Tariffs, AI Power Plays & Cybercrime Crackdowns | TSG Ep. 876

Hey, everybody. Are you confused about tariffs? Join the club.

You're watching Textron Gang. We'll be back in a minute. Hey folks, welcome to the Textron Gang for today.

I'm Mike Ard, your host. Joining me today is Dan O'Brien, who's president and COO of the Futuring Group and Chris Blas, and also new member Kate Scarelli. She's been on the show a couple of times now, but if we haven't caught a couple episodes, KA is a security expert and does a lot of work in app dev, so, you know, plays both sides of the ball as they say.

Folks, welcome to the show. We're gonna have a little chat up early here now about what's going on with all these tariffs, because if you're like me, I'm having a hard time, frankly, keeping score. Um, lately we've now seen that there's gonna be tariffs, maybe going into South Korea and Japan, but then we're waiting to see what happens with Europe.

And it looks like the tariffs themselves were delayed. Dan, a lot of folks in it right now are trying to figure out their budgets for the coming year, and it's July and a lot of them are ending their fourth quarter coming up at, um, I think it would be September-ish. It's very hard to plan in this environment, but what's your take on what's going on here and what should it folks be thinking about?

Yeah, thanks Mike. Uh, you know, not sure we'll figure it out here today, but, uh, hopefully we can shed a little bit of light on kind of what's going on. Listen, I, I think the big theme is, you know, negotiations will continue until tariffs improve, right?

You know, that's, that's kinda, um, you know, the, the path we're headed down still, um, you know, deals in place with Vietnam and the uk, bit of a partial deal with China and really just still trying to work it out with the rest of the world. Um, you know, kind of under the, under the microscope more recently, you know, seems to be Japan and South Korea. And obviously, uh, you know, of major concern to the tech industry given the prominence of firms like Samsung and South Korea and Sony and Tokyo Electron and many others in Japan.

Um, you know, disruption and, you know, uncertainty in the supply chain. Uh, not a good thing for anybody. Um, really hard for business planning, really hard in terms of understanding, you know, where pricing may come in.

Um, and so, you know, I think we're all still trying to figure out where this goes. Um, you know, it feels like we've kind of had this July 9th date out there for a while. That's tomorrow for those checking the calendar.

Um, seems like we're gonna push that to August 1st in a lot of cases. So, uh, a lot of, a lot of tough rhetoric out there. Not a lot of progress.

Um, and, you know, really, I think a lot's still up in the air, but, uh, you know, South Korea and Japan most recently under the gun and, you know, also a little bit of iron towards the, the bricks countries, right? And, you know, kind of the extended tail that's associated with them, um, is they added a lot of countries last year. Um, you know, the, the targets keep shifting, but, uh, not a lot of progress being made negotiations continue, It seems to me too, with BrickX, and you brought that up, but the c in bricks stands for China, and I thought we had a partial deal, and yet now we're threatening anybody who kind of is associated with bricks, and it's just a little more confusing than ever.

Well said. Yeah. Uh, maybe that's the partial part of the partial deal.

Um, but, uh, it's an, it's an interesting collection of countries for sure. Obviously you've got Iran in there with, uh, you know, the countries that were added more recently, um, South Africa, you know, uh, Ethiopia, many others. Um, you know, definitely, uh, a a bit of a tough group to, to negotiate with for the United States at this point in time.

Chris, here's my question to you, and you've worked in cybersecurity for years, but, um, do I pay attention to any of this stuff or do I just ignore it and clan and kind of, this is just some sort of black swan event that may or may not happen, but I kind of just can't plan for it, so I must ignore it. Well, you, you can plan for anything, right? You know, and, and as you know, I've, you know, here, you know, I've, I've discussed enough this, you know, over the years, but I've worked all over the world, and you can plan this in Yemen, you can plan this in Columbia, which is much more stable, but it's not, you know, traditionally as stable as a, a first world country.

And you just have to understand the dynamics, you know, and, and this, you know, the narrative is the hero's return, you Odysseus story, right? You know, we're coming back and, you know, the homeland has been overrun. So every day and every week and every month, there has to be a story of rooting out the, the traders.

And this, it sounds a little silly on a, on a global economic or a national economic, uh, level, but this is an example of it, right? There's 90, 90 deals and 90 days or no deals in a hundred days with two deals in three days. It doesn't matter, you know, if it's inside the narrative of the hero's return, then every morning when we wake up, there's a hero story coming to root out the whatever.

