AI Infrastructure, Data Center Fires & Outsourcing Risks | TSG Ep. 940

Data centers on fire. No, literally data centers on fire. You're watching Textron Gang.

Hey everyone. Happy Wednesday. Welcome to our Strong Gang Show for Hump Day.

We've got a lot to talk about. It's been a busy week. I feel like we put a week in already.

It's been a busy week, but we've got some interesting stuff to talk about with some interesting people. Let me introduce you to them. We've got our friend Chris Blak, the one and only Kate Scarcella, Dan o Dan O'Brien, and joining us from Barcelona, Mike Ard.

Hey, Mike. Hey. You able to get the Yankees out there?

I'm gonna find out in a couple hours, but, you know, wonders of the internet being that was yesterday. Yeah, This is true. All right, let's jump into it.

So, you know, we spent yesterday talking about the, uh, exciting news on a MD and, and, uh, open AI the day before that. More exciting news, it seems every day there's exciting news around AI and data centers, right? I was talking to Dan o yesterday or the day before.

You know, something like half of the growth in the U-S-G-D-P this year can be attributed to AI and data centers. JP Morgan put out a report now for the first time in a very, very long time, consumer spending isn't driving the GDP growth. It's actually AI and data centers are bigger than consumer spending.

Consumer spending is usually 70% of GDP. You know, are we in danger of, of kind getting in over our skis here? Can, can AI momentum outpace our ability to, to, to build out the infrastructure?

Mike, what, what's the deal? All right. Well, we have two things to talk about here.

One is there's a report from our friends over at Volter who confirms that well, demand for AI is far ahead of the available AI infrastructure, and we're not able to keep pace. And I don't think that's gonna surprise many people. However, at the same time, Fujitsu and Nvidia have been talking about a new design for AI applications and AI agents in general, and a lot more integration at the silicon level.

So you would see GPUs more tightly integrated with cpu, in their case, their arm processors, but also there'd be asics and networking and infrastructure all built into the system at a much lower level. And Dan, I'd love to get your impressions on this. 'cause I wonder if a lot of the stuff that we're using today might seem fairly antiquated soon as we look at these new platforms that people are building.

And are we finally building platforms that are made for agent ai? Yeah, well, I think we're getting closer, Mike. Um, you know, we've thrown, you know, really general purpose.

GPUs a lot of work on the software side as well as the hardware side over the past several years on really building efficiency and right, the move to rack scale systems, you know, getting to the point where we can get much higher utilization rates out of existing GPUs. Uh, that was a lot of what was behind the news yesterday with, uh, open AI and a MD was, that's really the first AMD's first rack scale system, which integrates this all much more tightly. Um, and I think, you know, there's, there's certainly a mindset out there.

I mean, you look at the power, yet the power efficien, the power efficiency of the human brain, we're a really long ways away from that. Um, and so, you know, I do think we're gonna continue to see more and more efficiency gains. You know, there's a lot of people out there that believe, and I probably count myself as one of 'em, that we need a fundamentally different architecture to kind of scale AI to the point we're eventually gonna get to.

Um, and I think, you know, a lot of the announcements here of like immediate jiujitsu, you know, they're all incrementally moving the ball forward on that map. Um, I mean, just, you know, recently as we moved from, you know, LLMs into more of the agent world, you know, you're seeing 10 x tokens and under x growth in compute. So, you know, the, the type of AI we're doing is we're getting more reasoning.

Um, and some of these, you know, and more advanced styles of gen ai, uh, the compute demands are just off the charts, right? You know, we're, we're years away from, you know, catching up on the supply side as we build out this infrastructure. And, you know, there's a couple gating factors there that we're working with too, right?

We're hearing more and more that it's really about the power supply, uh, but also, you know, there's not enough chip making capacity to build all the chips we're gonna need for this stuff. And I think, you know, TSMC being somewhat of a monopoly in the market, you know, is pretty good at kind of policing that overbuild on that side of things feels like we're really gated by the power at this point. Uh, but an enormous amount of compute will still need to drive over the next several years to get su supply to catch up with demand.

