>> glor: welcome to the program, charlie rose is on assignment, i'm jeff glor, cbs news, we begin out of las vegas with what has been called the worse mass shooting in u.s. history. we talk with fran townsend, fompler homeland security advisor to george w. bush. >> we hear this all the time, first reports are always wrong, so you can well imagine people in the white house hearing that this is a white male retiree, 64 years old. you say this makes no sense. but it turns out that's accurate. we also, the firs reports about injuries and death, that number has been climbing all morning as you well know. and i suspect it will continue, regrettably to increase. and so what you are trying to understand is what were-- what was the motive for such an act. was there a motive.

is this somebody who has a mental health problem or was there something driving him that we need to understand. you want to talk to everybody who had access to this guy, particularly in the last 72 hours. >> glor: we conclude with the c.e.o. of microsoft, sataya nadella in an interview charlie taped with him last week. he talked about mike soft and his new book-- microsoft and his new book, hit refresh. >> most of the becomes are written as lookback, either grand successes or grand failures. and one day i went actually to meet steve balmer and asked him are you go to write a book. he said no i'm into the future, thinking of all the things i'm going to do moving forward. that is when it hit me, that while we as a company and me as a c.e.o. are going through this hard process of what i describe as this continuous process of renewal, let may reflect on it. it's not definitely a detion nation-- destination to be reached, but the continuous process. the unanswered questions and the

reflection is what caused me to write the book. >> glor: the tragedy in las vegas and the c.e.o. of microsoft coming up. >> funding for charlie rose is provided by the following: bank of america, life better connected. >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. i'm jeff glor, charlie rose is away on assignment. a gunman opened fire on a music festival from the 32nd floor of a hotel room in las vegas

last night. at least 58 people were killed and more than 500 injured as of this taping. it is the deadliest shooting in modern u.s. history. the gunman has been identified as steph stephen paddock of messquite, nevada, he believed to have killed himself before swat went into his room. here is a look at the cbs evening news coverage of this day's events. >> america is a nation in mourning tonight for victims of the dead leaest mass shooting in modern u.s. history. good evening. it happened late last night just behind me, that is the 43 story mandalay bay hotel and kation ino. las vegas police say a heavily armed gunman broke windows on the 32nd floor and fired down on thousands of people attending an open air concert. many fled down the street that is rate behind me hear. there is still crime scean tape

up. you can see bloody footprints on the sidewalk. and the clothes they left behind as they literally ran for their lives. at least 59 people were killed, more than 500 injured, most of them by the gunfire. police say the gunman, 64 year old stephen paddock of mess quit, nevada, killed himself before they arrived. they have not determined a motive but they say they have found no link to terrorism. we have extensive coverage tonight, beginning with john blackstone. >> reporter: country music star jason all dean was on-- aldean was on stage when the firing began. shortly after 10:00 local time. but it took a full 20 seconds for people to realize this wasn't fireworks. >> that is just a fire cracker no way that's a gun.

>> reporter: then came chaos. the sound of automatic weapon fire mixed with panned monday-- panned moanium. >> shots fired. >> there are many people down. >> the shooter paused several times. >> are you okay, let's go. >> i'm bleeding. >> gayle davis held on to a police officer for dear life. >> and then we thought okay, it's over, it's over. and then it would start again. >> reporter: some people ran, others sought cover behind walls and gates. still others froadz in the-- froze in the open. this woman simply ducked. >> everyone was just like literally laying on top of each other trying to get out of the way. and the shots just kept coming. >> people desperately sought help for the wounded. anyway they could. >> we need to try. we just need to get people over to the hospital. >> hey, we can't worry about victims. we need to stop the shooter before he has more victims.

anybody have eyes on him. >> meanwhile police searched for the gunman. >> we're taking the gunfire, it is going right over our heads, we're pinned down here, with a bunch of civilians, be advised we're taking fir from a very high floor. every officer that comes up will be a target if they are driving on las vegas boulevard waws it is coming from mandalay bay on the boulevard side. >> the shooter later identified as 64 year old stephen paddock was in fact firing from four football fields away. through two windows. 32 stories up. swat officers moved in. >> go ahead. >> we are at the suspect he door. bring people in the hallway get aware. and get back. we need to get any response from this guy to see if he is in here or moved somewhere else. >> all units from 39 2-7bd floor swat has exposed a breach, everyone in the hallway needs to pov back. >> breach, breach, breach. >> inside where paddock had been a guest since last thursday, they found 19 weapons.