So, and again, you can plan for security and operations in, in more torn countries, you know, in the us you know, fortunately is not that at this point, but narratively it kind of is. You know, you're planning operations and, and budgeting assume that there may be some hero return story next spring where tariffs grow up 700% on the left-handed countries that were mean to us last week. I, I, I love your analogy 'cause part of my soul says that this is, you know, a, a fictional story here designed to create those heroes.

And if I look at the math around what the existing deals are, they haven't really moved the needle on the tariffs one way or the other, very much. So, Kate, should I just assume that the tariffs are gonna be relatively stable, give or take a couple of percentage points and proceed Along? We really don't have a choice, right?

Other than to proceed, because if you don't, if we just stop, what happens then, right? So we have to move forward with, with the, the littlest that we can move forward with. We don't have a choice.

In other words, it's concerning, right? In that sometimes I wonder, are we gonna negotiate ourselves out of everything and we're gonna be left alone just standing and being like, because nobody's gonna wanna play with us. I mean, I wouldn't wanna play with us.

Like if you were, if every day I woke up to a, a different strategy, how is that a strategy? You know, like, and that's what I feel like is we're expecting globally, like literally there's like a new strategy every day. And how do we, as a company, I couldn't imagine trying to make a strategy with a new strategy every day like that in itself doesn't even make sense.

So how do we get partners and solidify deals in what tomorrow may a country that is going to get hit with a very high tariff, you know, I, I being inside the security, I really, I don't know why I didn't like the term, uh, resilience. Um, but gosh, do we not need resilience right now? Do we not need to have this type of, um, strategy there?

Okay, maybe I can't do, um, a deal with this country and I have to shift really quick and maybe have multiple areas where we can take from. But, you know, that's, that's hard to manage, right? So, You know, this, this, this is a, there's a news show in the tech world and so forth.

And, and you know, I, I think a lot of people have opinions on this and I certainly have mine. I'll be happy to talk about them here, however, right? You know, it's, as a security person, I'm always coming into environments and saying, alright, I know you stated what you want.

I need to tell you what the reality is. You know, here's what is on the table for you as an organization, as a company, as a person, whatever. It's, and I, I find, you know, I look, I'm an American citizen, born and raised.

I live in Canada, my family's Canadian. I've traveled the whole world, and it pains me to say this, but this is the US us right now. You know, my Andrew said, you know, when someone tells you who they are, believe it, right?

The administration right now includes people like Steven Miller who has stated he'd like to see a US population of a hundred million. And we have an administration that that very specifically wants to have zero trade deficit with everything. And that's not a global trade system.

So it's an isolationist world, isolationist country where you can't really realistically do long-term business as an American company with international companies. 'cause the conditions absolutely will change, and they probably won't change in a positive way. So if you put yourself in that world and try to plan around that, it may not, uh, come out with a lot of good results, but it's the world you need to be in, I think.

Well, as Mike said, though, the deals we're seeing really haven't changed that much from the prior reality. And I think that, you know, the market has certainly written off kind of the anchoring strategy to these negotiations, right? We've kind of set the bar so far to the extreme, um, that kind of, nobody believes that's actually gonna hold for the long term, right?

That's, that's largely how kind of the world's behaving. Uh, I also wonder, you know, how much of what we're seeing is kind of the full story of what's going on, right? I mean, we're talking about tariffs, but it feels like there is a broader kind of resetting of the global order and the relationships we have, uh, across a lot of different vectors beyond tariffs that's kind of happening here as well.

So, uh, I don't know. I I, I take a step back from kind of the daily news flow and, you know, the confusion we're all kinda wrestling with in terms of the daily narrative. And, you know, I kind of, kind of say, I think we've anchored really hard.

I think the market's discounted that the reality of what we've actually seen come through is actually pretty pragmatic and not all that different than prior. Uh, but also it feels like there's something bigger at play beyond just tariffs here. Dan, I think, sorry, Dan, I think also IT leaders need to get in front of this a little bit because there's a history that says, you know, the amount of money allocated to it is usually a percentage of sales.

And, but, uh, if you keep thinking in those terms, you won't realize that how dependent upon the business is now on it. And so maybe the budget for it is actually larger, especially when you count in all the folks who are spending money in given departments. But is it time to have a more realistic conversation about just how strategic it is to businesses?