But lots of incremental innovations that will happen over time. And I think, you know, ultimately a fundamental architecture shift. I think we're, you know, right now in kind of the system level design thinking, but, um, still using a lot of the, the same architectures we have that that will certainly have to evolve the coming years if we ever want to get power efficiency down to the point where we can actually afford all of the supply that we, you know, seem to need on the compute side of things from a power perspective.

Y you know, Dan, what you've just described is exactly the issue why we always want software versus hardware. Because software as we improve it, you just update your software, right? It's a download.

It's a di the old days we put a disc in and you got, you got the next version. It's more efficient, it's better, it's faster, it's everything else. With hardware, you can't just update your hardware, especially when, you know, you're, you're literally putting hundreds of billions of dollars, trillions of dollars into building out these hardware factories.

And even though it's incremental, the drag time between how fast the human brain can design AI assisted, of course can design new hardware, you know, uh, con configurations versus the time it takes us to actually build those configurations. It always seems like we're going to be driving last year's model next year, right? Yeah.

We're building like the world's fastest depreciating asset. Yeah. But we're gonna need to shrink, you know, the IRS is gonna have to come in here and let us, you know, write it off after 24 months 'cause it's obsolete.

Um, It does feel like there's some sort of financial engineering bomb around the depreciation schedules of this stuff that will eventually hit the industry, but, yeah. Seems like knock down the road for now, You know? And what about, you know, how tech people are?

We always, we want the fastest shiniest, you know, trinkets. Now, we don't wanna wait. What, what's, what's a tech bro to do?

Chris, I saw you had your hand up. I, I'm just thinking, you know, I, I love this. You know, for me, we do this show once a week, right?

And we've been doing it long enough and we all the terabytes of video, much less the exabytes of stuff we're talking about as I'm listening to this, I'm thinking of these tiny little attestations between us. Like literally Dan, you remember a, a power conversation a month or so ago talking about the grid, you know, and we're all, you know, adamantly agreeing, we need more power and all these little spots, you know, week to week through this year stitched together. And the the answer is to these questions are, are in there, right?

You know, so whether it's, you know, from the power issue, yes. The way we're scaling power, you know, is queued up for, for this segment. The grid actually doesn't match the expectations.

But we're going to do those things. And you know, we, we've had a couple conversations about the architecture and workflows and workloads. You know, we're, we're putting everything in the massive ai, you know, to do math or, or to, you know, change the capitalization in, in a paragraph.

And on this, as I've mentioned before on this tiny little laptop back here, there is LLM running. This is for Clifford Brewery. Shout out to Darlene and Clifford, who keeps the management there, keeps all running and of the benefits of all this stuff.

So we've been working up and down the, the supply chain down to the micro business, the underserved who has a million different applications. And all the stuff we talk about here hits them coming and going. They can't see it coming.

But these systems we have now allow us to serve that need. And when we talk about this ai, we're talking about taking little bits of human text and turn into data and vice versa. So people like Darlene and operations like Clifford can do what they they do.

And if it works at the foundation like that, then maybe these e esoteric things we get to talking ahead about here actually matter, because the, the physical grid is not moving faster than, like you said, Alan designing things physically implement. These are huge, long pro uh, projects. A lot of the tra trajectories that we're predicting, living, experiencing right now don't match those.

What are we gonna do? Maybe some of the things we've talked about on the show are, are right, we'll spread it out. We'll get more intelligent and we'll do all these things.

'cause Oh yeah. We're, we're, we're embedding AI in everything. The benefits are too huge.

So something that we've talked about though on this show has been the idea that we are building for tomorrow, um, on yesterday's thought, on yesterday's architecture, right? And Dan, you've talked about that a lot, about the architecture. Um, AI is sprinting on a runway.

We haven't finished paving. And I think with that being stated, I I do think the architecture is, is changing. I think it will actually become more distributed, uh, for a lot of different reasons from a sovereign perspective, right?

Um, having, you know, to have agency over, you know, geopolitical, our, our, our data, right? And I think the whole architecture of a cloud model, it, it, it's not gonna work for, for the chips that we're building. And, and it doesn't even really make sense.

0, um, distributed model, I think. And yeah, I mean, and it, it will make us, um, more resilient and everything. Again, I think we're building on, on, it's almost like we really have to start thinking differently.

And we're not there yet. I think we're, we're there to do that. So, So Kate, follow up that thought for a second.