sheriff joseph lombardo. >> he had killed himself and exactly we'll have to go through our body-worn camera and existing video whether we engaged him at the same approximate time or not. >> reporter: gayle davis said the terror seemed to last forever. >> i've never been that scared in my life, in my life, ever. >> reporter: even when people panninged to get out of the enclosed concert area over here and were running down these streets, they were still running in fear, with the sound of gunfire echoing off the buildings all around them. anthony. >> john blackstone, thanks, john. we are just beginning to learn the identifies of the victims. carter evans is following that part of the story. carter? >> reporter: anthony, you could just imagine with the triage must have been like, ambulances arriving one after the other, in all more than 500

patients were transferred to local hospitals. but not all of the critically wounded arrived in a ambulance. >> in the chaos confused concert goers ran in any direction they could. over walls, on top of each other and into hotel lobbies, just trying to get out of the line of fire. >> be advised it is automatic fire, fully automatic fire from an elevated position. take cover. >> gayle davis was at the concert. >> this girl had been standing right beside me. and she had fallen, and first she tood stood there and she grabbed her stomach. she looked at her hands, her hands were bloody and kind of screamed and fell back. >> concertgoers who were not injured became first responders moving victims in wheel bar rows, office chairs and hotel luggage carts, sean was shot in the leg when a stranger stopped the bleeding and drove him to the emergency room in the back of a truck. >> surrounded by thousands of

people, you don't know who is shooting at you. it is pretty stressful. >> you have guys, you got to keep moving, help, keep me focused and i'm trying to keep my wife moving. >> reporter: more than 100 gunshot victims poured into university medical center, according to trauma surgeon. >> these patients with sol many coming in so fast, we did what is called damage control. which is really just stopping the process of dying. >> move on to the next one. >> got the next one in, and we did that all night. >> by morning more than 50 people from and route 91 concert were dead. like sunny from tennessee, rachel parker from manhattan beach, california and charleston hardfield a las vegas cop who coached youth football. hundreds more survived. and with hospitals running short on resources, they put out a plea for blood. jeff was one of many who stood in line to donate. >> this is a small thing, right. but you look outside and there are all kinds of people that want to donate, they will give blood as much as they need. >> this is university medical

center. it's the only level one trauma center in the state. last night they took in 104 patients. now four of them died, 12 are still in critical condition, but anthony, 40 have already been treated and released. >> carter, they are doing incredible work there, thanks. earlier i spoke with brothers corrie and craig who were watching the concert just steps away from the band. >> did people realize what was happening? >> no, so, well, kind of, we heard the first couple of sounds, there was a woman who went down. we didn't know what was going on, she didn't know, she was there, wait a minute, a woman. >> they looked at her cowboy boot and you cou minutes but it was breaks. it was going. >> every time there was a break, crowds of people would move as he was trying to reload. >> as this was happening, what

did you see in the crowd. >> it was just seeing people coming from all different angles, ducking for cover, really just trying to find safety. >> i just saw people on the ground, people just littered, just everywhere, we heard glass breaking, it was just noise. >> pandemonium. >> pretty much. we were waiting for the shots, they finally stopped. like we have to move. made a decision to go out the back and there was a gate that either got opened or tramp eled there were cars there were people, there were people getting carried, people lifeless there were people everywhere. >> you guys must be in shock. >> you know, physically, we're thankful and very fortunate for everything, mentally, as residents of, you know, the city, as fans, as attendees, yeah, it hurts. it is really, mental trauma on your body. you never want anything like this to happen. >> our cbs news justice and homeland security correspondent jeff pegues has been working his law enforcement sources and

here's what he found out about the gunman. >>after stephen paddock checked into the mandalay bay hotel last thursday, investigators say he spent the next three days gambling in the casino, and he stock piled a cache of 19 weapons, a mixture of handguns and rifles in his hotel room. two of the guns were on tripods. police and the fbi are now trying to determine a motive. >> we're shocked, horrified, completely dumbfounded about this. >> eric paddock, the killer's brother says he was interdescreud-- interviewed by investigators for about four hours. >> the fact that he had those kind of weapons is just-- where the hell did he get automatic weapons. >> anything? >> nothing. no religious affiliations, no political affiliation, no, he just-- hung out. >> stephen paddock was an accountant but family members say recently he was a professional gambler who had won

large jackpots. he was also a licensed hunter and pilot who had rented, owned and sold multiple properties in four states over the last four decades. paddock's father was once on the fbi's most wanted list. 9 the 1969 notice described benjamin hoskins paddock as a bank robber who was psychopathic and considered armed and very dangerous. until last night's mass shooting, stephen paddock's only run in with law enforcement was this 2009 parking ticket. >> it was well planned out. and it took a lot of strategic thinking. >> former fbi profiler mary ellen o'toole said paddock may have been planning the attack for years. >> he had a view of the concert. and he probably had gone to other rooms and chose specifically this room. so there was surveillance that likely occurred before this event. >> a search of paddock's home turned up 18 additional weapons, thousands of rounds of ammunition and explosives. today isis claimed

