Stablecoins, AI Security & Amazon Q: How Tech Is Reshaping Finance and Cloud Defense | TSG Ep. 864

Hey everyone. Stablecoin the latest crypto craze here on Textron Gang. Happy Friday, man.

Do I love saying Happy Friday. Uh, happy Friday everyone. Welcome to our Friday edition of Textron Gang.

Uh, I'm Alan Shimmel of Textron. We've got a great lineup. We're gonna talk about crypto and AI anxiety and maybe a, a report from the field that reinforce.

But, um, let me introduce you to our gang members who are gonna be talking to us today. We'll start, I guess, out west. And we're going to go northwest here to my friend Fred Wilmont of tech team.

Hey Fred, how are you? Great, brother. How you doing?

It's good. It's good to see you, my friend. Can.

Did I tell you it's been a pleasure having you. I, on this show, we haven't talked enough in too long and it's great to see you as often now, so Me too. Thank you.

Me too. A hundred percent. Staying out west.

We have our Silicon Valley dynamic duo of, uh, John Schwartz and Lisa Martin. We are gonna go with Lisa first. Hi, Lisa.

It's great to see you. I've, I haven't seen you on here in maybe a week or two, so it's so fantastic. I know.

It's great to see you too, Alan. I actually went to Spain to Malaga last week for Futurum to speak on a panel on modern marketing, so that's why I was out last week. It was, and, and to your point about coming home from Italy, it's always hard to leave Europe.

It's such a fantastic place, Especially this time of year. Absolutely. But it we're gr glad to have you back, John.

You haven't really, uh, gone anywhere exotic, huh? I used to live in London for a while. Um, and uh, that was a long time ago though.

My daughter started going. Oh, I was f*****g recently. I mean, other than maybe going to a Giants game.

Oh, you don't, oh, you don't think Las Vegas is, is, uh, yeah. Um, that's next week. It's exotic.

Yeah, I'm excited that Saturday I'm gonna go see the Giants in endeavors to see where, where they're going. Um, that should be interesting how that plays out. But yet next week at Las Vegas and HPE can't wait.

Oh, Okay. So you headed to the, the, the, the, uh, city over there. Okay.

And then, uh, moving on from the West Coast. We'll stop, we'll take a quick stop high in the Rocky Mountains. He, he's not high head.

It's pretty early in the morning. Mitch Ashley Rum Analyst. Hey Mitch.

It is Colorado. Don't count that out, but good To be here. Good to be here.

It's good to have you on. I know you've been traveling a bit. And then finally still waiting for his Yankees to win a game, though.

They did score a run at two last night and then blow it on some airs. Mike Ard, I did go to an exotic place this week with Mitch. So, you know, Philadelphia gotta tell you from a New York perspective, it's exotic.

It was Tropical, rainy, you know, Adrian. Alright. Um, yeah, they Did play some rocky music.

So guys, let's jump into it. Mike. You know, Congress is, uh, taking up some legislation maybe on crypto, and of course our president is a big fan of it 'cause he's lining his pockets with it.

Um, but now it looks like the big retailers are saying, Hey, maybe there's something here. What, what's this story about? Yeah, I think this is gonna happen and now has some bipartisan support in Congress.

So it looks like the Genius act is gonna pass. And some retailers like Walmart and folks and Amazon are trying to figure out, well, can I create a stable coin that is pegged to some sort of more stable currency? And that might help them with their, um, fees for transactions and all kinds of things that they might wind up doing with that.

'cause you probably use it for international trade, but Lisa, what's going on here? Is every company in the world gonna have a stable coin? It's so interesting.

This was a really fun one to dig into guys, because Mike, you mentioned the Genius Act that would create basically this legal framework for stable coin use in the us And with that said, skeptic, there's obviously, there's always pros and cons and there's skeptics of stable coins. When, uh, is there potential security risks here? Is there regulatory uncertainty?

But basically a stable coin is a type of cryptocurrency that is aligned or pegged to a government issued currency. Either the dollar could be gold. There's some interesting use cases here that I think Walmart, Amazon, and other retailers are exploring payments, uh, as well as trading investing.

You mentioned international. My cross-border payments, um, even access to like financial services are supposed to be the stablecoin less volatile than tokens, like the traditional Bitcoin, Ethereum. And what we're seeing is retailers like Amazon, big ones, obviously Walmart, really strongly considering stablecoin as a way to reduce their dependence on credit card networks like Visa, MasterCard, there's so many billions in in interchange fees on prepaid and debit cards.