If you would, do I, as a developer, let's say I'm building some sort of agent AI app and I'm starting it now, do I assume a level of compute capability that might be available a year and a half from now? Or do I kind of not trust that and I just go with what I know I personally would, would go with the chips that we're not sure what are what? 'cause we're not utilizing them that, that we know for sure we're not utilizing those chips to their fullest.

And I would go for it. I think the one who goes for it is the one who's gonna win. Oh, I was just gonna say to me, the, the long pole in the tent here feels like power.

You know, the, the total capacity and the location of it. And to me, that's ultimately gonna drive the constraint based thinking across the industry. You know, there will be somewhat of a power ceiling needed design for, and, you know, I think we can count on innovations down at the hardware level and then spilling down at the software level that allow us to essentially accomplish, you know, kind of what we need within that envelope.

Uh, that to me is, you know, kind of the right way to think about this. Um, I think the chip market will, you know, basically builds, you know, to the point where, you know, you can deploy it and you've got the power to run it. Um, that's kind of the constraint on the upside of the chip side.

Um, but you know, there's, there's a lot of levels at which, you know, we can optimize here. You know, we're, we're very much still in the build and move as fast as we can phase, eventually we're gonna hit a little bit more of a plateau. And that's when you tend to see those real efficiency gains kind of come through, right?

Because the data centers we're building today, they're where the power is and the road of power is gonna be, but that power is gonna sit there and that power will be relatively consistent for a very long period of time. You know, ultimately, like tens of generations of chips will probably come through those data centers and, you know, think about the amount of compute you're gonna be able to get outta that data center 10 years from now with that same power envelope versus the, you know, amount of compute you're able to get it out to out of it today. Um, that, that's gonna be a, a tremendous increase.

And I think, you know, right now, early in the cycle, little bit harder to see the light at the end of that tunnel. But I think once we get a little bit more mature and that efficiency starts to really compound, that's kind of what we'll get out of this, you know, spiral that we're in right now And, and all, all of this because, because now we finally can, you know, I like looking for patterns that, that are, they've always been there. They're sort of inevitable to fill in.

And then whether it's cybersecurity, the internet writ large, I mean, Kate, you've touched on one of the key things, and when you said that the, the resonance, like literally Darlene, again, I told you this one, right? Um, data sovereignty, because to date, I mean, if you're, most companies, much less small companies have 'em help you, the millions, tens of millions of micro businesses, your data is out there with somebody else. But it doesn't have to be because Moore's Law, blah, blah, blah, you know, the, the amount of data, you know, you actually care about as an organization, as a person, whatnot, tend not to be that much.

And no, it doesn't have to be in the cloud, and it doesn't have to be somewhere else. You could actually have it all right here because storage is cheap and compute is cheap. So you follow these curves up and you find us doing things because we finally can't.

Not because it's radical, it's because the way we've been doing things aren't really the way we wanted to. We had no choice. You know, 1999, 2000, 2001, I'm, I'm out in Colorado, near Boulder.

I'll, I'll give you some names. Interlochen. Anybody ever been to Interlochen, Colorado, right outside of Boulder, right?

Uh, I forgot the hotel there where they have some good, the Omni the Omni Hotel. They had some good conferences there. com company.

And when you got to Interlochen, it's in the foothills. And as far as the eye can see, you saw two and three story buildings with companies with names like level three. And, and, uh, was it Quest, be Pack Bell West became Quest or something?

They, they had a few names, eventually Century Telecom or something. And there were, there were all of these fiber carriers, and then there were, there was the storage companies, mixed storage, storage, tech storage, this store that, as far as the eye can see, because we were building out data centers all over the place. This is when Northern Virginia became the data center capital of the world.

We had a beautiful one over in Tysons, you know, and it was the same thing. We've gotta build storage centers. And back then it wasn't, power wasn't the limit, it was bandwidth.

We couldn't, we couldn't, you know, you could build the biggest g*****n machines you could with big racks, but if you only had a straw to send the data through, it wasn't really doing you much good. And, and we had these same conversations, same conversations we're having now, and then the bubble burst. So it Took 10 years.

