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- [00:00]
Host
Is the United States at risk of losing its technological edge as it cracks down on university research funding, pushes away international students, and falls behind China in some key disciplines? Let's talk about it with former Secretary of State and Hoover Institution Director Condoleezza Rice, who's here with us in studio at Stanford today. Secretary Rice, welcome to the show.
- [00:25]
Condoleezza Rice
It's a pleasure to be with you.
- [00:27]
Host
So we find ourselves in an interesting moment right now. The US has long been viewed as the leader in technology, but you look at China, they're the leader in battery technology, the leader in EVs. You can make an argument that they're leading in humanoid robots, and they just came for our AI industry with deep seq. So is the US in danger of losing its lead to China right now?
- [00:48]
Condoleezza Rice
This is actually a really interesting story because I think we're seeing a pattern here. The United States will lead in innovation, lead in discovery, and then somehow we manage to lose that edge. So battery technology is an excellent example. We actually invented battery technology, and somehow now we've lost the lead. So I'm very interested in why this keeps happening. Some of it may be that the innovations are not ready for the market. They don't have a commercial value, and so they sort of fade into the background. They get picked up because we're very open about our innovation and our research. You can read it anywhere. And so China has done very well. American discovery and innovation and then creating a market for it. So it's something we have to be very careful about, because when you come to AI and I know we'll talk more about this, you're talking about what my friend Fei Fei Li calls the civilizational technology. And that would be very different than losing the lead in, say, battery technology. So you're onto something. Something does happen that we discover, innovate, and then we lose the lead.
- [01:57]
Host
Now, I think a lot of people will take issue with my first question. They'll be like, the US Is not in the lead or who cares? And it's not important. The US can develop technology, China can develop technology. So why do you think it's important the US Stays in the lead, and what are the consequences if it falls behind?
- [02:13]
Condoleezza Rice
Well, we're in an arms race in technology because there are many things about the U. S China relationship that are not adversarial. They are the two largest economies. We are going to have to find a way to trade together. But in security policy, we are adversaries. And I would say that's largely a decision that Beijing made. So as A result, the technology race is also adversarial at the high end. You know, I think one of the really kind of silliest statements that I made, or maybe I would say kind of a dumb speech, if you will, is when Xi Jinping said that they were going to surpass the United States in frontier technologies like AI and Quantum, and he gave a date within essentially 10 years. So what did he think was going to happen? We were going to get our backs up. We were going to start to think of it as an adversarial race. And I am one who believes that if somebody's going to win the race on these frontier technologies, it had better be a democracy. Because if something goes wrong in AI, and it's quite possible that something will. As a matter of fact, it's probable that something will. Maybe it's even predictable that something will. We will have investigative reporting. You'll probably be doing it on your show. We'll have congressional hearings. The Chinese will do what they did with COVID They'll hide it, they'll lie about it. And so an open society that develops these foundational technologies, these transformational technologies, I believe is simply safer for humankind.
- [03:46]
Host
Okay, but the Chinese are open sourcing their models and our labs are closed.
- [03:51]
Condoleezza Rice
Well, our labs are closed for commercial purposes. But I think when you look at the amount of work that is done at the frontiers of these technologies in universities, we publish just about everything openly. And as you know, many people saw Deep Seek coming because they were reading the literature, they were reading the open source literature. I'll tell you an interesting fact. Not a single AI specialist computer scientist that I know was surprised by Deep Seq, really. And every national security expert that I know was surprised by Deep seq. So that just shows that if you are following the research and you're following the research papers, maybe you'd know a little bit more than if you're a national security type.
- [04:37]
Host
Right? And speaking of research papers, I mean, it is the open transformer paper that came out of Google, which, by the way, founded by people who went to Stanford, who went to Stanford, who are here in Stanford.
- [04:46]
Condoleezza Rice
That's right.