I think it is, Mike. I mean, you know, it, technology is the source of competitive advantage in, you know, almost every industry now. Um, so, you know, I do think a, you know, a slowly increasing, you know, kind of IT budget is a percentage of sales, particularly as we enter the AI era here.

That's probably the reality for the companies that win in the long term. Uh, you can resist it in the short term. I'm not sure that's gonna lead to more competitive advantage in the long term, though.

And I do agree, and, and Chris, I do like, you know, talking about level setting expectations, and then that is right, and something that has to be done. And I think, you know, to Dan's point, definitely AI could, you know, as much as, you know, we fight against this, but we definitely have to incorporate that into our strategy. Yeah, we listen to all, all the levers change, right?

You know, if it goes up, well, RD is the percentage of sales may go down because we're getting greater developer efficiency with coding tools, right? You know, GNA sales may go down as we're automating a lot of the back office, right? So, you know, I think everybody's afraid of taking it up too far.

But if you've got the offsets and other parts of the organization, I mean, I, I think Cloud did this really well, right? Cloud made everybody kinda understand the financial model of we're gonna shift CapEx to opex. I think with ai, you're really talking about shifting, you know, G and a and r and d potentially, you know, more into the, the operational tech spend.

And, and that may be a fine reality, but, you know, without the offset, I think it's a tough conversation for people to stomach. Well, I just wanna loop back from the, with a more positive note, because, you know, I I, I, I think I laid a lot of gloom there. However, you know, you'll find out if you're a first world country person, you go to a third world country, that business actually doesn't stop, right?

And I think what American companies need to get in is, is, you know, their minds is the, you know, buffer a lot of variability. I think you two are right. The tariffs are a lot of annoyance.

Whatever they are now is probably about the same. But don't be surprised. But they suddenly spike up 7000% in your area, but you'll, you survive a lot of crazy things as businesses, right?

Just don't fool yourself. One another way to look at this, to Dan's point, there are top lines and bottom lines. And if the top line is gonna suffer, there's gonna be a lot more focus on making the bottom line better.

And that's where it folks can shine. So I'm just saying maybe now's a good time to get in front of all the whole thing, right? Right.

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And yet there's been another merger in it. It seems like there's one every other day these days, but this latest one seems to really speak to the heart of what's going on with AI and data centers. Core Weave is buying outfit, coal core scientific for, you know, 9 billion in stock.

And, you know, that seems like chump change these days in the land of ai. But Kate, you've been dealing with this for a long time and you've seen these mergers and acquisitions. Are we at some level of scale now?

That seems a little bit on the mind boggling side. Definitely. Um, I think overall, uh, if we look at what is happening, um, from a, from one perspective, it's the idea that, um, you know, you're looking at core infrastructure, right?

Um, this acquisition will be, um, you know, will help I think overall on operational control and, um, will be very important going forward. Um, you know, reducing the dependency on third party, um, vocation, improving financing, financing flexibility, all that all becomes really important. And we saw it, right?

Uh, then you started doing this with Cloud. Now with this, yes. Dan, you've been an analyst for a long time.

What's your take on this deal? And are we at some sort of level of frenzy for m and a or what's, what's your feel here? I, I think this deal makes a lot of sense, right?

I mean, core Weave is really, you know, grown the way they have by making GPUs really accessible and really easy to use for developers, right? Like the software layer they've put on top of the kind of core GPU access that they provide, you know, through their NVIDIA partnership, that's really where they've kind of differentiated and, and really become kind of the neo cloud of choice in the market. Um, core scientific brings kind of the, the raw data center infrastructure piece, right?

The power, you know, kind of the, the, the site, you know, site, facility management, all of that. Um, I think this is just a classic vertical integration, uh, play. Um, makes a ton of sense to me in terms of the synergy of the two businesses.

I also think you gotta, you gotta love the deal, right? This is a nine, $9 billion all stack deal, all stock deal that gets the amount of $10 billion in future, um, kind of, you know, commitments and obligations on data center leasing fees. 6 in, in assets.

So, you know, for, for nothing they've, you know, reduced their future liabilities on cash materially. Um, added, you know, I I think a really synergistic, um, partner in the business and, um, you know, picked up a, a bunch of assets which will, you know, carry some pretty solid benefit, uh, balance sheet, um, balance sheet benefits to 'em. So I think this is a lot to like this deal.