I would go for so far to say though, like, if I look at the last decade, hardware was kind of boring commodity. And then GPUs came along The last decade, the last 20 years, 25 years, when was the last time hardware wasn't boring, But, but I'm surmising or at least postulating that hardware might be cool again, as I look forward to see what people are starting working on and all these engineering things that people are talking about, for example, what Fujitsu was saying, that stuff's all gonna be crucial. So I don't know damn hardware cool again or what Hardware's very much cool again.

I, I think it became cool again, probably during the COVID pandemic when everybody realized how critical chips were to pretty much everything you make, you had a hundred thousand dollars cars sitting on the lot, uh, lot 'cause of a Tencent by per controller. Um, and I think it's, you know, it's become more mainstream, you know, ever since. But I think you're right with, there's a ton of innovation happening, right?

You know, whether it's, um, you know, some of the, you know, other instruction sets like R five, um, you know, new IP out there on the compute side, you've got in-memory compute, you've got analog AI techniques which use extremely low power relative to the type of stuff we're seeing today. There's a lot of innovation that's in been incubating during this, you know, unsexy period for hardware. And I think it's gonna have its stay sometime in the next, you know, next decade or so.

All right. I was, I was, I was just going, I was just going for cool there. I didn't go all the way to sexy, but, okay.

I think even back to a hardware. Cool, cool. Now because you know, it, you were talking about chips and, and you know, to be clear, almost all chips are sitting there doing nothing almost all the time because our systems, we just, you know, we've overloaded the hardware because we had no choice.

But now we we're smart enough and we can make complex enough systems that go back and use the old hardware to do things. You, you know, you could never imagine. We're doing it now.

It's fun. Good stuff. Hey, we we're a little over on this segment.

I'm gonna need to pull the plug on this one. Let's take a quick break here on the gang, and we're going to come back and as I promised you at the outset, data center's on fire. Wow.

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Hey folks, we're back in. Yes, this is Alan alluded to, we're having an issue with fires and data centers. It turns out that there are lithium batteries that tend to blow up and systems get overheated.

And well, maybe the most important thing that any AI company can do is make sure there's a firehouse nearby. But Chris, does any of this kind surprise you? And are we gonna see any more of this stuff before maybe it gets better?

I don't know. You know, the metaphor kind of writes itself. You know, AI just doesn't burn cash and carbon anymore.

It'll burn your actual racks. Um, it, it, it comes, you know, as we said in the last segment, you know, it comes back to these issues we keep talking about. You know, the demand is real.

You know, the demand is real. The market and cash will, will land and market and cash lands, heck we'll build things. And is the, are the actual, is the infrastructure altogether?

We're sort of, well, well, al al you know, my, you know, my boating experience. Like let's build boats while you're sailing 'em and, and so on and so forth. See what happens.

That's what we're doing. So yeah, sometimes things are gonna burn down, right? You know, when your ambition is melting your racks, right?

That's just, you know, hubris with a warranty, but, uh, hubris with a warranty, nothing particularly surprising here. You know, look at it as indicators, right? You know, as a, a individual, you know, fire event is always a bad, bad thing.

But looking nationally, globally, you know, we're building 8 billion of these. Some of them pop because heck, there's no infrastructure there. And we didn't think this through very well.

Maybe there's steering lessons. How many of you have actually managed a data center or I worked for a company managing data center. So I, I have too, one of some of my funnest times was checking out the fire systems, right?

The fire suppression systems, what's the stuff they use? It's not, you know, it takes the oxygen out of the rooms. It is a chemical halo, right?

I thought it was, it's halo. You know, I thought we've licked this problem already, Apparently not. Because I think part of the issue is the lithium batteries that are being put into the backup systems are at the core of the issue.

I think, Dan, Yeah, no, I think you're right, Mike. It's the batteries. We've introduced these, you know, really, really difficult and sary devices in as part of the backup storage here.

And the big takeaway for me is, you know, fire safety comes in. It's an architectural decision. When you build a data center, you don't, you don't plan for a fire by having, you know, brave souls show up on a truck.

Like this is truly built into the design, right? You know, compartmentalizing, you know, keeping servers further away from batteries, having fireproof barriers between them. I mean, it's really built into the industrial controls of the data center itself.

