Transcript: Microsoft bets on AI healthcare

This is an audio transcript of the FT News Briefing podcast episode: ‘Microsoft bets on AI healthcare’

Sonja Hutson
Good morning from the Financial Times. Today is Thursday, December 12th. And this is your FT News Briefing. Nato countries in Europe could increase their defence spending. And Microsoft is working on a healthcare AI chatbot. Plus, companies in the US and Europe are facing more scrutiny over human rights abuses in their supply chains. I’m Sonja Hutson, and here’s the news you need to start your day.

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European Nato members are talking about raising the target for military spending. Right now, each country is supposed to spend 2 per cent of its GDP on defence. Most member states are expected to reach that benchmark this year. But sources tell the FT that European states are having preliminary discussions about raising that target to 3 per cent. There’s really two reasons for this change. One of them is Donald Trump. The US president-elect has demanded that Europe contribute more to Nato for years. And the other is Russia’s war in Ukraine that has a lot of European countries taking stock of their defence capabilities.

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Microsoft is looking to expand in the consumer health sector through artificial intelligence. The tech giant’s AI chief, Mustafa Suleyman, is building out a new team, with the goal being to capitalise on what a lot of people seem to be doing these days — asking a chatbot about their health concerns. But Suleyman has been here before with Microsoft’s rival Google. Madhumita Murgia has been reporting on the race between the two, and she joins me now. Hey, Madhu.

Madhumita Murgia
Hey there.

Sonja Hutson
So first, tell me a bit more about this new unit that Microsoft and Suleyman are creating. What are they looking to build exactly?

Madhumita Murgia
Yeah, sure. So this actually just came about from tracking people’s movements on LinkedIn. But when I went to them and approached them about the story, they confirmed that their artificial intelligence unit, which is headed by Mustafa Suleyman, that’s the unit that will house this kind of health bet within it. And it will really focus on consumer AI queries. So they want to kind of create a product that’s medically sensible that, you know, gives truthful answers to health-related questions and to build up that side of that business.

Sonja Hutson
And now this isn’t Suleyman’s first rodeo in this space, right? What’s his experience with Google?

Madhumita Murgia
Suleyman is one of the founders of Google DeepMind. So this is the AI research lab that does all of Google’s R&D in the AI space. And Suleyman actually founded a health unit within DeepMind. And that unit was trying to focus on how the NHS, which is the UK’s National Health Service, could improve its efficiency using their technology. And then he moved on, ended up at Microsoft and is sort of reconstituting many of the experts he had on that team to target healthcare via AI again.

Sonja Hutson
But just taking a step back for a second, why is there this interest by both Microsoft and Google’s DeepMind in healthcare? What’s its appeal to people who work in AI?

Madhumita Murgia
So it’s always been a huge growth area in tech and, you know, healthcare and pharmaceuticals, they’re huge, huge businesses. And on the consumer side, too, you know, you have hugely under-resourced health systems here in the UK, in the US. And so using these chatbots as a crutch to provide information that’s accurate, that can actually help people to manage their own health, could be a really lucrative opportunity for health systems. And it’s, you know, it’s just so much easier for people to use as well, you know, in their homes. So I think it’s a huge financial opportunity. But also, you know, from a societal perspective, something that could genuinely make people’s lives better.

Sonja Hutson
What are some of the challenges that both Microsoft and Google’s DeepMind are gonna need to address as they push more into consumer health?

Madhumita Murgia
Yeah, I think the big question has always been one of trust when it comes to health, right. With the question of whether patients and citizens trust tech companies to manage their health data and to not profit unduly from it. And back then, you know, just as an example of how things might go wrong, DeepMind became embroiled in a controversy about how it was collecting data of over a million patients in the NHS. And people were really concerned that that data was not gonna be private and secure if it was being used by Google in any way. And eventually that project got spun off and petered out. So I think they need to be very clear rules around data ownership and who can profit from this very sensitive data.

Sonja Hutson
So do you think that Suleyman’s team at Microsoft will be able to sidestep those problems that hit him at DeepMind as they try again to break into the consumer health space?

Madhumita Murgia
Yeah, that’s an interesting question. I mean, obviously, he’s gone back to many of the experts he worked with before, because he really believes in that project. And I do think, you know, the situation is different from 2016, nearly a decade ago because health systems are struggling a lot more post-Covid and governments are desperate for new solutions. Also, you know, artificial intelligence has evolved a lot in that time. So I think those things together mean that people are gonna be a lot more open to integrating these types of technologies into healthcare.

Sonja Hutson
Madhumita Murgia is the FT’s artificial intelligence editor. Thanks, Madhu.

Madhumita Murgia
Thank you.