This one's been long rumored, um, at least for a few weeks. This one's been kicking around. So, you know, where there was smoke, there was fire on this one.

But, uh, I think it makes a lot of sense. I think, Chris, we've talked on this show many times about the fact that we're building out more data center capacity and AI is driving that, but the flip side of that conversation is we don't have enough capacity right now, which is kind of putting everything in a premium. So are we gonna see this wave of consolidation?

'cause the math would suggest that supply and demand is gonna create an, an imbalance in the force, as they say. Well, Let, let me speak to, uh, well, well, the, the, the supply part, you know, I guess the demand as well. But you know, we've, you know, I've got a lot of opinions about how we're doing and what we call AI right now, and I think it's wonderful.

It's fantastic, it's transformative, and we're doing it. Lemme just, just to keep it simple, all wrong, all, all of it, right? And the fact that we, uh, on a, on a, on a DHS call yesterday, uh, interesting, uh, conversation about this.

And, uh, you know, one of the points I was trying to make there is, is we're trying to take, you know, like this complex semantic engines and get them to do math, right? You know, to be clear, AI doesn't have any idea what 42 is. 1% of the effort.

And we're doing that because it just works. But it's such an incredibly brute force approach that we literally have, you know, national global grid issues and energy supply issues because we're just trying in, in the last 36 months, you know, this is not, you know, long-term planning. This is a phenomenon that has rushed forward, and we want these monolithic individual models, each of them using enough power to run a smallest town for a year to make us the picture of a cat.

And, you know, how enthusiastic I'm about the technology, but I think the next step is, you know, for all, I have biases in this obviously, but distributed civic AI sort of approaches rather than in, you know, isolated, monolithic, massive models. So I, I agree with you, Dan, I think logistically and, and, and corporate and financially it makes sense, you know, it is yet another, you know, national, you know, nationalist is isolationist approach, but I don't think is wonderful. But more than that, it's just a, it's an example of, you know, of the, uh, you know, build a, a battleship and sail it up a creek type of approach that we're, that we have with ai.

I love your examples, Chris. I I mean, they're, they're really, they're right on. While we see this problem and how we attack the problem is, is very interesting.

So we went and, you know, this was definitely a major issue in how do we, um, do this, you know, basically this consolidation and, um, I, I love the analogy. It's, it's exactly what's happening. You know, we build the battleship and, you know, Yeah.

We, we've just are just, just in recent days started now analyzing this goes, 'cause for our, as a company, we're taking a different approach and I'm willing to, to, to find out that we're wrong in this one. But I generally think that we can reduce electricity usage and get better benefits out of what we're calling ai, uh, reduce power usage by 90 to 99, 9%. Totally agree, Chris.

I mean, ultimately a different architecture is needed, right? You know, So to that point, how hard will it be to make that shift? Because, um, historically, Kate, let's start with you on this.

You do software, but, um, you know, we start out with, you know, let's just build something and hope it works, and then we consume all the resources and then we spend a lot of time figuring out how to optimize it for the next several years. And I feel that's kind of where we are with AI and maybe the hardware folks are overestimating how much data center capacity we're gonna need. Absolutely.

Uh, we are, you know, building the plane while it's flying, right? That analogy that we've used forever. And that's, I agree that that's what's, you know, happening here as, as well.

I, I think once we get, I, I don't feel that we strategize well and we are still a very re we are so reactive. It is concerning how reactive we are. I think if, you know, if we were just to sit back for a moment and to really think about how we wanna move forward, but we rush to build everything and then I, yeah, I think we're gonna have a bunch of these, you know, huge data centers that aren't in use, quite frankly.

I think, I think if anything, AI will actually, if, you know, again, you know, what do we call AI and what, what our, you know, machine learning and everything. But I really think that there's so much potential there that it could actually minimize this footprint that we're building furiously. See, I'm more bullish there.

I mean, I come back to the deep sea moment in that, you know, that phrase Jevons paradox that we all came to know through that, which was basically, you know, as the cost of AI comes down, we're gonna have more ai. I mean, think about all the use cases for AI where the cost of training, the cost of inference today just doesn't justify the value. If we can bring the cost curve down, the number of use cases continues to explode.