Um, but, you know, beyond just the, you know, the prevention of fires for, you know, all of the, the risk it poses the, you know, health and human safety and all that, but the economic impact that these things going down is tremendous. I mean, it reminds me of similarly when a, a semiconductor fact goes, you know, as the firing goes offline, I mean, it's hundreds of millions, billions, maybe tens of billions of dollars in, in, you know, lost opportunity for these things to come off, right? I mean, you know, what Jenssen's quantified, uh, you know, a gigawatt, uh, data center is, you know, roughly equivalent to like, you know, $50 billion in value.

Um, in terms of, you know, the amount of compute capacity you can sell out of it. Um, these things coming offline is not only gonna be really economically damaging, but you know, a lot of mission critical, you know, critical services for, you know, our economy and our society. You're gonna be running in these things.

And if you add a massive data center come offline, that's gonna ripple through and it, you know, it impact everyday people, um, at a certain level. So I, I think it's definitely a topic that we gotta take seriously. And, you know, the right time to think about this stuff is when reporting concrete and doing the building, uh, because it truly does have to come down to an architectural decision to make these things as safe as possible.

And, and you bring up a good point, Dan, and that is, um, you know, it is actually the potential of costing lives becomes a part of this equation as well. And something that we, we do need to take seriously. I mean, is it time to update the fire coats?

You know, this is, again, is not a new problem that we've dealt with at in societal levels. It's the same way after Hurricane Andrew. They changed the building codes down here in South Florida, or in Florida in general.

Maybe we need to re-look at the, uh, fire regs. And, and Dan, to your point, you know, what, what do you need to get a c of o certificate of occupancy to get, you know, an approval here? What, what fire suppression systems do you have?

What architectural decisions do you have? You know, this, this seems, hey, maybe AI can help us with this, right? Reasonable to revisit it.

I'm certainly no fire code expert, but, you know, my concern is it does feel like, you know, actually at a a federal level and even at a state level, there's a lot of deregulation and kind of squirting around some of the, you know, processes and procedures we have around this stuff. Um, you know, really, 'cause I think, you know, the knock on America is we can't build fast enough, you know, whether it's fast, it's data centers, Well, it'll take what, what, That's the way that we're actually deregulating and making it easier to do this stuff versus, you know, versus potentially harder by, you know, really kind of clamping down on, you know, rules and policies. What was the fire?

Were the women burned in the Garin district? Uh, in Chicago? I, I, the Linen it was, think it was the linen factory in New York, right?

No, but there, there's a name, I don't remember the name, but it, it took one, the Triangle shirt factory. The triangle shirt factory, correct, Mike. It takes one of those and then people will, you know what Dan, they'll say, okay, maybe we shouldn't, we shouldn't cut those corners.

You know, maybe we should take that stuff seriously. Unfortunately, it may, it may take a tragedy like that. So a lot of the guys I grew up with are firemen, and they are frequently remind me, they say, you know, Mike, when your house is on fire, we're not coming to save your house.

We're coming to save your neighbor's house. 'cause your house is already toast. The data center's pretty much the same thing.

I mean, they're just gonna come there and try to contain it, but I don't think they're there to save it. I, I think if you're relying on the firemen, it's too late. I think you, you've gotta, you've gotta design for fire, if you will.

Right? So last, last week, last Wednesday, I was on the, uh, at, at sector, the, the, uh, black Hat Canada event. Uh, shout out Ja, Jamie Arland was moderating the failed panel, and I got to be o the old person on it, right?

You know, with two younger folks. And Jamie had brought props for us. I got to, to hold the 19 89, 9 and a half inch floppy that had the industrial control system, Dan from the Orfield Water, uh, water system, uh, back in 1989.

And the folks next to me had a CD ro and a five and a quarter, three and a half. And we talked about, uh, the, are are we getting better? The classic, I think it been 19 years they've been running this fail panel, right?

So it's literally long enough itself to, to be an example of, of what we're talking about. And, and I, I guess the point that I was trying to make there is the same one I can generally make here, you know? And because we're moving along in a path, we're at this point, this is not new.

You know, everything from, you know, I think everybody here, you know, said parts of this in, in this segment. Um, we've been down this path before, you know, we're having a lot of things catch on fire. What do we know about fires?