responsibility for this attack but investigators say so far they have found no link between padock and the terrorist organization. anthony. >> jeff pegues, thanks, jeff. people who had encountered paddock recently are also having a tough time believing he could have committed mass murder. demarco morgan has that. >> as soon as i saw the name, it was an instant recognition. >> stephen paddock purchased a shot gun from utah gun shop owner chris michael back in february. >> we have code words between us as staff if something doesn't feel right, or doesn't look right, we will do everything we can to actually top the sale. none of the alarms went up from any of the staff. >> today law enforcement searched paddock's home. mesquite police officer quinn. >> we haven't had any run ins or contact with him in the past. >> he is a fies guy, i mean he was kind of quirky but a fies guy. >> paddock's neighbors describe

described him as quiet, unsocial an having an odd sense of humor but not as violent. >> it is just kind of unbelievable to think somebody who was, you know, in our community, a member of our community could possibly go out and do something like that. it just is unbelievable. >> reporter: paddock was a a licensed hunter and known to freak gun shops near his home here in nevada. he lived here with his girlfriend mary lou danly who was out of the country and at this time law enforce. believe she was not involved. >> glor: joining me is francis townsend, a former homeland security advise tore president george w. bush and a cbs news security analyst. fran, welcome. there were so many scenarios you considered when you served president bush about what might happen in situations like this. was this one of them? >> absolutely. remember during president bush's term we had the horrific act of shooter like this at virginia tech.

where he, the shooter went in, had a history of mental health problems, obtained a gun and shot up and killed students at virginia tech. and i was there with president bush shortly after the shooting when he went to meet with the families of victims. it's just horrific. and the scar that this leaves on a community, even one like las vegas that is used to large crowds and practices for such events can't be understated. >> glor: talk about the white house response and what goes into it. >> so the first thing, you hear this all the time, jeff, in any crisis and that's first reports are always wrong. so you you can well imagine people in the white house hearing that this is a white male, retiree, 64 years old, you say this makes no sense. but it turns out that's accurate. we also, you know, the first reports about injuries and deaths, that number has been climbing all morning as you well know. and i suspect it will continue regrettably to increase. and so what you are trying to

understand is what were-- what was the motive for such an act. was there a motive. is this something who has a mental health problem or was there something driving him that we need to understand. you want to talk to everybody who had access to this guy, particularly in the last 72 hours. neighbors, people in the hotel, hotel room workers. all of that will begin to paint a picture for you. right now you can be sure the atf, alcohol, tobacco and fire arms are doing traces on the gun from the point of their manufacturer until they came into the hands of the shooter. how did he get them, what was he doing with automatic weapons like this. >> glor: so there is the first response on the scene and then there is also the first response from washington and from the white house. and we saw the president speak earlier. >> that's right. the president in any moment like this, what we expect of the president in those, in that first statement is to unify the country, to comfort, to comfort those who are grieving or injured, to inspire law enforcement, to continue, a very

tough task. remember law enforcement las vegas has lost at least one colleague, another was injured. and so the president has to be the unifier. and sort of the comforter at that moment. and i think that's the tone that the president struck. >> glor: we keep hearing about the profile, a typical profile of something like this. and this certainly wouldn't seem to fit. what is that profile and what is it from what you heard so far has surprised you the most? >> i think the age of the shooter. the circumstances as we currently understand of the shooter is quite surprising. you expect this to be someone younger, someone disgunt el-- gruntled, a loner, someone disa affected it may turn out this is a disaffected loner, just an older person. but it just doesn't make sense. we don't know really very much about this individual. he didn't even seem to be particularly close to his brother and family in florida. all we know is that he spoke to them after hurricane irma asking if they had power back.

but he doesn't, we don't know, we haven't painted the picture of him yet. >> the fbi did feel compelled earlier at a news conference that the local police held to announce that so far they see no international connection to terrorism. and this was after isis tweeted saying that they served as an inspiration or some sort of coordination for the attack and that stephen paddock had converted to islam immediately before. why did the fbi do that? >> well, as you say, isis had put out two statements using their news agency, if you will. they had distributed this on a channel called telegram, it is an encrypted application. and on twitter. and because it had begun to circulate, the fbi wanted to be clear that there is no evidence to support that. look, i think we ought to understand. isis is on their heels. they are losing territory in both iraq and syria.