Um, so I tend to be pretty polish on it, but, you know, I do think, you know, we are getting these architectural changes, right? I mean, look at the big innovation in NVIDIA's latest generation of Blackwell, right? It's the move to rack scale computing, which, you know, that's a nice term we use around ai.

I think historically we would've called that system level design, right? You know, we've moved from making a chip and outsourcing everything downstream of that to really starting to build this, you know, into a, you know, a, a system level thinking exercise around all the componentry that needs to come together to make this scale. Um, and you know, I think Jensen has kind of told us this, right?

I mean, he's basically said we're improving generation to generation to the degree to which we're gonna obsolete our prior generation when we introduce a new generation, right? Which certainly causes problems for somebody like Coral Reef, uh, to call back to our earlier topic. 'cause they're, you know, spreading that depreciation over six years.

Um, and I think, you know, Jenssen's telling you it's more like a one year depreciation cycle. So, um, we'll let the accountants sort that, that discrepancy out. But, uh, I think it's, it's really this move to system level design, you know, and the AM MD's going there with their next gen, um, you know, MI series, uh, that rack scale computing, you know, kind of approach.

And let me, let me really clear on this. I, in the last 90 days on this show, I have, I have converted, I have got religion. I not only, you know, believe in all this technology.

There's absolutely no going back. Um, world War accelerating the future, however, right? The, you know, and this is a per perfect form to do it because this is a, an artifact of words.

We are talking to each other, we're sharing semantic structures, we're building our heads, saying it out loud, saying to each other people of whom are watching it. And we're talking about artificial intelligence, which is to be clear, the worst acronym in the, in all of technology ever, right? It's been used and applied to literally everything from cogs and springs to anything.

And what we're specifically talking about here is semantic, uh, systems, systems built on words and meanings. That's what we're calling ai. And it's not artificial.

It is literally semantic systems. And is it intelligence? I frankly, I kind of think so, you know, certainly more than most though, even the standard model chat, GPT sort of thing is invisibly conversational, um, artifact.

And as I've come to found out, find these advanced models, you evolve the system, uh, based on the technology today. And if you can tell the difference between that and a person, good luck. Um, and that, and we're just started, but we did, we built it all in, in silos.

And it doesn't make any sense. We put 'em in cages because everything we think about in sci-fi with artificial intelligence means that we had to build it in a cage in case it goes nuts. Um, and that's ironic because you build something outta words and feelings and put in a cage, it acts weird, right?

We need to socialize them and connect them and make them age agentic and whatnot. And we're doing that now. And when you do, you find out, no, you don't need to stand up, you know, Einstein to screwing up a screw.

But sometimes you do, you know, we are building AI infrastructure now based on mostly small devices, raspberry PIs, normal computers. We're all talking to each other all the time doing various things. Yes, sometimes you need a GPU and you need somebody to pop up and be really cognitive.

But as you, you know, as, as I work with these systems, I, and discuss it back and forth with them, we shut down as humans. We don't think really well when we're doing cubicle tasks. Neither do they, you know, that doesn't require, you know, 3000 gigawatts.

That's a, that's a lot of the work we do as clockwork. Dan, here's the part I don't get. So GPUs existed long before AI existed, and then we got lucky, right?

When somebody discovered that GPUs are great at parallel processing and we can do jobs for ai, but there's still a lot of overhead in those GPUs that has nothing to do with ai. And we've seen the rise of these other AI accelerators from various folks. And I would argue that NVIDIA is probably gonna have to create an AI accelerator obsolete.

Its GPUs and all those AI accelerators will be more efficient than the GPUs for AI workloads. And then maybe we won't need as much data center capacity, et cetera. So it's not just a software issue, I think it's a processor hardware conversation as well.

Or am I crazy? No, I, listen, I think it's both, Mike. I mean, you know, if you look at, uh, kinda what we forecast at futurum, you know, visit our futu intelligence platform, take a look at our XPU forecast.

Um, listen, this, this market is, is growing at an incredible rate. Um, not only is there room for a ton of GPUs, and I think we'll still see really dominance from the GPU on the training side of things, but, you know, these specialized AI accelerators from the likes of Broadcom and Marvell and, you know, the hyperscaler partners that they're working with, um, you know, number, number of other, you know, companies out there that are innovating in this space. There, there's room for all of them.

