been for Open AI to deploy and develop its models and the like. I’m very optimistic about what it brings to search.

And we have a long way to go in addressing that opportunity. Google is like an old habit that dies hard. What makes it tougher is that Google has agreements with a company like Apple that continue to lock down the search default on every iPhone on the planet.

But we remain very bullish about what intrinsically it means for the future of something like search to make it better for people. What does AI mean for a country like India which has abundance of talent yet shortage of jobs? In some ways, AI could bring more benefits to a country like India or the global south than some of the countries that are the more advanced economies in the OECD. It’s the greatest advance for human thinking since the invention of the printing press, and the printing press profoundly made knowledge more accessible to more people.

AI can do the same thing. Think about what it does for a country that speaks many languages, and for its ability to translate. Think about what it does for a country where not everyone is literate, and the ability to speak and get answers.

Think about what it can do for a country where there is more diversity in educational levels or a country where people may know that there’s a lot of scientific data in English, but not everyone speaks English. All of these things are tremendously important. How can India strike the right balance between the threat and opportunities presented by AI? The broad goals for India would be to use this technology quickly and broadly.

You’ll overcome the skills gap; spread the skills that people will need to use it for. Also, build the guardrails so that it’s used safely, securely, and responsibly in a trustworthy way. And now when you come to these new pieces of legislation, this is a good time to think about how to incorporate them.

How are we placed with the Activision Blizzard deal? Hope it’s on the horizon. We’ll see in the coming months, but I’m hopeful that we’ll follow a path that is open to us. If the UK approves this, we have a real opportunity to close this deal by the middle of October.

It’ll be good for our gaming business. We’ve had our successes in gaming. But if it’s a three-product console market, we’re a distant third.

If it’s a two-product console market, we’re an even more distant second. We’ve been focusing on having more first-party games and games in the mobile space. That’s how we’ll build a healthy and innovative gaming business for Microsoft for the future.

And what I like about how we’ve addressed the concerns that regulators have had, is that we’re partnering with even more companies than before. And this week, it’s about this new agreement with Ubisoft in France and how they will play this indispensable role in helping us bring these games to cloud streaming. What are the kind of things you are doing in India? Microsoft India does a little bit of everything because it’s such a large base that you name the product, and there’s probably some element here.

What I’m most struck by in some ways is what we’re doing in AI. One is both on the research side with Microsoft Research and Bangalore and on the IDC, India Development Center side. There’s a lot of work going on here, including figuring out how we can better tune and develop and deploy AI models with GPUs, with efficiency and the like.

There’s another thing that is unique here, which is developing the technical know-how to better use AI across multiple languages. And this is an extraordinary place to do that. So what are your expectations of Microsoft India, it’s also seen a lot of leadership changes, especially at the senior leadership level.

India is continuing to play a more important role for Microsoft and it will continue to play a more important role. It is the second most important country for Microsoft after the US, when it comes to the development of technology. It’s grown from last year to this year and it’s going to continue to grow in some ways, because it’s just an extraordinary source of growing talent.

We know that we can hire talented people. Geopolitically, India has maintained a level of trust with the rest of the world to a degree that few countries have managed to emulate successfully. And so it makes it more attractive.

We have been fortunate to have great leaders here. Some of them grew up here and then joined Microsoft in the US. And obviously, Satya is example number one.

But you take somebody like Anant (Maheshwari), I’m enormously fond of him and appreciative of everything that he did for us here. We’re really fortunate now we have another great leader coming in. It’s election year for India and there are concerns about deep fakes and misinformation being accelerated through AI.

What kind of regulatory regime can deal with it? The year 2024 is a year with elections in India, the US, the UK and the European Parliament. You put those four together, and you’re talking about a very significant share of democracy. Even before the fakes, we should worry about the deliberate spread of falsehoods, either by domestic or foreign groups.

Let’s recognise that we’re not winning the war against fraudulent content on the internet today. And I look at AI as a tool to help us find bad actors. It’s a defensive as well as an offensive technology and we need to make the most of that.

Will AI be used much more in medicines and biology, physics labs? How do you see that changing, going forward? AI will be infused in everything. And it will touch every academic or intellectual endeavour, it will impact every area of the economy. Think about what it means for biology or chemistry or physics for research.

It will accelerate drug discovery and things like cancer detection. Companies will think about what it means for their core line of business. It should accelerate productivity across the board.

It should help creative people become more creative. But it will require that everyone who is a critical thinker today remain a critical thinker in the future. People are going to find that it makes them better.

How do you see this demand for AI contributing to Microsoft’s revenue and share prices in the medium term? Number one, this is an extraordinarily exciting time for our industry. This may well be the most important technological advance of any of our lifetimes and we were in a very good position to jump on it for a couple of reasons. One is that fundamentally this requires the cloud infrastructure that we have built in order to succeed.

Second, it involves good fortune and by design, I’ll say smart bets that we made as a company in partnering so closely with OpenAI, and also augmenting the support for others as well. Third, quite possibly more than any other year in my three decades at Microsoft, the company has moved so quickly to adopt this technology and really infuse it in every first service we offer. So we’re in a very good position.

Now at the same time, one’s best served by being humble. Companies are more likely to make mistakes when they become overconfident. And we should recognise we have very formidable competitors.

Google is a strong company in this space, AWS is forging global partnerships. There are global startups that nobody has heard of but are becoming household names in the startup ecosystem like Anthropic and Inflection AI. It’s a good time to be Microsoft but we keep our eyes open.

Romita Majumdar contributed to this article. Don’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp. click here! Print Edition Monday, 28 Aug, 2023 Experience Your Economic Times Newspaper, The Digital Way! Read Complete Print Edition » Front Page Pure Politics Companies & Economy Disruption Learn more about our print edition More Ecomm, FMCG Demand for EVs in Superfast Lane Demand for electric vehicles (EVs) by ecommerce companies and consumer goods makers of daily essentials has doubled from last year as they look to save costs by over half and meet carbon emission reduction targets, executives said.

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In an interview to Surabhi Agarwal & Bodhisatva Ganguli, Smith, the second-ranking executive (after chairman and CEO Satya Nadella), called artificial intelligence the greatest advancement for human thinking since the invention of the printing press. Read More News on brad smith india data bill microsoft personal data Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.

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