- [04:46]
Host
That's what led to the beginning of this generative AI moment. So I want to ask you, what do you do? If you are determined to stay on top, what do you do? And I think that a lot of people have been talking about, you got to stop the exports of chips to China, the chips that these AI innovations are built on top of. And it's so interesting because we're in Silicon Valley, but it's a misnomer. It really should be called Silicon Design Valley, because where the silicon is made is in Taiwan. And if you put restrictions on China from taking this core material being made in Taiwan, I think the US Even believes Taiwan is or says Taiwan is part of China and says, you tells China you can't use these chips. You don't think that China is going to go invaders Taiwan to get them.
- [05:32]
Condoleezza Rice
Well, let me unpack that for a moment because I think there are several important points there. The first is that you asked how do we win? Or how do we deal with the fact that China is. We run harder and faster. That's how we do it, and we get out of our own way. I'll give you just one example, was talking to some people in the administration, the Trump administration, who tried to get a preemption on states having their own laws about AI, their own restrictions on AI. Can you imagine if you're a young AI company and you've got restrictions in Delaware and Texas and California, and they're all different. So we have to be careful that we don't just get in our own way and we have to continue to innovate and innovate quickly. I'm a national security type, so I continue to believe in restrictions of some kind, and I continue to believe that export controls can have a purpose in slowing what the Chinese can do. We know that the Nvidia chip, which was prohibited for sale in China, it probably slowed it, but we would be on a fool's errand if we think it's going to eliminate the ability of the Chinese to do these things. If we were going to stop Chinese indigenous development, we would have had to do that 10, 15 years ago before they really did develop the ability to innovate indigenously. But the first thing is get out of your own way and run fast and run hard. And secondly, when you speak of Taiwan, yes, it is a remarkable fact that this extremely important industry which we founded has ended up in a place that is vulnerable to China because China continues to believe that Taiwan is a rogue breakaway state of China. They want to reintegrate it. And Xi Jinping in particular is someone who has staked his entire historical claim, his personal historical claim, his place, if you will, next to Mao in the pantheon of Chinese leaders on what he's called the restoration of China, or ending the humiliation of China and putting back together those parts of China that were taken away by imperial powers. The last piece of that, really, from his point of view, is Taiwan. If you look at what they've done in Hong Kong, Hong Kong, which used to be, you may remember, it was one country, two systems. And Hong Kong was going to have all of these freedoms. Well, all of that has been wiped away in Hong Kong. And Hong Kong is now really just another province of China, except for some economic freedoms which benefit Beijing. But the politics is controlled by Beijing, the security is controlled by Beijing. That's what they have in mind, I think for Taiwan, not an all out invasion of Taiwan. An invasion of Taiwan would be like d day times 100. And I'm not sure that Xi Jinping really trusts his armed forces. You might notice that he keeps demoting generals. Generals keep kind of disappearing in the Chinese hierarchy. And so I'm pretty sure he doesn't really trust his military. But you don't have to invade Taiwan. If you're the Chinese, what do you do? You use cyber attacks, you cut underwater sea cables, you do what the Chinese are called currently doing. Very, very often militaries would call them denial exercises. So you look as if you're going to quarantine Taiwan so that it can't trade. Nothing can get in, nothing can get out. And Admiral Poparo, who is our chief in the Pacific, has said it's not an exercise, he said it's a rehearsal. So that's what we have to be careful about. And from the Chinese point of view, that's more effective because when would we react?
- [09:32]
Host
So let's talk about the first part of your answer. Before we got to export controls where the US will need to outwork the rest of the world. If you look at China, there is an intense work ethic. They have regulations, they have steep regulations. They have taken big tech CEOs like Jack Ma and effectively disappeared him for chunks of time. And still they've been able to push forward with some of the innovations that I mentioned at the beginning of our conversation. So what is happening in China from a work ethic perspective or what cultural values do you think they have or policies do they have that we can learn from here in the us?