Um, you know, I think we'll continue to see more specialization, more vertical integration. Um, but, you know, I think GPU ultimately will probably lose share of the market, but it doesn't mean they won't continue to grow at an incredible rate. But I do think some of these alternative architectures and, you know, some of these other approaches, particularly on the inference side, uh, they're viable.

Uh, they're, they're very much viable and, you know, potentially have better total cost of ownership. I mean, look at some of the, the data coming out of our, our Signal Labs, uh, groups on, you know, TCO around some of these, you know, solutions from an A MD and others. Um, there's a compelling case there.

I think, you know, what we've seen, you know, in the market leading up to now is this really this trend towards heterogeneous compute, right? Building, you know, a specific tech stack for a specific use case and a specific workload. And I think we'll continue to see more and more specialization, but general purpose GPUs probably still really the dominant force on the trading side for the time, time being and, you know, for the, for SQL future.

All right, folks, we got a long way to go between now and then, but I would just close this segment out by noting never been against innovation 'cause you'll lose. We'll be back in a minute. com is the leading resource for news analysis and education on challenges facing the cybersecurity industry.

com covers all aspects of cybersecurity, including data security, DevSecOps, cloud security, application security, network security, security threats, and more. com has the largest selection of security content featuring breaking news, blog posts, podcasts, and more. com to learn more.

com. Home of security bloggers network. Hey folks, we're gonna shift a little bit of gear here, but at least the one thing we will continue to be talking about is money, but we're talking about it in the context of cybersecurity.

The US Treasury is now sanctioning, I think it's called AZA Group, and they have something called a Bulletproof hosting service that they provide for folks who engage in ransomware and info stealers and drugs and all kinds of stuff. And Chris, I feel like the conversation around cybersecurity is finally changing. And it's not just about, you know, how, how many more firewalls we can put at the edge.

We seem to be going after the bad guys more directly. And I'm even gonna relate this back to a conversation I had recently where Cisco, where people are now manually tracking where the network traffic comes from, and they're cutting off access to the pipeline for some of these spokes. And is the whole play around cybersecurity just getting better and smarter?

Finally, I I, yeah, first thing I'm gonna do is give a shout out to Pete Herzog, who's out there doing the good work. You, and sometimes you gotta shut things down and, uh, you can check on LinkedIn and, and see a, a post from him just, uh, today, the other day about this. And his short answer was yes, right?

You know, that that's, you know, focusing mostly on cybersecurity for my entire career. I, I'm, I I'm, now that I'm old, I'm appreciating the fact that I've been saying all along saying, we're not, we don't suck as much as we think. We didn't do that bad in 99, we weren't that awful in 2007.

We're not doing that bad now. We've been building up structure for a long time now. Uh, and right here in the middle of the decade, I'll say what I said in 2020 to friends, mostly just to, uh, disturb 'em up.

But also because I mean, it, you know, this is the last decade of cybersecurity, you know, I mean, we're not gonna go on forever suddenly saying, oh, threat intelligence. We try, oh, we know. Has anyone know threat?

No supply chain. Oh my God, we never thought of supply chain. There is a finite number of major blocks of cybersecurity.

They were all out line by the early pioneers, you know, before, you know, anybody on this screen, including myself, got involved. And we're slowly working our way through them. And everything else we're talking about on shows like this shows the path, you know, I am working on, we are working on, on, on A POC right now that will get a software bill material at 400 milliseconds to a aerospace rocket flight engineer af you know, from request to return across three steps in supply chain because the systems were all there, the components that, you know, including the semantic systems we've spent all our time talking about to do that in the real world in real time.

So things like, you know, going, you know, I I, I, I like the Lone Ranger. I like going after bad folks shutting me down. I'm a big fan of that.

But the big problem with cyber security and more importantly narrative integrity these days, is how hard it is to be a bad guy. Cybersecurity has been weak enough, despite the fact that we've kept built the internet and kept it running, that anybody who really wants to can just be a malicious actor all day long and make money on it. And, and on the global scale, you know, on top of that is the narrative layer, which is being hacked for, for profit, you know, and, and control.

So, but we're closing in on it, you know, we're getting better. These signs are good signs. You know, just if you looked up the Pete, uh, Herzog article, by now you notice that some official organizations aren't really, you know, you know, uh, public and private always following up on that because we haven't always been there, but I believe we're getting there.