Back in 89 with that disc guy was around, you know, I worked a, in, in, uh, South Carolina at a, a data general var, and we actually had the raised floor and the hay lawn system, and yeah, we kind of forgot about that and, you know, but, but it's not that we need to reinvent the wheel, like it's so many other things. We need to now, we can both do what we've already done before, put that back in place and connect things, uh, appropriately and fast enough to, to solve the, the current issue. And, and maybe as we cycle forward, you know, raise our qualities and have different levels of failure in the future, which is the whole goal.

Yeah. To fail more fun, right? But just not the same way over and over again.

I always wanna be introduced to small modular nuclear reactors to power these. Like, we've also talked a lot about that. Uh, but it's something Why, what could go wrong there?

Things Always go Wrong. But I, but, but here's, here's the, the, I I don't wanna use the word irony, but it's ironic. It's not a question of could we be designed them safer?

Of course we could design them safer. I think the question is what Dan said, which is, do we have the appetite to design them safer if it means delaying putting them online? Well, and that's the whole, we don't weigh everything together, right?

You know, and fail failure is, is a wonderful thing, right? You know, like if you're not failing enough, then maybe it's really stable, that's fine. Uh, but it's certainly not a growth area.

And this is, you know, in data integrity of, of IAM, there's so many different areas. I think we've been driving towards this. How do we get to perfect and we need to understand, stop trying that don't, there's no such thing.

You know, there's, to your question, Alan, it's a balance. If the benefits are X and the cost is y of data centers burn down. Maybe let the data centers burn, but know you've made the choice and put it together.

Sounds like a song burn, maybe bird. Yeah, that's what I was thinking. I was like, okay, somebody who paid for that data center's gone.

Don't. Yeah, yeah. You know, that data center, tens of billions of dollars.

Well, anyway, hey, you know what? This is gonna be, I, I think an issue we're gonna see, unfortunately, uh, you know, until something bad happens and, and you know, it's what my mom used to say, funny till someone loses an eye or something, right? Really?

And, and that that's what you got. With that, let's take a break though on this one. We're gonna come back and let, let's turn over to managed insecurity.

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Contact us today and tell your story to the world in the most powerful way with Textron Group. Hey folks, we're back. And we're talking about, well, the number of instances involving security breaches that get traced back to some sort of third party provider of an IT service or security itself seems to keep climbing and folks are getting a little bit worried about that.

But there's a converse to this argument. Some folks would say that the providers of those services know more about security than the folks who run the internal ITE systems. So you're better off relying more on those folks.

But Alan, I know you put a post together over on digital CXO talking about this in terms of the risk and how we should be thinking about this. But where do you fall in this debate? 'cause it kind of sounds like you're saying don't rely on the third party.

So look, Kate, Chris, I'm sure you guys are gonna have a lot of thoughts on this one as well. And, and remember, this wasn't on Security Boulevard. This is a digital CXO.

'cause it's, it's a leadership discussion. Of course, you're gonna rely on a third party security's too damn hard, right? For, for, except for a handful of companies.

Maybe the Fortune 50, maybe not even all of the Fortune 50. Security is too hard to do by yourself. Almost by definition, you're gonna have third party providers helping you.

We live in a cloud world where we have, by definition, seated some of our, uh, capability for security to the cloud providers 'cause they control the stack. But the real point of my article is whether you are outsourcing, Taylor, I'm hearing a echo. The real point in my article is whether you are outsourcing your security or giving, sharing it with a cloud provider or some third party MSSP or, or an AC provider who you give access to your network, as in the case, I think it was a target, right?

That led to the target breach. You can outsource the work. You can't outsource the responsibility when the stuff hits the fan and your customers are impacted.

They don't want to hear, it was one of our partners, they don't want to hear it was a third party. It's not our fault. The the buck stops on your desk.

And so you gotta remember that whenever you bring in a third party who is in any way remotely responsible for your security posture, for your compliance, I'm not saying don't do it, but you've gotta be thoughtful and, and kind of follow best practices and make you making sure those third parties have, are doing what you think they should be doing and what you feel is reasonable and managing that risk. Because when the, when the music stops and you don't have a chair, you are the one in trouble. You can outsource operations, but not accountability.