- [10:11]
Condoleezza Rice
Well, I'm glad you said policies because I'm actually not much for cultural explanations. I've seen cultural explanations. These people have to work in a particular way. I usually find those explanations don't work. What does work is. Do you set up an ecosystem in which the incentives are such that you get the right output from your economy or from your workers? And there I'll say that it's been up and down in China. You mentioned what happened to Alibaba and Jack Ma? What happened to Tencent? China once led the world in online education startups. They shut all of it down. Why? Because the Communist Party, like all authoritarians, cannot tolerate the idea of alternative sources of power. And Jack Ma was showing up in Davos a little too much and he was getting a little too popular. And so I think there are inherent weaknesses in an authoritarian system. First of all, they try to do everything from the top down. We have the advantage of distributed innovation. You mentioned three, four companies that are trying to press the front edges. We're always going to have a more distributed approach to innovation and to research. And I, we think that's a very good thing and that's how we'll continue to lead. But we shouldn't underestimate that when it comes to not just copying, but kind of that next iteration from something maybe we've invented and then you iterate just the next step. That China will be very good at that. But I think authoritarian systems, top down systems, have their own, Marx once said, seeds of their own destruction.
- [11:58]
Host
I mean, we'll see what the results look like. But I think in history that's proven correct.
- [12:03]
Condoleezza Rice
You know, we can go back in history. We were very worried about something called Sputnik at one point. The Soviet Union did beat us into space, but ultimately the nature of that system, we sprinted ahead.
- [12:16]
Host
But that sparked a rush toward innovation in the United States. And you know, we're here in Stanford, you know as well as anybody that a large part of the root of our rush to innovation comes from the university system. Right now, the university system is under attack, especially research institutions. I'm going to read you some numbers. The Trump administration has frozen 2.2 billion in grants to Harvard. They have frozen a billion in funding to Cornell, 790 million to Northwestern. They're looking at Johns Hopkins, 3.3 billion. The list goes on. Are we putting our ability to innovate at risk if we kneecap this important part of the source of our ability to invent?
- [13:03]
Condoleezza Rice
Let me be the first to say universities have in some ways been their own worst enemy in a number of ways. I don't think universities reacted particularly well after October 7th. A lot of things happened on campuses that should never have happened. I also think that when it comes to freedom of speech and freedom of expression, universities weren't the paragon that we should have been for civic discourse around difference.
- [13:29]
Host
But the question is.
- [13:30]
Condoleezza Rice
So let me start there. I just have to lay that groundwork.
- [13:33]
Host
I totally hear you. And we'll talk about. Because I want to get into the Trump rationale.
- [13:36]
Condoleezza Rice
Yeah, but I'm not going to ask.
- [13:37]
Host
You to comment on Harvard in particular, but the leading tuberculosis researcher there had received an order from the federal government to halt her research. So if you think about what's happening across universities, is that the solution?
- [13:50]
Condoleezza Rice
That's, that's exactly my point, which is that even if universities have made these mistakes, and they have, we have to be very careful that we're not endangering something that is of high value to the United States. I would say irreplaceable value. Eighty years ago, we basically made the decision with Vannevar Bush's important white paper on this, that we were going to make universities the ecosystem, the infrastructure for fundamental research. And it was a really kind of brilliant idea. You would have the Defense Department and the Energy Department and the National Institutes of Health and the National Science foundation, which would come later to fund fundamental research in universities which were kind of cheap, actually, labor wasn't that expensive. And you would get two kinds of innovation from that, two kinds of breakthroughs. Some were commercializable and commercializable fairly quickly. And we saw companies come out of that. And some would have to wait a while until they proved their value. Now, you could say in the first case, maybe industry would be prepared to do that kind of work. But think about how long it took for work on neural networks to actually become the AI revolution that we're now seeing. Because it took the link between the research that started in the 40s and the 50s on neural networks, then the GPUs to be able to do it. And now you have this revolution in AI. And so sometimes you have to wait and commercial entities can't wait. And so having the fundamental research in universities, absolutely critical. And my concern is we don't have a plan B. If it's not going to be done in universities, where is it going to be done? At one point it was done in Bell Labs. But when Bell Labs became a cost center for AT&T after the breakup of the Baby Bells, Bell Labs went under and most of those people fled to universities where they won multiple Nobels. So I really hope, as we're looking at all the questions around higher education, that it will be recognized that fundamental research, scientific research, medical research, really the universities are the answer. I'd ask most people, when you have some exotic disease, don't you try to get to a university led hospital to take care of it? Because that's the front foot for American biomedical research. And you could go on and on. The founding really here of what became recombinant DNA, the discovery of stem cells and Google out of here. Hewlett Packard out of here.