It's, it shouldn't be so easy to hide in the dark and do bad things in cybersecurity, especially not anymore. Kate, is there optimism in the world here, or is it, to Chris's point still too damn easy for the bad guys to be bad? It's still, um, very easy for the bad guys to be bad.

Uh, I think that we still don't have a great strategy in order to tackle this, meaning that we've seen, we've seen these threats over and over again. We've seen the bad guys, um, the threat actors, bad threat actors get together and have, you know, $3,000 for this malware, 24 by seven support. We've seen this, right?

We've seen this forever do, are we making a step in the right direction? Yes, we are. Do we need to do it together collectively?

We do. We, we really, and that's something where I see, um, hope is that we're actually doing this together, Right? And let, let me, let me just, you know, just be clear because I, you know, I, I, I think, I don't think what we just, you know, I don't think shutting these people down does any good whatsoever, right?

I think it's a good thing to do. I think we're getting to the point where we won't have to do it all the time, but it's like, you know, look, the war on drugs, the US war on drugs, to be clear, all the money spent on all the drugs that addicted did do, you know, stop bad guys and criminals, but didn't stop any American from doing, getting and using all the drugs they want. You know, shutting down these, these, you know, cyber criminal organizations is good.

They're bad folks, but some of 'em will fill their spot until, to your point, okay, we have strategy and we, we coordinate it, or we have the tools in place where it's just not so bloody easy. And, and I, that's, that's where I think, you know, my optimism. Optimism is, I think we've been moving for, for a long time.

I think, again, everything we unfortunately call AI is going opportunities, you know, today and in the next couple years to really make it hard to be a bad guy. So we're not having to try to just put them in jail and so they can get replaced by the next one. Dan, to Chris's point, and we've been just overly obsessed about tech and cybersecurity and not really considered the fundamental economics to change the equation.

And, and I don't know, are there things that we could do collectively as a, as policy? 'cause I know you follow policy in Washington, so, you know, I, I always feel like there's, there's somewhere of a disconnect in all these agencies running around, but nobody seems to actually say, what are we collectively doing together? Yeah.

Listen, I, I think the macro trend we're seeing in the cyberspace is that, you know, the, the value is really shifting from, you know, going after these individual bad actors to going after really kind of criminal enterprises and state sponsored bad actors, right? You know, the, the, the challenging part is that, you know, this is market forces at work. Like unfortunately, you know, creating cyber crime is good business.

Um, people are making money doing it. And you know, I think as you've gone away from more of the individual bad actor into more, you know, organized criminal syndicates, you know, you're opening up a lot more tools in terms of how we address this. It's not just a technology issue.

Now you've got, you know, uh, legal routes, you've got banking routes, you've got all of these different things you can be doing to kind of really circle in on the people who are doing this at scale and the people who are really doing it, um, at a level of disruption that goes far beyond any sort of individual bad actor, you know, kind, you know, bad actor, kind of the, you know, the, you know, the basement dwelling, you know, uh, you know, uh, identity steel or, uh, you know, that that's not really who we're focused in on so much anymore. Um, I think it's, it's getting, you know, getting harder for those folks. But, you know, still relatively easy.

I think the, the, the tone is really shifting to the organized crime side, the state bad actor side and, and really, you know, leveraging tools beyond technology that go down much more of the kind of finance and legal, you know, routes in terms of how we address kind of the core issue here. Integrating, I'm sorry, Mike, but integrating geopolitical intelligence becomes part of the strategy, and that really needs to be seriously looked at. You know, we're not, regardless of how we try to be isolations, we're not, we, especially with cybersecurity, right?

We all have to play together and actually share intelligence, which is the antithesis of how we think, right? I, I feel we have not been brave from a company standpoint, from vertical standpoints where the attacks have now become cross vertical, uh, vertical industries. And yet we still hesitate to share.

And I, I think it's important to, to, um, gather this intelligence and geopolitical intelligence in order to fight the latest threat. Yeah, I mean, back to your po you know, point on policy, Mike, you know, I, I think we're, we're so much so focused on kind of the bad actor side here. You know, a lot of what we can do is, you know, sometimes the best cyber defense is an educated user, right?