I think the most recent number was 32 billion in the year 2021, which is the most recent data. So it's looking like what retailers are wanting to do is, is really stable coins as part of a broader shift away from the costly and those legacy system. So it's an interesting time, but of course the security, um, factor is high there.

Especially as we look at the high volumes of card transactions and the cash that the Walmarts and the Amazons handle. Will this allow them to save billions of dollars in fees and really provide that security that the consumers are gonna demand You? You know, it's interesting.

I I've been involved in the, uh, payment card industry for a number of years. Um, I have a lot of friends who have been in that industry. And then, you know, when the whole PCI thing came out, I was doing some, you know, PCI work around it, so I'm very familiar.

Look, every merchant hates the fees. And what you don't realize, it's a great business. 'cause not only do they charge fees of the merchant, but they charge on the consumer's end too, right?

Your bank pays, so you got a credit card from Chase or Citi or Wells, they pay a fee on that end of it. So the, the credit card and payment processes make money on both sides of the street. It's a crazy business.

I'm almost amazed that the payment card industry lobby is letting this thing have any oxygen at all. Right? Because, you know, between Amex and Visa and MasterCard Discover, which is now part of Capital One was diners, um, you know, there's, those are some pretty big honchos that you're trying to cut out of the trial here.

And my bet is sooner or later they're too smart to be cut out of this trial. Sooner or later they'll find a boy back into the thow and to feed. That's What I'm thinking, Alan is what is, what is the credit card company's angle to get in on this, right?

They're not gonna let it swing by and suddenly all their, they're losing their feet. That's not gonna happen. It's gonna be a vicious fight for that's those dollars.

Would they issue their own stable coin? I mean, what the hell? Amex can have its own stable coin.

Well, you know, they're, they're Expedia and airlines are looking into stable coin. I think even with the, the banks are considered considering joining a merchant led consortium. Um, so yeah, they're all gonna look for an angle.

I mean, and with Amazon's interest in participation, I wonder what Apple and eventually Google and others do. So what is stable coin pegged to that makes it stable gold? You can, you can pick a currency, you can pick a US currency or any other currency for that matter, I think.

And so basically it, its value isn't tied just to the belief system in that like a, you know what you see a digital Current speculative like his Bitcoin and stuff. Let me ask you another, That's got treasury backing, right? Is that right?

Uh, yes. Yes. It's, uh, backed by cash reserves or short term US treasuries.

So it makes it less fault. So then it would be backed by the, that's Basically close, it's a close equivalent to cash and it's designed to maintain a fixed value essentially. That's the, that's the theory.

So It's not the speculative investment kind of thing. You we're not gonna have stable coin mining, are we? I don't know, but can we have Walmart money?

I mean, am I gonna get like, you know, instead of dollars I'm gonna get Walmart greenbacks. Is that how this is gonna, So I I get Walmart money, you know, so if you are a Amex platinum holder, you get like a free Walmart plus membership, which is like their version of Prime and, and you get, you get like a certain amount of Walmart dollars you could spend with it. Not a lot, don't get me wrong, you know, but take stuff and Walmart's cheap.

Um, So I'm throw one thing out here, Alan. You, you know, there's some kind of a arbitrage train, you know, this is like a long distance carrier. How many minutes did you use of your service versus that service in, in balancing that, you know, there's some kind of a arbitrage or, or or bridging network that the credit cards are gonna be because not everything's gonna shift to stablecoin.

They're gonna support stablecoin on their platform, on their cards. There'll be fees involved for, you know, translating between stablecoin and whatever your credit card balance or, you know, cash. There's money in there to be made.

I think for the credit card companies, There's, there's two things here that I think are important to think as positives though. One, if you look at, you know, the credit card, uh, challenge your banking challenge for things like mass compromise and knowing where and when your card was compromised and what effects that has, account takeovers, uh, point of sale and point of compromise activities, all of that becomes a much, uh, faster analysis problem. All of that becomes something that is owned by whomever owns the stable coin.

So you really democratize a lot of that. Small businesses that want to get in the game of doing transaction, don't have to pay Visa member bank, you know, costs just to take transactions, right? So, you know, there's a lot of, well, there's probably still gonna be a ton of fees, right?