they are not winning. and so they're looking for positive publicity. and that's all this was. this is their attempt to turn the attention to themselves. >> glor: are you surprised the fbi did that at all. >> no, i think they did absolutely the right thing. they're not going to rule anything out. they know they searched his moment home there is this other property up north they will look at. they will take all sorts of evidence out of there. and also the hotel room. look at his cell phones and computers, if there is any connection, the fbi will identify it. but certainly as of now we see no connection to international terrorism. >> glor: so the president goes to puerto rico tomorrow, a visit which has been much discussioned, makes that visit and then moves to las vegas, at this point that's the plan on wednesday. when you are coordinating all of this inside the white house right now, what are you thinking do you first and most important thing is that you not disrupt the investigation. surely the president wants to go. he wants to sort of be with law enforcement and encourage them, he wants to comfort the grieving

families and victims. he wants to encourage local politicians and others there. but what he doesn't want to do is come in with a very heavy security footprint that the president brings and disrupt things. remember as of this morning, they were still recovering bodies from the scene. and so what the president will, i think will likely do, are you looking for a venue the president can do what he needs to do but that's off the strip, far enough away that he dubt disrupt the recovery effort going on on the las vegas strip. >> glor: the president's remarks earlier were not political or predescriptive. he talked about trying to heal, he talked about finding light in the darkness. he noted script steur-- scripture. what do you expect to hear from him moving forward? >> well, i think you'll hear similar sorts of language, right. union fying, comforting, wednesday when he is in las vegas. but pretty quickly the conversation is going to turn to an assault weapons ban, gun control, all that is coming.

it's just in this first 24-72 hours, you really want to keep the focus on the recovery effort. >> glor: and security questions for las vegas or las vegas hotels? >> look, the scene after the mumbai attack you will recall at the taj hotel, hotels in africa, in europe, in india began screening individuals as they entered a hotel and screened their luggage. it's quite common now outside the united states. that doesn't really lend itself to this. you and i have both stayed at the mandalay, it's connected to a mall. it's connected to a convention center and casino floor. there is no way you can imagine trying to screen people and their luggage coming too this complex. it's too big. >> glor: and what is remarkable about international, not just hotels, it's restaurants sometimes. >> yeah. >> glor: there are a lot more places in europe, africa, india especially, where you go through a security screening. >> that's right. >> glor: you go through a metal detect tore get in. >> that's right. this is a balance t always is. it is easier when you have a

hard target like an airport where you can control the per imter and screen people because you can control the number of access points. something like this is very, very difficult to do that. but i think you're going to have to see, you imagine if they screened luggage, if that's all you were able to do but screen large packages and luggage, they might have been able to see the weapons broken down or the ammunition. but i think we're going to have a conversation about where is the balance now, post the lags vegas-- las vegas shoot being how we do screening for hotels and those sorts of facilities. >> glor: and where were lone wolves on your list of security concerns or fears in 2006, 2007, 08y versus now. >> 2006n that time frame, jeff, we were really worried still about al-qaeda and iraq. al-qaeda in the arabian peninsula, the more organized groups. it's not that we didn't here about lone wolves but they weren't as high on the list.

i think now as we see the fracturing of isis, the fracturing of al-qaeda and this metastasizing threat around the world we have seen an increasing of lone womans and part of the reason we see the department of homeland security really urge state and locals to do practices ordination, this is being lead by las vegas pd. but how does the coordination work at this point between them and the feds. >> it happens right there on the ground in las vegas. i will have the joint terrorism task force and put the name of the task force aside. what it does is coordinate all the state and local efforts. and so for example, the fbi brings in atf, alcohol, tobacco and fire arms to trace the gun. they will help with any international leads if there are any. they may help with forencics. the processing of computers. there are all sorts of ways in which the crime scene is logged and evidence is logged that the fbi can help with because the massive size of this investigation will outstrip the cape ability that anybody in las

vegas would expect they would need. >> glor: fran townsend, thanks so much. >> thanks, jeff. sataya nadella is here, he has been c.e.o. of microsoft since 2014. he joined the technology giant in 1992. under his leadership the company has focused increasingly towards the cloud, mobile and artificial intelligence. he's also generated more than $250 billion in market value making microsoft the third most valuable company in the world. he writes about his life and the challenge of transforming a corporation's culture in a new book. it is called "hit refresh, the quest to rediscover microsoft's soul and imagine a better future for everyone." i'm pleased to have sataya nadella at this table for the first time. welcome. >> thank you so much, charlie. >> rose: i saw you this morning and it is a pleasure to see you here for a longer conversation. so how did the book come about?