- [16:40]
Host
Stanford's done. Okay.
- [16:41]
Condoleezza Rice
Stanford's done. Okay. And it's not just Stanford. I could give that list for most of the research universities in the country and not just the Ivies. But I'm from Birmingham, Alabama. The University of Alabama Birmingham is an amazing biomedical research center. Purdue is an amazing engineering center. So it's dotted throughout the country as well.
- [17:07]
Host
Right. I mean there's a great article by Jonathan Cole, who's the former provost and Dean of Faculties at Columbia. Just list the innovations we've gotten out of universities. I'm going to read them just because it's worth reading. Lasers, FM radio, barcodes, Google algorithm, the invention of the computer and the iPhone, cures for childhood leukemia, the Pap smear, crispr, the electric toothbrush, Gatorade, the Heimlich maneuver and Viagra. Apparently he felt necessary to list that. But that is a track record of everything. That many of the things that you think coming out of the United States, it happens in universities.
- [17:45]
Condoleezza Rice
It does. And there's another piece to it. Of course we train the next generation as well in PhDs that come through these universities and then go on to become faculty or go into industry. A lot of them actually go into industry from the PhD programs. And so they, and these research universities are really a kind of gold standard internationally. It really has set the United States apart in terms of the way that we do this in continental Europe. They teach in one place and they do research in another. At a place like Stanford or any of these universities, you can walk across campus and you've got the really brilliant young 18 year old and you've got the Nobel Laureate in the same body. It's really something we have to protect.
- [18:34]
Host
Going back from China, going back to China, this is still coal. In the past quarter century, investments by China in higher education have become similar to those in the United States and has increased the building of new research oriented universities to compete with us in STEM fields. It seems like the rest of the world is catching on to the US secret sauce. You're seeing the investment in China and of course, as we're having restrictions of people to be able to do their research in the United States, Europe has extended the hand and said, come do it here.
- [19:04]
Condoleezza Rice
I still think we'll win on the battle for talent. If we don't say to people, you aren't welcome, they're going to find the place that it's best to do this, because these researchers are driven by a sense of mission to do their work at the highest levels. And it's still the case that you do the work at the highest levels in the United States. But yes, too long of sending talent or rejecting talent and having it go other places will really pay the price. I'll also say that I'm a big believer in controlling your borders. I'm a big believer in that We've made a lot of mistakes over the last few years in losing control, particularly the southern border. And I want to see that remedied. I hope that when it comes to bringing talent to the United States, we will recognize that we don't train enough engineers. We really need H1B visas to get people to come here. If you look at the number of founders of these high tech companies, awful lot of immigrants in that group. So we do have a kind of secret sauce. And maybe it needs a little adjusting here and there. But let's remember what's gotten us to where we are.
- [20:20]
Host
Okay, I'm going to get to some of the numbers that we're seeing with international students in a moment because it's not pretty and we should discuss it in more depth. But let me ask you, why do you think this is happening? I'm going to give the Trump administration's rationale in a moment. But just from a philosophical level, how do you get to the point where you start to see university funding as something you can pause? It's almost as if you haven't seen enough or you're too detached from their innovations to think that it's something that you might want to stop.
- [20:51]
Condoleezza Rice
I've been a university professor for more than 40 years. They hired me when I was 11. I just want that to be understood by your audience. But I think universities have become detached from society and from reality as well. And so it's not just. It goes a little bit both ways. What do I mean by that? Clearly, we haven't made the case very well for what we do. Maybe it's that people take for granted some of the innovations that have come out of universities. But if you walked and asked even a very highly educated member of the attentive public about how the research system that we just described worked, they probably wouldn't know. So maybe we shouldn't take that for granted anymore. Maybe we should make it clear why this is happening. Secondly, I do think that universities and elites sometimes have looked down on people who, quote, weren't their own kind. I Do think that the stories that come out about the running down of American values, American institutions, America is too racist. America's, you know, people get tired of that and they don't like the attack on their country and they don't like the attack on their culture. And unfortunately it's become a little bit associated, it's become a lot associated with elite universities. So I would say to us, let's look in the mirror a little bit too.