And if you think about, um, you know, hey, we lived in Florida for 20 years. I'm sure you know Chris and, and Alan, you remember, um, the, the deep, um, the water oil, the deep water oil issue, and it was, you know, bp, but, you know, who were they blaming? They were blaming Halliburton and, uh, Transocean and it, but at the end of the day, it came back to bp.

So we see that over and over again, right? That, you know, you gotta, it's gonna go to the brand at the end of the day. And we see that.

Absolutely. I, I'm gonna, I am going to, uh, bring the, uh, late grade admiral gr amazing Grace Hopper into this, you know, because she was a real admiral. And, and for those of you who don't know the name, read a book, but, uh, she, uh, in the Smithsonian, there's a log book with a beetle taped into it, you know, that was caught in a, in a relay in a computer.

And she said, found bug. So if you talk about bugs, you know, amazing grace. And she's famous for having all sorts of great, uh, sayings.

And what I've always loved as a sailor myself is sail. You know, a a ship port is safe, but that's not what ships are for. Sail out to sea and do new things.

And to be clear, she's not just, that's, that's an analogy. She's an admiral. And as I was billing the, the, the Twains, my two silly solar power boats and sailing 'em up, uh, from the keys to St.

Augustine, remember we explaining this to some of the, uh, uh, uh, the Coast Guard folks in the water. You know, to be clear, my lifeboat is another boat, and both lifeboats have lifeboats, right? So, you know, you know, you, you guys may have to come get me someday, but to be clear, I'll just be standing here.

I'm not gonna be swept out to sea. And the nice thing about that sort of thing is what, what, what, uh, Grace Hopper was meaning is that take responsibility and, you know, there's nothing else after that. There's not taking responsibility.

Just take responsibility and then whatever happens you're responsible for. So yeah. Whether you're literally sailing out to sea or whether you're, you know, building an oil rate deep horizon, right?

Uh, Kate and or running a data center or anything else, it's your responsibility. So you can outsource your cybersecurity. You know, Alan, your intro is exactly right.

It's all very complicated stuff. You shouldn't be doing it unless you are a security company. But if that is your one link, if you decide to have one fragile link, you know, again, have a lifeboat, have a second boat, have a second life vote, it depends.

But you've decided to have one brittle link, and that's your, your choice. So Chris, I I hear redundancy in five nines. Yeah.

Redundancy to your redundancy. Well, when it's life critical, right? You know, I literally Go back up.

I love it, you know? Right? You know, at worst case, on those boats, I'll be, I'll be in there in the ocean with an anchor, you know, floating, but the storm passes and I'm still there, right?

So yeah, you gotta think this all the way through where it's your fault, period. I wanna think a little different an approach here. I, I think what we're ultimately saying is you can't outsource the business impact, right?

Ultimately, something goes wrong, it's your business that will impact everything in between is just the blame game, right? And, you know, whether you have security totally inside, how many CEOs have survived an incident by throwing their CISO under the bus, right? That's a short shelf fly job if you ever seen it, right?

So, you know, you're running the business as a CEO. Ultimately, something goes wrong. It is your business gonna be impacted?

The rest is just the blame gate. Do you wanna, do you wanna have a third party outside? Who can blame?

All right. You know, BP probably got off, uh, a little bit easier because Halliburton took some of that blame for them, right? Kate, you know, to go back to your analogy, um, but, you know, end of the day it's your business at the end of the day that's gonna be impacted.

And, you know, whether you, you you decide to do it yourself or you outsource it, you know, that's really much more a matter of cost, risk mitigation and skillset. The term outsourcing is getting more nuanced though, because what a lot of the folks are doing these days is they're calling them co-managed services, and it's a, a better blend of an external service provider and an internal team. So everybody's kind of got skin in the game, but it's not like I'm dumping all of it onto one provider and hoping for the best.

I think that's gonna be the better approach, and frankly, it's taken a long time to get there. Much to my amazement. No, that's a good point, Mike.

And, you know, co-managed, um, models with shared telemetry and clear SLAs, um, are the future. So it, it has taken though way too long. Yeah, go ahead.

That's part of a good resiliency strategy. Yeah. You know what, when, when CrowdStrike had the incident, which is just about a year ago now, I believe, right?

Um, the blue screen of death and Delta went down. I didn't see all those delta passengers in the airport saying, God darn CrowdStrike. No, they didn't.