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Sonja Hutson
Inflation in the US ticked up to 2.7 per cent last month. That’s in line with Wall Street’s forecasts and paves the way for the Federal Reserve to cut interest rates next week. The market is now pricing in a 98 per cent chance of a quarter-point cut. But November was the second month in a row that inflation slightly increased. So looking ahead, economists expect the Fed to be a little less aggressive after December’s meeting.

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The European Union has new rules coming into effect in 2027 aimed at shining a spotlight on investments and modern-day slavery. It adds to a law from the US that was passed in 2021. Both Washington and Brussels wanna force global companies to tackle human rights problems in their supply chains. My colleague Patrick Temple-West has been reporting on this and he’s here with me now. Hey, Patrick.

Patrick Temple-West
Hey, Sonja. How are you?

Sonja Hutson
Doing well, thanks! So tell me about these new regulations. What are they exactly?

Patrick Temple-West
In July, the EU adopted what’s called a Corporate Sustainability Due Diligence Directive.

Sonja Hutson
Woof, that’s a mouthful!

Patrick Temple-West
It is. (Laughter)

Patrick Temple-West
So companies in Europe and some businesses abroad with significant revenues in the EU have to identify and prevent as much as possible human rights abuses. This applies to their supply chains. So raw materials that might be coming from outside of Europe used in manufacturing companies have to do much more rigorous due diligence to a firm for the European Union that there are no traces of human rights misconduct or abuses.

Sonja Hutson
And what about the US one?

Patrick Temple-West
In the US back in 2021, the US adopted a Uyghur Forced Labor Prevention Act. Well, it’s similar to the European law, which applies globally. The US law targets forced labour allegations from the Xinjiang region in China. This is the home to the Muslim Uyghur population, which has some documented abuse allegations there. Imported Xinjiang goods are prohibited, and this is being run through the US Customs and Border Protection Agency.

Sonja Hutson
Got it. So these two rules are aimed at limiting human rights abuses in company supply chains. The European one is much more broad. The US one is a little more targeted. How big of a deal are they? Like what’s at stake for businesses?

Patrick Temple-West
The Europe one has been hailed by activists as one of the most significant advances in years to protect people in difficult situations that it should really, through corporate supply chains, send a message that human rights must be respected. And for businesses, it’s really significant implications. They should definitely start preparing now. Companies really need to understand how their vast supply chains work. They should put the processes in place now so that they aren’t caught flat-footed.

Sonja Hutson
So Patrick, you know, I mentioned that the EU’s rule doesn’t come into effect until 2027, but the US law has been around for a few years now. What’s been the effect of that?

Patrick Temple-West
Yeah, it’s preventing and slowing down imports of goods into the US. There was a report from the US Senate earlier this year alleging that BMW and Jaguar Land Rover had components imported from the Xinjiang region. They investigated these companies and found that about 8,000 Mini Coopers contain components made potentially by forced labour, at least on the banned list that was identified in the Uyghur law from 2021. So these cars were halted in their sales. And we’ve also done some reporting in the solar space where manufacturers here in the US rely on raw materials from China. Customs Border Protection agency has been taking a tough look on that, held those up. So this can have significant implications for investors for Wall Street because of these restrictions.

Sonja Hutson
OK. It sounds like companies are being held accountable for these issues and it is having some impact on them. Do you think that that means we’re on a new trajectory here for human rights and business?

Patrick Temple-West
The US one really only applies to China and really only applies to a certain region of China. So the vast amount of imports into the US from China aren’t subject to this. The Europe one is obviously broader. It is not coming into effect until 2027. So there is wiggle room. Obviously the politics of Europe are in flux at the moment. So, there’s a question about ‘will this law ultimately be watered down, delayed’, that type of thing. Yes, companies definitely need to be aware of this. And there are instances where it is having implications for their revenues and earnings. But it’s a little tough to say at this moment that this is some sort of sea change for human rights in the corporate landscape.

Sonja Hutson
Patrick Temple-West writes about corporate governance for the FT. Thanks, Patrick.

Patrick Temple-West
Thank you, Sonja.

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Sonja Hutson
Before we go, some news out of the world of soccer.

Gianni Infantino voice clip
I can confirm that the host of the Fifa World Cup 2034 will be Saudi Arabia.

Sonja Hutson
Saudi Arabia has claimed one of the world’s biggest sporting events, but it’s not without controversy. First of all, the country ran unopposed for the bid. And second, Saudi Arabia’s human rights record isn’t exactly squeaky clean. Now, the country has pushed back against accusations of sportswashing that is hiding behind massive investments in sporting events. And Fifa says hosting the World Cup could serve as a catalyst for future reforms.

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You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.