- [22:17]
Host
Well, I'm glad you brought that up because one of the things that I really struggled with before applying to university, applying to college, was the cost. And I came out tens of thousands in debt and I was lucky. And if you look at the costs of what it takes to go to university today, it's out of control. So in the 60s, this is, according to the national center for education statistics, 12,000 a year for a private four year college. Now it's 35,000. So you could come out maybe with 40. And this is in today's dollars. So coming out with like $30,000, $40,000 in debt, manageable, coming out with $100,000 or $200,000 after the interest is not manageable. In fact, we're actually capping the amount of money people can take out for a loan. I think that just changes the composition of the university and it changes the composition of the elite. The elite becomes solidified. It's the same people coming from the same rich families that never have any contact with people who are in a different social class from them. And as much as we're dividing in our country based off of any number of characteristics, we're falling apart because we don't speak to each other in terms of class. So how can we fix that?
- [23:34]
Condoleezza Rice
Well, I agree with you. I never thought I used to study the Soviet Union and class conflict. I never thought I would see what I think is kind of class conflict or class division in the United States. And I will say that universities that are well endowed have made an effort to use that endowment to make it possible on what's called need blind, you apply and if you're good enough to get in, we'll find you a way to go to school. And so some 20% or so of the student population in a place like Stanford's first gen. So these are kids whose parents, nobody else went to college. And I've always said when I can stand in front of a class and one child is the child of an itinerant farmer and the other is the child of a fourth generation legatee, I Feel pretty good about what universities are doing. But it's not just that they are expensive. And I'll come back to why they're expensive. I was provost of Stanford, I was the budget officer. I understand why it's expensive. But I will say not every kid should go to college because many of them don't want to go to college. They would be just as well with it.
- [24:47]
Host
Not that everybody needs to go, it's that it's unavailable for a large part of the population.
- [24:51]
Condoleezza Rice
But if you want to go to college, you ought to have the ability to go. And that's why I think financial aid and making it possible is so important. But if you're going to take down tens of thousands of dollars in debt and you would have done just as well with a two year degree and a skill, then maybe we ought to start value people who work with their hands. You've heard a lot about how we need shipbuilding, we need manufacturing back in the United States. We don't even have the skills. We don't have the welders and the electricians to do that. Why don't we value those people as much too? And that's part of that class division that we're talking about.
- [25:28]
Host
Well, they're not going to get automated by ChatGPT, so.
- [25:31]
Condoleezza Rice
Well, they're not. But a lot of white collar people are going to get automated. Those jobs might be the ones that might be there. They just have to be trained for them. But I wanted to make one other point about the divisions. We don't know each other very well anymore.
- [25:43]
Host
Correct.
- [25:44]
Condoleezza Rice
And I have been wondering about ways to remedy that. When the election took place in 2016 and Donald Trump won, I actually had colleagues who said, you know, maybe I should travel and see what those people in Alabama think. And I thought, you know, if you have to do an anthropological dig on your fellow citizens, we have a problem. Was a weird, cliche, really bizarre reaction. So the military used to be a place that people went from a lot of different backgrounds. Now that really isn't true. I'm a fan and a believer in national service. Even if it's voluntary national service. It doesn't have to be the military. It could be the Peace Corps, it could be any number of efforts. I like teach for America because I have some kid who's from Pacific Heights who's going to go work in the Mississippi Delta. We just do need ways to get to know each other better. We've lost that as a country. And no democracy can ultimately survive and prosper with those Kinds of divisions. And finally, the educational system is reinforcing class differences because I can look at your zip code and tell whether you're going to get a good education.
- [27:00]
Host
Right. That's the number one predictor of wealth.
- [27:03]
Condoleezza Rice
That's a real problem. And so whether it's by giving parents choices through school choice and vouchers or improving public schools. Schools. We'd better pay attention.