Which fees are you willing to pay? Which ones mitigate your risk? There's a lot of value to having something in between what my mom wants to invest in, in crypto and something stable you could actually operate.

I think there's a, there's a big plus here to be had possibly for consumers. And Walmart's gonna save a bunch of money in fees and give Alan more money And who's gonna back up the, when you're, when something, you know, end vendor merchant doesn't deliver and you want to go back and say, don't pay that, right? Like you do with the credit card or with PayPal.

So there's a lot of things to be worked out. I think if they have that, then I think there'll be more adoption by the consumers. At least They have said that the transactions are supposed to be much faster.

And obviously everyone demands speed these days. So potentially could clear instantly, which would be an advantage for the consumer, could be an advantage for companies that have really big global supply chains or or large amount of transactions. So that speed could be a factor, a good factor, Right.

Fred, do you think we'll see stable coin jacking the way we see crypto jacking and we'll see all these kind of fake Walmart stable coins out there that somebody hacked together by, you know, hacking into a cloud service somewhere and using some illicit CPUs and GPUs to create some fake money? Oh, for sure. Uh, but I think that, uh, that problem is infinitely more trackable than the problem we have today.

So, you know, uh, being able to find out where people are doing which particular things, which banks and which branches are, you know, handling the crypto behind it, there's a lot more traceability here than there is in, you know, just plain cash. So there's a lot of value I think in being able to do that. And like everything, there will be a whole suite of new interesting, uh, phenomenon for different ways to defraud.

But, um, you know, I think that's early days in any anything is gonna be that, like, like Al mentioned, the payment industry right, has had a lot of that. A 6% gain on mass compromise is billions of dollars when, you know, an organization can start to deflate that. So you can see a bunch of that, but I think the, the interesting part will be how rapid that's going to change versus what we have today.

So it's maybe more like fight club taking on some real proportions here. I don't know about Equifax and the rest of the players there, but it'll be interesting to see what happens. Let me, let me introduce some geopolitics into this.

I was waiting for that. No, no. I'm not going where you may think.

No, no, I was, I was gonna bring it up too, but Well, You bring yours up. So my, my thought though is it's something, Mike, you said, well, you could just plug anything in the backend as the, you know, as the, as what we're gonna base it on. Is this a way for the world to get off the dollar?

Do we lose, you know, because many economists, many, you know, financial people will tell you that the United States' biggest asset today is that we're in a dollar based e economic world. And if, if, if coins like this become the defacto standard and the back end of what they're pegged two is, is frankly portable, do, do we lose our advantage there? And is that a, is that really something that we should call a genius act?

Maybe. I think, you know, you're gonna see a lot of countries anchor these things to the yuan, right? To the what?

To the Chinese dollar To the one, or, or, or, yeah, maybe. Right? So I think, you know, so I think they're all gonna break that.

Do you think someday, you know, somebody's gonna like get a ransomware demand for, you know, 1 million Walmart stable coins Points? Yes. That's inevitable.

Yeah. That's a distinct possibility. Yeah.

Lifetime. Just what you need. Just what you need.

John, where were you going with this? Oh, I was gonna go down on a different path. This is much better.

I I won't, I was just wondering when we're gonna see, uh, the Trump organization announce their stable coin. Well, They have their coin. They could just say it's a stable coin.

'cause he's a stable genius. Mm-hmm. Right.

It will be, it will be tied to the valuation of Mar-a-Lago though, right? Priceless. Priceless.

Yeah. Yeah. Um, spoken.

Let's, let's, let's not go down that bridge of the river. Um, look, you know, it, a lot of people have predicted something like this, a long time are coming, right? And, um, and the other thing is, you know, who knows?

Is Congress really going to, yes, there's some bipartisan support for it, but by the time the lobbyists get done picking at the carcass here, is it gonna be what we think it's going to be? That that would be my biggest take on it, right? Or will it be a shell?

Mm-hmm. And anything else? All right.

If not, let's take a break here on Textron Gang, we're gonna come back and talk about AI anxiety. That's not the new movie by Mel Brooks or anything. You're watching Textron Gang.

All right, folks, we're back in. Yes, there's a lot of AI anxiety suddenly in the world. Microsoft is now reportedly gonna fire a bunch of salespeople and replace them with ai.

Uh, the CEO of Amazon put out a memo saying that the company will definitely be smaller in the age of ai. And every time you turn around lately, John, somebody's laying somebody off and blaming it on ai. ai, where it seems like we're evenly split as to whether or not we're afraid of AI or we think AI might be a good thing.