They blamed Delta. Delta Tried as much as they could to do Everything they did. They sued him.

I, I don't know what happened with that lawsuit, but they did Sue CrowdStrike, but people were p****d at Delta. That's that, it's your business. And when you outsource you, Kate, you said it, I think in the beginning, you could outsource what not res uh, capability, but outsource Operations, but not accountability.

Not accountability. That's, that's the bottom line here. And, and if you're a digital leader out there, I'm not saying do all your security in-house, you probably be more danger to yourself doing that.

But you've gotta recognize that you still are accountable to your customer. It's still your business. And, and the ironic, wonderful thing about it is once you do that, it turns out you get more business.

Right? You know, and, and this, I'm sure I, I'm old, I repeat my stories all the time, so forgive me, but, right. You know, in vvc, early VC life, for me, giving a pitch, um, after the, the, the Cisco firewall thing, uh, one of the inve investors present, leaning forward and saying that, that, you know, billion dollar, uh, uh, firewall thing, how'd you do that?

And I just honestly said, well, we built, built a team that died for each other. We took responsibility with the market and built trust. And this, this individual leaned forward and said, no, you can tell me.

And it key. So the key to what we did, literally, I think, uh, Danny said it, uh, somebody said it a minute ago, we had this horrible thing happen that was totally our fault. So instead of saying, oh my God, you know, we immediately went out and said, we're gonna go, I'm Chris Blas.

I'm responsible. It's our fault. It's as bad as it looks.

It's in fact worse, and we're going to do everything we can to fix it. And here's our plan, and we did it. And that actually works.

You people trust you. They give you more money, they give you more trust, as opposed to saying, you know, the whole blame game thing, we all look at like the, the looks on our face when we bring that up. It's like every human being goes, oh my God, it's a blame game.

But if you could actually develop trust, that's business. That's money, that's efficiency. But you have to actually mean it.

Oddly enough, you know, your, your grandmother told you these things, right? Remember back to when you were a kid? It's true.

You know, I think George Kurtz, so I know George a very long time, probably 25 years. Um, George Kurtz is the CEO founder of CrowdStrike. George did, that's exactly what George did.

He went before Congress, he went before the cameras, he went before everyone, black hat. He got on the stage of black hat and said, yeah, we, we screwed up. We messed up.

And here's what we're doing to make sure that don't happen again. And, and I think that is better than playing the blame game. You're, you're right, Chris.

That's how you build trust. That's how you build a business. To, to be fair, Microsoft had a hand in this, but they blame CrowdStrike too, so, well, I'm not gonna throw dirt on them, but yes.

But Microsoft's been blaming everyone for this, for their security issues for a long, long time, unfortunately. But, but they had their moment too, right? There was the time where Bill Gates stood up and said, security's gonna be important.

We're doing trustworthy computing. They hired the best security people in the world. And there was that period of time from maybe 2005 to 2010 or 12, where Microsoft was stellar, stellar security.

And now, And, and now the president of Microsoft shows up in front of Congress once a year and does a Meia Kapa, and that's that. Send Hail Marys me, and like, make a donation at the box on the way out. You know, that's, that's security today.

But anyway, it is, it's important for leaders out there. It's something as security people I know we, we deal with all the time because we know, we, we don't, you know, look, if you are using a cloud, you're, you're, you, you're outsourcing security to a certain extent. Absolutely.

There's no way around it. So anyway, gang, what a terrific, terrific discussion today. Of course, we had our double dose of ai, a little security thrown in.

Doesn't get better than that. Uh, as usual, we have a full Textron TV show following our Textron gang here today. If you're watching it during our stream, if not, whether you're watching it on O TT or Textron tv, or text on tv, YouTube channel, thank you for watching.

We have a lot more content out there. Go check some of it out. Mike.

Good luck to you in, uh, Barcelona. And then of course you'll be at Amsterdam. You'll be, I, I'm sure, recording videos and filing stories like mad, uh, Chris, Kate, great seeing you.

We'll see you on a gang soon. Danno, I'll be talking to you, I guess, in a little bit, hopefully, but keep doing what you're doing. Enjoy your day, everyone.

Stay tuned for Text Drunk tv. This is Alan Shemel. We're out.