- [27:15]
Host
Yeah. The Trump argument, as the New York Times captures it, that universities turned into bastions of leftism, hostile to conservative thought and lost the trust of the American people. Elements of that might be true, but again, if you're only going to admit a selection of the population, you're going to get uniform thinking. And I thought if you're going to think about withholding federal funding, maybe it's not research, maybe it's other forms of federal funding require the universities to not increase their tuition, not increase their fees more than inflation. Why is that so hard? Why can't that.
- [27:47]
Condoleezza Rice
Well, as a budget officer, I would have loved to not increase tuition, and I think actually increased tuition increases moderated for quite a long period of time. But do you know why it's expensive to run a university like this?
- [27:59]
Host
She has an idea. Yeah, I mean, you're not going to give the same answer as I am, but I, I think that we have had a increasing runaway bureaucracy that is running universities. We pay so much money to people who are, excuse me, but pushing paper and not teaching and, you know, other amenities, because there's this sort of arms race between schools to offer things, and then you end up looking at a tuition bill that's out of control.
- [28:25]
Condoleezza Rice
Well, that's part of the story. And I'm a big believer that you need to cut administrative bloat. But let me, you know, when I get a federal grant, for instance, do you know what the reporting requirements are like on a federal grant?
- [28:36]
Host
That's why the administration is.
- [28:37]
Condoleezza Rice
And that's why administration goes through. So I would trade the federal government 11 points on what's called the indirect cost recovery. In other words, the overhead that the government pays. I trade 11 points if you don't make me report to the degree that you do. And another problem is students expect a lot these days. So when I first became provost, we had what are called Internet cafes, right. So you sat down in the basement and everybody could use the. Do you know what a kid would think today if they walked in into a dorm room and there wasn't access for their computer? So the costs have gone up, expectations have gone up, but I'd be the first to say universities need to control costs.
- [29:18]
Host
Yeah, it's called learned helplessness. Right. You teach them that this is what they should expect and they can't do anything else. And let's just go back to the consequences here, because assuming that the funding does get withheld for a long term, we could see again, a harm in our ability to innovate. And the innovations coming out of China that I read in the beginning of this conversation were before any of this happened. Is it surprising to you that it's Republicans who are traditionally pro business are seeding what could be the roots of a decline in business because they're kneecapping the university?
- [29:56]
Condoleezza Rice
Well, I think a couple of things are happening. People, some people are angry about the kinds of things we've been talking about. And universities become then a kind of easy mark because they have made so many mistakes. I also think that, again, there's something of an educational mission here to really draw the line from that funding, that federal funding for university research to where we are as a country in terms of innovation. When I go to the Hill to talk to people, there are certainly any number of senators and congresspeople who understand that and they are trying to hold the line. People are also looking for money in these budgets to be. To be really clear about it. Right. So some of the cuts are coming because people are just looking for money because you can't cut entitlements. So you find these smaller ways to do it. But I've been a voice for. We really, really have to recenter ourselves on how important the innovations that came out of a very smart, specific system that we created 80 years ago. And I just want to repeat, we don't have a plan. So we really do have to make sure that we're adequately funding federal research. And it's not, by the way, just biomedical or engineering or what happens here in the Valley. But a lot of defense capability is going to be dependent on what we do in terms of innovation as well.
- [31:22]
Host
Right. And you would think that if anyone would know that it would be folks in tech. And I think it is notable that you're making these points on a technology podcast.
- [31:32]
Condoleezza Rice
I'm doing that because I really want to speak to that community. We've done something at the Hoover Institution along with Stanford. It's called the Stanford Emerging Technology Review. And the whole purpose of it, I co chair it with the dean of engineering at Stanford, Jennifer Whittem. And the idea is that we need to help policymakers understand what's coming on the horizon in terms of frontier technologies. But in order to do that, but we have to have the scientists who are really in the labs, at the bench to help us understand these technologies. And then they need people like us who understand policy and institutions to help those institutions understand what those technologies are doing, what the challenges are, what the upsides are, what the downsides are. And that's what we're trying to do. So that's why I'm on your podcast. In addition to the fact that. That a lot of people like your podcast.
- [32:29]
Host
Yeah. We cater to a larger audience than just tech.
- [32:31]
Condoleezza Rice
Just tech.