So, Right? Yeah, there was a national poll that NBC News put out Wednesday, and they were, they were asking a bunch of questions, but two of the questions that stuck out that were tech related were AI related questions. And what they found was this profound split in the way Americans look at ai.

Either they are embracing it or they are not touching it at all. And I think what is in play, and I think what's been in play, not just with this poll, but just in general, is this familiarity. So people are much more familiar with this new technology than they have been with previous waves.

And I think it breeds, uh, equal amounts of fear and fascination. Um, like, like the companies, these, these people work for, they have strong feelings and attitudes about ai, and the more they find out about it, the more anxious they become. And I, and I, it'll be interesting to see how this plays out.

I mean, we see this at the corporate level now, we're seeing it, um, at the rank and file level. And, um, I I, what I think is eventually gonna happen is people are gonna learn to live with it. They're gonna learn it's not as scary as they think it is.

Um, like previous waves of technology, there's always this fear of change, especially among older people like me. But once somebody is exposed to it, then they become huge proponents of it. So I think maybe that's how it plays out.

But the other thing that's going on is that we've got the, we've got a lot of attention, as Mike points out to tech companies that are looking to be more pro productive and looking for more productivity. So they're gonna get rid of their employees. We're seeing it among media companies like Business Insider.

Even the New York Times is, is using AI much more thoroughly than than than we previously knew. According to the Washington Post. Uh, we're, we're moving in that direction.

And again, change foment fear. And I think it's just gonna accelerate like everything has with ai. Um, there, there was a book that just came out called Empire of ai.

It's basically about Sam Altman and Open ai. It's written by, uh, former Wall Street Journal reporter who now works, I believe, at the Atlantic. She's a, it's a really interesting read.

It got a lot of attention. And basically, I'll just throw, this is something I wanna throw out to y'all. Her, the author's point is that these AI companies, the dominant ones are, are going to be the new empires, and they're gonna be very similar to old empires.

They're gonna chew up a lot of resources. They're gonna affect profoundly the working force, and they're gonna profoundly change our societal norms across so many gamuts, good and bad. So again, this is an understandable reaction to something that is going to, if not rule, our lives have a huge influence in our lives in everything we do.

Lisa, I think there's something wrong in the tone of these things, in these announcements. And part of the thing about AI was it will make people more efficient and we'll be freed up to go do more things that have interesting value. And that's all goodness on the face of it.

And yet it seems like, you know, every time you turn around now, somebody's talking about laying people off because of the eyes. So what are they, you know, it doesn't seem like they're actually doing the uplift part as much as they're just focusing on reducing costs and bottom line, pushing this through the bottom line, rather than thinking about a top line. Yeah, I agree with you, Mike, on that.

When Andy Jassy came out the other day, CEO of Amazon, and said that there will be less jobs in the age of ai, I thought, you know, the message that came out just a few months ago from the World Economic Forum, uh, state of jobs report for 2025, talked about the, and I'm, and I'm not gonna remember the actual million numbers and millions, but I, I think the net loss plus net gain of jobs in the next five years was projected to be 78 million new jobs created. And that narrative isn't getting out there. Um, I think Amazon could have done it could have, from your your point on tone, Mike, I think they could have done a better job of that.

I'm, I've always been glass half full when it comes to ai. I get to see a lot of the positives that it does, but also when I do iHeartRadio, I get to talk to the consumer audience. There's a lot of fear out there.

So this poll did not surprise me at all. For example, it's, it, it varies by industry. I've got family members that are in the entertainment industry and they're trying to break into Hollywood and they're terrified of ai.

Obviously there were huge issues and strikes and things in the last couple of years because of that. But I think the messaging needs to be clear on let's identify where the cons are in the negatives and what types of jobs are already being replaced versus what the opportunities are that it's going to give to job seekers regardless of industry. I think that message is just not clear.

And to jaunt, to your point, and to the polls point, people are either all in on AI or completely against it. There doesn't seem to be a middle ground yet. I don't know if we're gonna get there anytime soon, but, um, it's, I I, but then I talk to people in different age groups, like my mom's best friend who's almost 80, who is a huge fan of chat, GPT uses it for inspiration on different things that she does in her life.