did you, when you took over realize that i've got a challenge. and that challenge that i have to find the soul again much a corporation if corporations have soil, and i assume you think they do, because it was what lead it to its greatness. >> the idea of writing the book came about in a convoluted way in the sense that when i was thinking about the journey that i was on, we as a company were on, it is hard to find business books that are not written ex-post, in other words most of the books are written as book backs, either grand successes or grand failures. and one day i went actually to meet steve balmer and scid him, where you going to write a book. he said no, i'm into the future. i'm thinking of all the things i will do going forward.

that's when it hit me. that while we as a company and me as a c.e.o. are going through this hard process of what i describe as this continuous process of renewal, let me reflect on it. it is not definitely a destination that we reached but the continuous process. the unanswered questions and the reflection is what caused me to write the book. but the thing that you brought up which is do companies have a soul, i mean that is one of the existential questions we were asking. we were 42 years into our existence as a company. i said why does microsoft exist. i needed to answer that question. first ask the hard questions and then answer it in a compelling way for myself and our employees and our customers. and that's where i had to go all the way back to the formation of the company. and reflect a little bit on what is the product-- . >> rose: find what was in its

genes, its dedna. >> i'm a big fan of joseph campbell. and i always think, in our creation myth, i think is everything that is our identity. bill and paul, the first product they created was the basic-- por the altar. and when i think about that in today's context, in fact just this monday i was talking about how we're taking tools and our visual studio tour and bringing it to the quantum computer. obviously a lot has happened between the alltair and quantum but what comes naturally to microsoft is creating tools, creating technology so that others can create more technology. that to me is blt a recovery. >> rose: are these tools primarily software. >> yeah, the magic waf bill and paul and steve all recognized was software is the moses mall eubl of resource that humankind has found.

that can be applied to any challenge in front of us. and you see it, in today's world it's probably more relevant than even in 1975 when microsoft was founded because of the prevalence of software or digital technology, our life and that work. >> rose: when i company show seems to be, i mean god knows microsoft had a lot of money t had made a lot of money. but there was a sense that either it had become complas ent t had lost its way or simply other companies had run passed it because of take apple as one, take google as another, take amazon as a third. not in the same business but in the world of technology, had left-- leapt forward. can you look at the company that you work for since the early '90s and say we had become complacent, we were where we were because we lost what,

beyond our soul joond beyond what made us great. >> some of these comparisons are interesting, because in some sense you can say the distance between us and our competition, if that is the lens through which we view it in the late 90st, maybe even in the early 2,000 there was real daylight. and now there are four or five depending how you count, competing every day. and i like that, having more competition is a good thing. that's how capitalism works. you said it well we all have similar capabilities. >> . >> that's right, and what comes more naturally to us is dem

october advertising technology so that others can use technology. that's what i want us to be really good at which is to rediscover the things that are innate in us but yet reinvent ourselves for today's context. wasn't being driven by primarily envy of what others achieved in different context or in different identities that to me is a truer measure of a company's progress but you have to create, when you think about culture, you think about environment that lets individuals, stimulates them to be better than they have ever been that is what a culture does. >> makes them not want to disappoint, not only themselves but the place that they exist. >> and in fact one of the things one of the things that i

realized is when are you a start up, are you looking for your subbing sets. when you have the hit then you have this beautiful thing that happens which is the context or the product you have created the capability that got built around the product and the culture that came with it. all are in this beautiful cycle, growing every quarter, every year, the product is doing better, the capability is getting firmer everything that grows at some point stops growing and then declines. >> jeff bezos said to me-- he said somebody will come along and disrupt me. >> that's correct. >> i just hope that i am dead by the time. >> and the law of large numbers, if you are a grand success like ccess with office, then weess

found success, here is the point i was going to finish, that cycle that you have, between your concept capability and culture has to be broken into is when culture becomes important it gives you even the option value to come up that to me is what large companies have to truly conquer you have to go outside your comfort zone. >> i think steve jobs said this and if not, he said something like this, sometimes company, they are afraid to lead so they try to add to increase the thing that brought them there. rather than being able to see it clearly with a blank sheet, with a blank canvas so they can't really re-create, they can't

create something totally fresh because some part is connected to what they know and what has been so successful. >> absolutely right. but at the same tie it would be a real big business mistake if you don't take product line extensions. most profitable businesses are usually product line extension. >> apple is a perfect example of that. they released the iphone 8. >> that's right. but clearly the time comes when you have to recognize that even the product line extension which are obviously much better for the top line and bottomline are not going to su fies. that's when you have that clean blank sheet. and in that case we've gotten over the years, when i joined the company in '92 t is sort of like wow, microsoft you have a pc company, how can you ever be a server company, will you ever make it. and low and behold, we had to bring in new people like i was part of that generation that got into microsoft that knew a thing or two of servers. >> yeah. >> we then built a business over