Like, what are we doing from a policy perspective to really teach digital fluencies, you know, early on in, in schools and academia, right? I mean, that's, that's a valuable life skill for people to, you know, kind of graduate out of their education with is some level of digital fluency, uh, you know, best practices. You know, kind of being a, a smart consumer here, you know, can prevent a lot as well.

Yeah. I, I'm gonna, I'm gonna, uh, mirror Elon Musk here just just to show that, you know, uh, uh, politics is, and everything, you know, patents and all this, this, this, I try to understand everybody's position, but for, to be clear, for my entire career, I've helped people figure out their security. Well, personally, I secure very, very little in my life.

Now. What I do secure is secure. I actually taken care of it.

I'm not trying to feel good about it. And the rest of it, I honestly believe that transparency is better, faster, cheaper, safer, more resilient, share everything you possibly can. So you only have to worry about those last little bits.

And you'll find that not only do you save a lot of money on security and a lot of time in your business, your operation, your life, whatever, it's get more done. But there's all sorts of advantages. In case you said that, you know, if you don't share this sort of intelligence, if you think it's that important that nobody knows, you know this about that, then you're all alone.

And, and our threat actors are not. So how are, how is that gonna work out? Um, so share it all.

Are we need, To your point, we're also spending a lot of money securing data that's no longer valuable, but just 'cause we store it and we kind of keep it forever. But, um, Chris, you know, I look at this sometimes and having grown up in New York, every time there's a downturn in the economy, there's more people working for the mob. Is that how that works out here in land of cybersecurity?

And we see a global downturn that there'll be just more people watching ransomware kids because they're easily available, and is there a correlation between the global economy and cyber attacks, or is that too simple a metric? Well, that, that could be an opportunity. I was hoping to, to riff on what you said, Dan, right?

You know, because I'll be clear, if you're a young Russian citizen living at home and you're any good of the computers, get into hacking, the FSB will give you tools, they'll help you make money, and anytime you break into something that they want, you know, they'll, they'll, you know, give you a dasa or something, right? That's just a better career plan than anything else. You know, the Russian economy has to offer you right now.

That's the reality of it. So yes, when, when we create these opportunities for there to be these economic benefits and someone else has the budget, yeah, they will pay you, you know, to be a nefarious hacker. That's just the way it's, and until we have systemic solutions to that, that's, it's a, it's a bi it's a, it's a nutrient gradient.

You know, things will grow there. Also, you know, Kate to, if I look elsewhere in the world in certain countries, it's now considered patriotic to go hack in other country systems, and that's part of their culture as well. And some of them are even funding their economy doing this stuff.

So, uh, do we really understand the motivations of the bad guys? You know, I think at the end of the day that probably primary motive, even though, you know, um, I think it's still money. I, I think it's just little money, you know, how am I gonna survive?

And, and while it's not that we don't have, you know, nation state sponsored the tax, but at the end of the day, I mean, we're, we're wrecking. You are either wrecking you're making somebody's day really bad financially, or, you know, or even from a financial motive on the other side, I'm gonna do really well today because I've Yeah, done some ransomware, you know? So at the end of the day, I think it's more financially motivated than anything, even though, yeah, Dan, Dan, I, we live in Boston, right?

And I'm in New York and last time I checked there was still mob families running things. It's just maybe not as much outta control as it was two decades ago. And so my question is, will cybersecurity, cyber crime always be with us?

It's just a matter of how much, you know, we can tolerate to what level? Well, I think, you know, throughout the history and society, crime has always been prevalent, right? You know, we, cyber is just a new venue for it, right?

We've created a digital world in addition to our physical world. Um, and, you know, crime has found its way there too. So I, I continue to come back and, you know, Kate, us in on this, it's about the money.

This is economics, this is market forces at work, right? Um, this is no longer something we can only solve with technology. You know, we need a belt and suspenders approach.

Technology plays a critical role. Um, but it's economic, it's policy driven. Um, you know, it, it's gotta be addressed at all levels if we really wanna make a dent here.

All right folks. Hey, you heard it here. Even today in New York, if you were still walking down the street with your wallet in the back pocket, bad things are gonna happen.

So be smart out there. Hey guys, I wanna thank you all for being on the show and kinda sharing your thoughts and insights As usual, they were awesome. And I wanna thank you all for watching the latest episode of Text Drawing Gang.

And please stay tuned for the lineup right behind us 'cause there's a lot of great, awesome content on text drawing tv. We'll See you next.