And I thought that was a really cool, uh, example of somebody that in a different generation that could be scared of it, retired. So not worried about it taking over jobs, but she's some value in what it can deliver for her life. You know, the, the word you use Lisa that really stood out to me in this perfect word is messaging.

The messaging's been so bad from the tech industry. It, and it's, it's, it's, uh, as, as Mike mentioned, it's Amazon, it's Microsoft, it's, I think meta has made it clear that people are gonna be replaced by ai. I mean, it's just, it just, throughout the industry there's this almost gleeful, um, anticipation of, of what AI can do in place of human beings.

And I don't think that is the intent, but that is the, the takeaway that we're getting from a lot of these companies. Even, I mean, anthropic of, of course they're going to, they're gonna build up the fear as they try to raise money. But Dario, it's the CEO there has talked famously about losing half the white collar jobs because of AI related technology within five years.

So they gotta do a better job. And, and you know, as long, as long as we keep hearing Nvidia and Salesforce and ServiceNow and everyone else talking about these digital workforces as if humans are just a small part of the equation, we're gonna just keep getting this reaction. I think the other part of it too is that it's, it's in a, an environment of constant opinionating about sort of the dystopian part of ai.

And I don't mean, you know, in, in a true sci-fi sense, but just every job's going away, all these knowledge workers are going away, or the entry levels are going away, whatever statements are made. And, and it's, it's by not by one person, it's by, you know, a lot of, a lot of people including leaders, company leaders as well. And I think what, what the, what the problem with those statements is, well, some of that may be true.

Um, it doesn't help just to say, Hey, all this kind of jobs are going away, you know, paralegals are going away, so what should people do? What, what do people do to prepare them? So that's the other part of the conversation we have to have is, okay, so you know what, we may not have paralegals as we know it, or pick your, pick your job.

Maybe we'll still have plumbers, right? But we, we may not have paralegals. So what, what does the legal profession look like and how do you prepare yourself to evolve and grow and shift and maybe make some substantial change if your, your kind of role does change or is eliminated, but new things come about, You know, that that's, so one of the frustrating things I encounter when I talk to these companies, uh, especially the tech companies about AI and its impact on jobs, they will say to me invariably, well, it's gonna create new types of industries.

It's not gonna just eliminate type X job, but it will bring in type Y. And I'll say, well, give me an example. Give me a specific example in the vertical market, say the legal profession and how that might play out.

And I get nothing but vague responses. Um, 'cause, and I, and I sense in, in fairness to the, the people who are not answering, maybe they, either they don't know or they think it will evolve organically within the job or within the industries. Certainly.

I mean, I, I believe John, there'll be jobs in companies. We can't imagine. I mean, there will be things created that, that are now, now possible that are, will be created out of the opportunity.

But other things will be, I dunno if wanna say evolutionary, it's kind of evolutionary and revolutionary at the same time. In, in my world, I think about the software development environment and, you know, developers moving from coders to more orchestrators and communicators and using tools that more look like something like a StarCraft resource management, you know, game than, than it is a line of code editor. And same thing for developers or maybe, uh, workflow engineers, whatever it might be.

But I think that's what you have to kind of paint for people as this, this is the skills that are transforming when you have those AI capabilities. So first of all, invest in ai, your own skills of using ai, because you probably won't make the Transition without having some of those to begin with. And if we could, oh, sorry.

If we go back to the messaging for a second, what's ironic to me is that I get to talk to CMOs regularly and see, we're talking CMOs of CrowdStrike, Dynatrace, snowflake in ine finite, T Trellis, you name it. All of them leaning heavily into Gen AI and agentic ai. They're seeing a lot of value.

They're already seeing ROI. So the fact that the messaging is inconsistent is just ironic to me that the CEOs like an Andy Jassy would phrase what he said in the way that he said it just Wednesday of this week on the Today Show, they were talking about ai, and I was actually, so I, I tuned in, I was very in curious as to what they were going to say about it. Were they going to be negative?

Were they going to be neutral or positive? And it ended up being fairly neutral, I would say, which I thought was, was a good thing in terms of identifying there are going to be jobs that will be replaced, but there's also gonna be a lot of opportunities and jobs that we can't even imagine yet. And that that message, that tonality is just not out there consistently.

And I, and I struggle with that. 'cause I, I see it, My b******t meter's off the chart on all this. And, and here's where it is.