a period of time. >> putting you in the cloud and elsewhere. >> that's all-- in fact, there is a straight line from where we got started with basically building what was at that time called windows nt to our cloud business. >> rose: and now are you one of the giants in the field along with amazon and a couple of others. >> that's right. >> rose: totally new business for you. >> completely right wz we caught some waves, we missed some waves. but one of the measures that i have is am i competing with a brand new set every five years. and on that measure if you look at it from microsoft from 1975 to 1985 to 1995 to now, we have competed against that, our existential threat, each decade has been different. >> rose: everybody knows that ai is here, and it's going to be powerful. it's here and it's going to be powerful. how do you see it and how do you find microsoft's connection that will enable microsoft to achieve

its potential. >> yeah. ai is not just another feature it is, i think, a fundamental technology that is going to have significant impact in our lives. but here's the way i look at it. >> explain for most people what ai means to you. >> to me it is the technology that perhaps will empower us more so than anybody piece of software that we have created. i will give you a simple example. we have now the capability to have software that can recognize objects, right? it can take any film, any real seed and say hey, this is a cop, that is a box, you're charlie, he's smiling. now just imagine that ability to recognize objects, emotion, and relay that to someone with

visual impairment. in fact, angela mills who is a colleague of mine uses this app called seeing ai that we developed, an application that uses-- . >> rose: seeing ai. >> that's correct it basically gives anyone with visual impairment this cutting edge ai capability to interpret the world. so she now can go into our cafeteria and tells me for the first time order with confidence because she can read the menu. she can check out the ingredients. she can go into a conference room, i had not even realized how hard it is, you know, she says can i now walk into a conference room with confidence knowing that that is the right one. i'm not barging too a meeting that i was not invited into. and for her, ai is really empowering her. >> rose: restored sight. >> completely, restored sight and making her fully participate at microsoft as an employee of microsoft. one of the other things that we, again, a group of passionate

people did was brought technology together, right into words which allows kids with dyslexia to be able to read and i look at that and i say woi, that is empowerment. so ai clearly, like any new technology is going to have unintended consequences. could even create displacement. we have to deal with it with a clear eye approach. but let us not be afraid of it. and what good it can do. >> rose: you also find, i am i know a little bit about this, enough to be curious, you know, the power of ai as a medical tool, not only because it can, through supercomputers, analyze more things than had been done faster than anything else, but because of the power to look at things, it can look at a gaz il onpictures of your face and see differences that are relevant to

medical diagnosis. >> completely. one of the things. >> rose: the facial recognition one once of the things that i was talking about recently is the university of washington and cambridge university in the u.k. are partnering with us on using, for example, when you do radio therapy, the radiol guest spend quite a bit of time planning the regimen by looking at images. >> and they have to make sure that they get the tumor and not the healthy organs. again, similar, what if before we talk about replacing radiol guests, let's talk about how do we empower radiolguests so they can spend more time with the patients, give them relief of the tedious task of that accurate job they have to do of finding the tumor, that so me are the kinds of things that state-of-the-art ai can solve. >> but i think and i'm asking this as a question, there are now machines that can make analysis that are every bit as accurate as human beings if not

better. by looking at images, right? >> that's correct. and in certain narrow fields. i don't think we have a very generalized solution for it. but yes, if you train a machine to do a very specific task, it can do that very, very well using some of the latest techniques of deep learning. i think we're in very good shape on that, but it doesn't mean, one of the things that is amazing about human beings is still not replicatable at scale. is you can learn one thing, and you can get better at something else that is not directly related. >> rose: learn one thing. >> that's right. >> rose: and get better. >> at something else. that is kind of how we-- . >> rose: whereas machines. >> are much more narrower. the state of the art of ai through something called transfer learning, is getting close to achieving that ability to take something in fact, one of the first places we observed this was in skype translate, right, so we brought these three strands of technology, speech

recognition, speech synthesis and machine translation with this new technique called deep learning. and gave it skype data. and magic happened. that is you could be seeking in chinese, i could be speaking in english and we could be having a realtime conversation without any interpreters. that is fantastic. but here's the interesting thing. once you reach it, chinese and english t will get better between german and english. and we're saying wow, how does that happen, that's exhibiting. >> rose: if you teach it chinese and english it will get better than german and english. >> that is transfer learning, an ability for machines to transcend one domain, which you know, kids do, right. kids can learn something in math and apply it in phoenix. that ability is something we have much more innately in us, machines are getting there. but not yet, not yet completely there. >> what is deep learning? >> it is one of these techniques that in fact in the 08see, is