- [32:33]
Host
So of the people in the tech world that supported the president and have been behind his agenda up until recently was Elon Musk. Can Elon Musk's third party work?
- [32:44]
Condoleezza Rice
Oh, I don't know. I'm a specialist on international politics, not American politics. And I always remind people you're the Secretary of State. Yeah, but that does international politics. Remember, a lot easier to. To figure out that I am a great fan of great entrepreneurs and people who have pushed the envelope. We have a lot of them here, including Elon Musk. Politics is a strange business, and it doesn't look like. It doesn't actually look like industry. It doesn't actually look like business. It doesn't innovate very quickly at all. And sometimes there's a little bit of a clash between the Valley and the way that Valley thinks about things and the way that Washington thinks about things. We do what we call these programs where we bring together the tech people and government people and we try to help them speak the same language.
- [33:46]
Host
How's that going?
- [33:48]
Condoleezza Rice
You know, we're getting people who speak the same language a little bit, but it just shows that what you can do in the Valley, what you can do in business, you can't always do in the political space realm. The political realm. The government has functions that businesses don't have, has many, many, many more veto groups and many, many more constituencies that have to be taken account of. My solution to a lot of our problems in Washington is to look to where the founding fathers looked, which is not to Washington, but what's happening in the states and the localities. Because there you really do get governance that's closer to the people. And if you start to feel bad about democracy sometimes, go to a city or go to a state and watch what's happening there and it'll rejuvenate your belief in democratic institutions.
- [34:36]
Host
Oh, definitely. I mean, maybe I'm a coward for this, but when I thought about which type of reporter I should be. The local reporter was always the scariest one because you're reporting on people and living in their community. And the same goes for representatives as well. All right, couple more questions about funding. Well, one more question about funding. I've complained for a long time in our conversation about how the federal government is pulling funding. But you look at the endowments in universities, and you mentioned this, and they are, I mean, unbelievable. So Harvard's endowment, 53.2 billion. Stanford, where we are, 37.6 billion, a little less. But you can still do a lot with that money. Why are we complaining about university funding? Shouldn't these very rich institutions, which have effectively become financial institutions in and of themselves, just fund all the things they're asking the government for?
- [35:21]
Condoleezza Rice
Well, endowments under our nonprofit status, we pay out a certain amount of the endowment every year, and it covers mostly a whole range of activities. But do you know how much of that endowment is actually restricted? That is, of that 37 or 38 billion, a lot of that money was given by people who gave it very specific things. And you can only use that payout for very specific things. So those are big numbers, but it's not as flexible as people think. The other thing is that endowments were structured to make sure that universities lasted for perpetuity. That's the whole idea of the endowment. And I'll give you an example of one time that Stanford had to invade the endowment. We had a major earthquake in 1989 called the Loma Prieta earthquake. We had at the end of that earthquake, $157 million in UN. Unfunded because we were self funded. Unfunded damage to the earth. The four quad corners were down. The museum was down. You could drive a truck into a pothole on the streets. We actually did take down more of the endowment payout to be able to finance the rebuilding of the campus. So when you think about something like that, you think these endowments have to be there for keeping the university in perpetuity. But the main point that I would make is that they're a lot less flexible than people think.
- [36:51]
Host
Okay, all right, I hear you. I mean, you could get a lot of money off the interest of that 37 billion. But if it's restricted, then that's where.
- [36:59]
Condoleezza Rice
We also have students and we have dormitories. And, you know, as you were driving over to Stanford, you might have noticed that the roads are all torn up. Well, that's called planned maintenance. Nobody funds planned maintenance except the payout from the industrial. Really yes.
- [37:16]
Host
Okay, so look, earlier you talked about international students. I promised I was going to come back with some numbers. Some numbers. The Financial Times says US universities face a $1 billion revenue hit over foreign student fears. So more important than the money is the fact that if the US Is a brand, it's not attracting the amount of international students that we had previously. This is from the article. 3 quarters of universities surveyed in recent weeks anticipate a fall in international student numbers this year, with the majority expecting a drop of at least 10%. So a lot of these, especially here, a lot of these international students, they'll come get an education at Stanford and then they'll go invent the next algorithm inside Meta or OpenAI or Anthropic. Are we going to do more damage scaring away these international students because of our immigration policies?