All these companies hired immense numbers of people over the years. And so part of this, I think is them saying, well, we're gonna shrink the workforce juice the stock and we're gonna attribute it to ai. But I don't think that they're anywhere nearly as far along with AI as they think.

And maybe they're in anticipating some capabilities. That's a hundred, that's a hundred percent correct, Mike. I was gonna say the same thing yet.

So here's where we are today. Today, AI is not necessarily replacing jobs. AI is augmenting people, right?

It's not replacing them. That's not to say it won't replace them at some point in the future, and maybe sooner than we think. But for Microsoft who's already done one round of layoffs based on AI and is announcing or expecting to do another pretty big round, uh, based on AI now saying that AI's replacing those people, that's covering up for some drunken hiring spree during COVID, Right?

Yes. They're all bloated and over they over the overhired. Yep.

Yes. And they're still cutting that. Yep.

Now secondly though, you know, we, we did a story earlier this week where New York State is now tracking how many jobs are lost to ai. And California is gonna take another crack at regulating ai. And you know, everyone is gonna try to put this genie back in the bottle and, and try to figure, you know, how to control it.

That train's left the station, right? It's outta the box. AI is going to do it.

Ai I said this, remember when it first came out, the hundred scientists who said it's a threat to humanity and, and all of these things, the trains left the station. This thing's on is already on its path. You could, you know, as Lee I Koka says, lead follow or get out of the way.

And, and so I think, Mitchell, your advice is dead on. Go, go, go skill up, upskill yourself on AI because you know what, when I went to school, they didn't have any web designers just saying, and, uh, I don't think we're gonna have web designers necessarily going forward. I think AI will design your web.

But, but for a brief moment in time, it was a hot little job. But let's, but let's look down the road a little bit. And if New York State wakes up one morning and finds that the unemployment rate is off the charts beca and they're having to pay all these folks benefits, they're gonna come back to the tech companies and say, what did you do here?

And how much are you gonna kick in to help fund this? Well, keep in mind those numbers are self-reported by how many jobs are laid off. So are you gonna be over or under?

I'm reporting that as a company. So, so imagine imagine that there's a, take this a little, little, a little bit differently. And so imagine that there is a 70, 80 year olds, 90 year olds, don't have a lot of contact with their family, don't have a lot of reasons to get up in the morning, don't have a lot of ways to communicate fairly isolated from the world.

Imagine there's 19 year olds who are stuck in college right now, highest suicide rate in the United States, 19 year olds. And imagine that there's organizations that produce the ability for adoption of things that we don't fully understand yet, your personal confidant, your personal collaborator, that is a, an ai uh, interaction that lives on a device in your home with you, right? The commercial adoption of this isn't, you know, what's going to lead the adoption of the, of the industry.

Those people have already proven that, that you're welcome to save about 45 to 50% of fee of people that have had this experience from committing suicide. And so some of the things to think about here are, hey, look, uh, the adoption isn't the fear of ai. It's the fear of humanity.

It's the fear of establishing a new, you know, leadership and, and control over society that no one has a input into. But when you look at some of the abilities and the things that are brought to light here, it's not, it, aside from not being doom and gloom, there's an example of a trade craft here that hasn't been built yet. So your personal, you don't need a psychiatrist with, you know, 20 years of such and such.

You have the ability to have somebody that knows you in the context of all your conversations to interact with you almost like a friend. That's a job that doesn't exist today. And those are the types of opportunities that are available.

But, you know, to Lisa's point and shimmy you too, these aren't clearly illustrated yet 'cause they don't exist yet. And I'm not sure we spent enough time thinking about, about that translation of the turn down in the economy, people doing, uh, something about playing offs for AI and what these new opportunities might be. Yep.

I mean, look what Chris Blas is doing with his Lumina partner as he calls her. I don't know if her's the right word, the red pron now. But anyway, uh, it's pretty cool stuff and I think we're gonna see more of that.

We'll see more of it anyway, certainly a lot going on and I'm sure we're gonna discuss this again. But for now, let's take a quick break here on the gang and we're gonna come back and AWS's big sec cyber show security show, reinforce not reinvent. Um, was this week, Mitch, I think you were on the scene.

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Let's revolutionize your tech journey. Contact us today and tell your story to the world in the most powerful way with Textron Group. Hey folks, we're back and Mitch and I were both in Philadelphia at the AWS Reinforced Conference and there's been some criticism level that AWS and all the cloud service providers for may hiding a little bit too much behind shared responsibility, but it looks like to me at least that AWS stepped up its game considerably and it's making it easier to both see where the vulnerabilities are, what, how critical they are, and in some cases proactively going out to prevent them.