when it was born, neurol networks, a way for people to do patented recognition using a particular type of ai tech neak t went out of fashion for a long time but some of the researchers who were into it kept going. kept going. then around 4, 5 years ago we had enough data, enough computer power age also new algorithmic trips and techniques that these people in academics were building. and they all brought it together and now we have the ability to do speech recognition, speech translation or machine translation, object recognition, computer vision in particular. and it's amazing. human level perception, one of the things that we talk about is how we now have the ability to do speech recognition better than humans can. and that is because we have

figured out that having the deep neurol network is like having essentially some parts of our brain which are tuned for perception. so one could say-- . >> rose: so you can create a machine that can recognize speech better than i can recognize speech. >> that's correct. so right now you could say if you break down all the things that we do with our brain, whatever is perceived, second is we think, cognition, then we act, planning. one could say we are very good now at some perception task, better than the human brain. i think we have a long way to go in general cognition. we could train it for some narrow things. planning again, some of the things that are happening with autonomous cars and so on is fascinating to see but again, a lot more to do there. but i would say when you put all these three things together, will we arrive at this, what people call artificial general

intelligence. that's the frontier. i personally believe we are way off from there. but we are on the right road this time. >> tell us about what quantum computing is. >> a big part of your future? >> yeah, i mean i think this is one of those things. >> rose: one of the things bill talks about. >> actually bill, bill started, microsoft research in 1995. and he decided you know what, the speech recognition thing is important. let's start now. and it's 2017 where it is now possible for us to do better speech recognition than humans. so i think these are long-term projects. we have actually been at this quantum project for already a decade. again, this is pretty ---- it's amazing. we have brought i think the fundamental breakthroughs that are required to stabilize these.

fundamental breakthroughs in physics that are required to create the physical sub stand yaings of the stable cubit and then of course a new way to think about computer science. all of the assumptions of computer science are no longer true. you completely think of it differently. the reality, why do we need it, say hey, why, for all the abundance of computers we have, somebody was telling me the first super computersers were 13,000 therefore-- the xbox one x that is coming out is going to have. >> rose: a gaming machine. >> 7 billion transistors in it, right, could you say wow, that's amazing. but yet, when i think about all of the computer power we have in the cloud or devices, what are all the unsolved problems. we can't still find that cat list that can absorb the world's carbon and solve the problem of global warming. we can't find the material that the superconducting at high

temperatures so that he with can have lostless power grids. we can't even model the enzymes that would produce food, right. so in some sengs-- . >> rose: they're working on every one of those problems. >> that's right. and they all require one thing. they require more computer power. >> rose: and time. >> that's right, time is what we don't have. >> rose: right. >> because the classical computer you can say i can solve this, all we need is time from the big bang to now. which we don't. if you said wow, what is this quantum computer. and in the simplest metaphor at least have i to explain what it does. say you have a corn maiz, and i want to find a path, the classical computer will breut force t essentially trace a path, hit an october obstacle, retrace, start a new part and on and on and on you go. these are such hard problems that it can go on for all time. except for the quantum computer, you take every path simultaneously. so your ability t is the ultimate powerful computer. and your ability to get to

solutions is going to be so much faster. >> rose: of all the things we just said what is the question you would most like to see answered? >> i think the real challenge for us when i think about america's unique history, one of the things that i most admire about this country is never in our human history was it possible for so many people to live with so much surplus and wealth being created. in other words it was the most egalitarian society ever known to man. and you know, one of the things that is talked about is the blue collar aristocracy, that is a american phenomenon. and the question is how can we get back on that path, in other words, how can we create economic surplus because of technological break throughs but then how can that economic surplus translate into equitable

growth, right. if you said oh equitable growth show is a tradeoff from economic progress, then we will have the worst of all worlds which is our economy will stall, and quite frankly we're not going to have an increased equity. but if we can really come up with this balance where there is new technology, that new technology is creating more surplus, that more surplus without loss of human dignity is creating wages and jobs, and more-- that's the challenge of our time. >> rose: did i read this correctly that between the time you became c.e.o. and today there had been a 250 billion dollar appreciation in microsoft >> that is what the stock price will say, quite frankly as you know, charlie, more than anyone else, i don't think stock markets are exactly leading indicators of future success. i think if anything, a lot of