- [38:09]
Condoleezza Rice
Well, I really hope that we will be very clear that we believe in international students. And I'm a huge believer that bringing students from around the world is good for our students, it's good for them, et cetera. I want to see what the numbers look like in two or three years. I'm not one to take a snapshot in time, and it's not even clear to me that we are going to have a 10% reduction. There may be some places that that's the case, but I'll tell you, I have some experience with this because I was national security advisor on September 11, and for a variety of reasons, we had to really constrain student visas. Three of the hijackers were actually registered on student visas. So we very much constrained student visas. We were the ones who created that system that you read about, Civis, where you put in and you get a report on the student as to whether or not they're actually taking classes and so forth forth. We turned that around within three or four years. And so some of these effects may be temporary. Let's wait and see. But I'm one who's encouraging, particularly state, to make sure that the visas keep coming. I think students are starting to get their visas and we'll see what it looks like in the fall. I wouldn't want to make predictions about what the impact will be.
- [39:28]
Host
So, speaking of 9, 11, I mean, if you look at the United States right now, we have a moment where we're turning inward. We have tariffs to try to bring manufacturing home, but really to lessen our dependency elsewhere. Some of those are smart, but again, it's a focus inward. We're restricting student visas. We're massively anti war in this country, if you look at the reaction to.
- [39:51]
Condoleezza Rice
Well, I don't know about anti war. We just did some very good work in Iran.
- [39:56]
Host
I know. I'm saying, but just look at the reaction there. It was very controversial, both with the Democrats. Democrats and with the Republicans. How much do you think the legacy of the Iraq war contributes to this moment?
- [40:07]
Condoleezza Rice
Oh, it probably contributes a little bit. I told President Bush, you know, in August of 2008 that we'd been about war and terrorism and it'd been tough on the country. But I think it's a relatively small issue. I think what's happened over time is the United States has borne the brunt of what, what George Shultz called the security commons. We did. We were the ones who defended the sea lanes. We more than overpaid for NATO's defense. We more than overpaid for defense of a great deal of the world. And so I do think there's a little bit of a sense in the United States that we need to redistribute the load. I was very grateful to see the Secretary General of the, of NATO say the United States has carried too much of the load for too long and it's time for us in Europe to do our part. And so this is not. This is one of those things that I think has been boiling for a while. And now what you're seeing is that other countries, with the United States threatening to step back, but maybe not fully stepping back, you're seeing other countries recognize that we need to spread the load a little bit more. In one of my favorite allies was the Australians, because when you're the Secretary of State, 911 is the Secretary, the Secretary of the United States is the 911 of the world. But the Aussies would call and they'd say, there's a problem in the Marshall Islands, mate, and we'll take care of it. We'll call you if we need you. We need more of. We'll call you if we need you.
- [41:39]
Host
Right. Okay. I want to end here. A couple years ago, you were rumored as someone who could be the head coach of the Cleveland Browns. You said you're not doing it, but I want to test your football knowledge to see if this could be something that you could do today. All right, Second and goal. You're down four, 25 seconds left to go. The ball's at the one yard line. Are you passing or are you running?
- [42:02]
Condoleezza Rice
Well, if I have Josh Allen, I'm going to run because I'm going to. Or if I have Jalen hurts and, you know, the brotherly push, then I'm going to run. Anybody else? I'm going to throw the ball to the corner and have my receiver go.
- [42:18]
Host
Up and get Marshawn lynch in the backfield.
- [42:21]
Condoleezza Rice
Marshawn. Oh, that's a tricky one. I'm not going to criticize Pete Carroll. All right. Yes.
- [42:29]
Host
Well, if you had run, you would have won Super Bowl 49. Secretary Rice, thanks so much. Really great speaking with you.
- [42:34]
Condoleezza Rice
Thanks so much. Great being with you, too.
- [42:35]
Host
All right, everybody, thank you so much for listening, and we'll see you next time on big technology podcast.