So Mitch, you were there with me. What was your take on what was going on here? Well, I think you, you coined the term, right?

I think in one of your articles was it was a bevy of announcements. And, and of course AWS has, has never been known for underwhelming us with a number of announcements. There's always a lot of them.

Uh, probably the biggest one, frankly was, uh, Amy Herzog who came out as the new CISO for AWS. Um, she has been with a WSI think about a maybe couple of years and comes out of Mitre and VMware and some other experiences. Um, Chris bets, the former CISO left so somewhat unexpectedly on his terms, he's going to start something new, but we don't know what that is yet.

And Amy had three weeks to prepare to give the keynote to give a two and a half hour keynote. It was pretty remarkable. She did a fantastic job and I think will be a great CSO four.

There were a lot of announcements and, and some of them, like you said, Mike, there were kind of filling in the gaps, but more shoring up, pulling information together. They announced, um, a revamped AWS security hub about identifying vulnerabilities. They did A-A-A-W-A-W-S Shield service, which is more of a dashboard around configuration mistakes and things that are happening with, uh, they can identify with Amazon queue.

Um, there's a, a network firewall, uh, to be able to, you'll appreciate this, Alan, to do more automatic responses to traffic. Sounds like an I-D-S-I-P-S argument again, having PTSD on that one. Um, so there are a number of things around, around kind of network security, cloud security, configuration security.

There was an announcement with CrowdStrike, with Falcon being able to kind of integrate better with that, uh, service offered by Falcon and AWS or more endpoint security. Um, you know, Fernando Mon, uh, Montenegro, the, uh, lead of, uh, security for future. Uh, it did a nice analysis of, it kind of called it sort of undifferentiated heavy lifting.

Um, meaning there's, there's other areas where the cloud provider AWS can step in and help customers instead of them having to assemble all the tools into the monitoring management. I think where this is all going is more automation, not just at the firewall level, but across the board. The area that that I was also particularly interested in, um, were things around their, uh, security incident, uh, response process.

But also inspector is getting more into the, uh, scanning a code when it's pulled, as well as when you, when you push updates to the repository, uh, software composition analysis, it's, it's getting to into other people's business as well. But they're also doing things like integrating with GitHub and GitLab and the DevOps space. So it isn't a total go at it alone.

So there's some some key partnering things that I think were announced there. Anyway, I, I could take 20 minutes and rattle off all the announcements that I don't think they're all worthy of that level of conversation, but I think those are the kinds of trends and things that I saw. Um, mi Mike, what were your, what were your thoughts?

Did I miss some key things? Yeah, there were two things that kind of leapt out at me. One is they did a really awesome demo of Amazon queue developer being used to find vulnerabilities and then create the patch and test the patch and putting that in front of developers.

So it was kind of like the ultimate shift left de demo for DevSecOps using AI tools. And the second thing is, they talked about how they are now, um, have a team that's investigating DDoS attacks and that goes and finds the networks where the SPS are coming through, and then actually calls those people and says, Hey, you know, your system has been compromised. And if they don't respond, then they go down the next level and they go after their DNS.

And if they get, don't get that, then they go down to the local telecom company and say, Hey, you know, you gotta cut these guys off. And so they were kind of suggesting that was gonna become a bigger model for them and they were gonna apply this to other things besides DDoS and it's felt like, you know, finally somebody was getting aggressive about this stuff. So those are the two things that leaped out at me.

You know, Fred, I got a question for you. As the CEO of a cyber company, you, you hear about what Amazon is doing to do a better job with cloud security. Do you consider that friend or foe?

Is that competition? Is that someone you work with? Can they do a better job?

I mean, typically Amazon rolls out things that are 80 20, they're 80% of what a private solution is at 20% of the price. And for some people that's enough. How, how do you view you listening to this report, Fred?

I think it's great. I don't fear, uh, anything that Amazon is doing. I would say it's long overdue and, you know, as you said, right, it's, it's typically rollout a capability and, you know, sort of craft your own, you know, way of utilizing it.