great work happens long before i became c.e.o. and i was part of that. after all i'm a consummate insider, not just somebody who dropped in from mars. >> rose: and it delivered on your watch. >> that's correct, so that's kind of how i look at it. >> rose: if you look at that in terms of where microsoft has grown, has it been primarily, primarily in creating new markets? in the cloud, and other things, rather than simply expanding a larger pie from windows. >> i think that's true. which is in some sense. >> which is essentially what you had to do. >> uh-huh in fact now if you look at our revenue, windows is a big part of our business and will continue to be because people do need large screens and need more than consumption, they need to create. and that's where we want to innovate. but that said, we now have a very big business in obviously our productivity and communication, that span all devices. we have a big business with

linked in, and the social network. >> rose: giving you the what? >> what did you want from linked in, a kind of. >> one of the things that i think-- . >> rose: for facebook. >> if you look at it, we have a billion users of office, a billion users of windows. what is the commonality between them. they're all professionals, they are all working on things. and linked in is a professional network. so we wanted to bring the world professional cloud along with the professional network so that we can help people all over the world who are professionals get more done. that is the fumentd realization. >> rose: certainly put reid hoffman in the seat. >> reed is amazing, reed and jeff, reed is on our board now. he is a tremendous addition to our team. >> rose: when you look ahead, tell me what you see around the corner by, we are now 2017, by,

as early as 2035. >> i write in the book it is like anybody who does forecasting in tech, you should not trust them, having said that, i think i do obviously speculate on these three technologies. we talked already about quantum and ai. but the one we didn't talk about is mixed reality. this is the other area that i am very, very excited about. when i walk into my office and i put on my-- i see all of these screens that i have set up in my work which is, i essentially have infinite number of screens. this is the first medium where we have found the ability to mix what is real with what is artificial. >> right. >> and now take that, we were talking about medicine and sergery. doctors at the cleveland clinic are being taught anatomy using the hollow lens because they

don't need a cad aver. they can have a hollograph of a cad aver that you can be resize the. the doctor can be remote. >> rose: we're talking about virtual reality. >> virtual reality is one mod allity which is the immersive one. augmented reality is another mod allity where you can see the real world as well as the virtual, like a dial, you can be fully immersed, partially immersed. >> rose: that is augmented reality. >> that's right, we call it micked reality t is your choice whether you want to be in the augmented reality world or virtual reality world it play need not be these two stark choices. you dielt the amount of immersion you want for the application. and another great example is ford has always made cars. but one of the ways they communicated about the new design was to actually build a clay model. but now they are using hollo lens, just imagine the digital feedback cycle, the people in the manufacturing or in sales,

being able to, see the model as it is being built, annotated. >> rose: and architects. >> that is an amazing thing. >> rose: or sculptures. >> design, i think design of anything is not going to be the same because literally you can be using odd owe oughto cado any cad programs, see the output of what you are designing right next to you as a hollogram and that is what i think will be absolutely game changing. >> rose: one of the things you did when you became c.e.o. was you brought bill back f you can use that expression, bringing bill back. he was always there in part. but he found a significant part of his time in terms of philanthropy and global health and u.s. education. and you wanted him to do what? >> you know, one of the things that founders have is these magical power to be able to

bring the best out of people. you know, when someone says go meet with bill, and talk about artificial intelligence, you can be sure of one thing. one is that they will bring their a game to that meeting. and bill will be very intellectually honest in giving them feedback on what he thought of their work. >> right. >> that is invaluable to me, to set high standards. and that's what we really wanted, and that's what bill does. he shows us the mirror, shows me the mirror every day about how can he be better. are we ambitious enough, are we long-term oriented enough. it's okay if you miss a thing or two but now let's make sure that we are building towards the future with the right ambition. and founders can really bring out the best in a company. >> rose: the book is called hit refresh, the quest to rediscover microsoft's soul and imagine a better future for everyone with a forward by bill gates. thank you so much. >> thank you so much, charlie.

>> rose: sataya in addition e8o, c.e.o. of microsoft, thank you for joining us, see you next time. >> for more about this program and earlier episodes visit us online at pbs.org and charlie rose.com. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org

>> rose: funding for "charlie rose" has been provided by: >> and by bloomberg, a provider of multimedia news and information services worldwide. >> you're watching pbs.

>> announcer: this is "nightly business report" with tyler win streak. stocks reach further into record territory with the s&p 500 logging six straight sessions of gains. revving up. sales soar at auto showrooms as americans buy bigger, more expensive vehicles. costly care. cancer, a new treatment, and an hitting price tag. those stories and more tonight on "nightly business report" for . good evening, everyone. i'm sue herera. >> and i'm bill griffeth in for tyler mathisen who is on assignment tonight. i'm co to you from the new york stock exchange, where once again stocks