The challenge is, and a lot of this stuff sort of rolls up into the cloud security posture management problem space, which, you know, Amazon's getting eaten alive by their direct competitors for this. Similarly to the development lifecycle with, you know, a GitHub that's already doing the vast majority of this. It's a little bit of, you know, I've gotta meet the market where the market is.

And, uh, I like a lot of the ideas that make it easier to, you know, build infrastructure to validate your code is secure, to deploy code successfully and to operate your security controls as a practitioner. So, you know, when you, when you provide services to any of your customers and having the nice, you know, signed paper that says you're SOC two compliant, terrific shared responsibility, no, there's none of that. So this opportunity allows people that build software, build services for customers to not only do a better job with what they already have, but it empowers folks that don't have a team to do those things to make it more successful for them.

So I, I think it's terrific. I think it's long overdue, uh, how valuable it becomes over time, I think is what the market's gonna dictate. But I'm thrilled to see it.

It's, it's, it's about sound Friend. There was also another angle that I'd love to get your opinion on. 'cause while AWS makes its network and security services open enough to people to tweak themselves if they're so inclined, um, they were just suggesting that that was a pointless exercise.

'cause people can't respond fast enough to the attacks that are coming out there, and they might as well just lean on AWS to automate that whole thing end to end for them. And there's not a lot of point because humans can't update the firewalls fast enough, can't detect the attacks fast enough, and the whole thing needs to be automated in real time. So it was time to move on from network and security operations constructs.

That sounds awesome. Uh, heavy eye roll. Uh, e everybody says that no one does.

The problem that we have isn't, uh, the, the, the largest problem that we have isn't whether or not, you know, there is dynamic, uh, asymmetric attacking happening all day long. It does. That's what happens on the cloud infrastructure in a public cloud provider.

But you know, the challenge is that once a thing is compromised, you have 49 minutes for that to be broken out of and to expand laterally and do other things. If we said that, that really is just something that the cloud provider should handle. And we know that 60% of the vulnerabilities on the kev, the, you know, the exposures and vulnerabilities as for for known exploited vulnerabilities are cybersecurity vendors.

What makes a cloud provider any different? So I, I don't buy into that at all. Uh, but I do believe that having more tools available to make better decisions is, is super important.

I'd love to see some of the things we talk about around Kubernetes and, and, you know, container security and things that help influence that. They have services that don't offer that today. So if you use EKS for example, please like, help me go back to the, you know, to the base images that you provide and make sure that those things are secure from the ground up.

So, you know, let's, let's, let's mine the kitchen before we start talking about the front of the house, Sorry, guard duty. Now it supports EKS, but that's about the only thing they said about EKS. Exactly.

You know, there, there was one interesting use case, and this wasn't necessarily talked about as an announcement, um, but as I was going around and talking to different AWS people meeting with some folks, um, something that I wasn't really that familiar with, you know, it was probably rolls right off the tongue with for Fred, but, um, this idea of it, it's called domain, uh, domain generation algorithm. So in other words, it's automation, automated generation of domain names that they do on a very short interval, and that's what they used to attack from the new domains. And then over time, you know, the, the cloud providers, others can start to identify that those are actually being used for nefarious per purposes and cutting those off.

But then the bad guys are using more generative AI to create more familiar types of, uh, generated names. So it's not less obvious that those are generated through algorithms. But I, I was talking to some folks about this is a good place where you bring together automation, you bring together machine learning because you have so much data in very short intervals that you can start to identify these more and then implement that into like their DNS firewall into guard duty and, and tools like that.

So you can kind of see the combination of technologies, maybe it's a little bit of sausage making, but I found that interesting, like, okay, that that's a real use case where ai, in this case, machine learning is using, helping, being used to combat kind of gen AI generated attacks. Uh, the one thing I did continue to feel is there's too many damn skews I can't keep track of all the products and all the things that these things do. And I'm kind of like, can we just make This simpler or be better?

That was a common question in our meetings. Like, so is that a new KU or is that part of an existing One? AI will solve that, don't worry.

We're gonna, we're gonna, we're gonna start tracking SKU reduction caused by ai. Yeah, I think, I think Vermont's signing up for that one. Um, anyway, guys, good way to end our Friday.

Have a great weekend. My gang members, thank you so much for coming on. Thank you for watching us.

We as usual have a full text drunk TV schedule behind us. We'll be back Monday with a fresh gang show. But until then, on behalf of John, Lisa, Fred, Mitch, Mike, and myself, have a great weekend everyone.

We're outta here.