Techstrong Gang – February 11, 2025

Hey, everyone. Does this SolarWind story ever go away? Another twist and turn here on Textron Gang.

Hi everyone. Happy Tuesday. It's Alan.

Jake Shimel here for Text Drug Gang. Welcome. You know, you may be asking why is he wearing sunglasses in a hat?

Well, I'm here to tell you about our next big virtual event coming up. It's called Cloud Native one four slash that Out from the road, we're gonna talk about why cloud native, just no matter where you are on the infrastructure map, what, what you're doing in terms of shift left or shift right? Cloud native is there.

It's our latest virtual event. And, uh, it's one front for the road. So stay tuned.

It's gonna have a little bit of a Blues Brothers thing. We might see Jake and Elwood do do something around that, but I'm gonna take that off now so I can see what the heck I'm doing. Welcome to Tuesday here on Textron Gang.

We've got a lot to go over with you as well as some great folks to go over it with you. Let me introduce you to our gang today. First of all, joining us from Key West, 90 miles from Cuba, or thereabout, uh, on his boat.

He's our secure, one of our resident security experts, the Redoubtable, Chris Black Blak. Hey, Chris, welcome. Good to see you, Alan.

Good to see you folks. Yeah, I apologize for the US Navy Air Force flying jets over us during the call, but go USA. All right, excellent.

All right, moving on from Chris. We're gonna move to Hudson, Ohio. They didn't make a car over there, did they?

Stephen? No, no. Uh, we made an abolitionist here.

Um, no, no kidding. Yeah, he, uh, uh, John Brown, the Famous John the, oh, the, he was made here in Hudson. Really not even a statue.

Is there a statue? Fun acts, right? Yeah.

No, look, you gotta go with, sometimes you, you play the hand you dealt. But in addition to John Brown Hudson's also the home of the one and only Stephen FoST, founder, CEO, president of Tech Field Day, gestalt it and Techstrong gang member. Stephen, welcome.

It's great to have you here. Great to be here. Uh, and, and I'll, um, for your Blues Brothers reference, I'll have some dry white toast, please.

Okay. I knew you would be the one to get that stuff you had, you know, it's of an h Anyway, thanks, Steven. Moving on from Steven, we're gonna go up to Harrison, New York for our Chief Content Officer, who also happens to be a bit of a Blues Brothers aficionado.

Uh, Mike Ard. Hey, Mike, welcome today. All right, something gets in your way.

Turn right? Yep. Excellent.

And then rounding out our, again, certainly not least, but I'm introducing her last 'cause she's sitting right here on my left. It is our sustainability and all things Green Echo Insights, analyst, editor, roving Eye in the Sky. Bonnie Schneider.

Hi, Bonnie. Welcome. Hi, Alan.

Great to be here. Thank you for that introduction. Thank you.

All right. So we've got, uh, we got a great day here, Mike. We got some and, and great stuff to talk about in addition to Cloud Native.

Now, one for the road, well, one from the road. Um, what do we got? Kick us off.

Well let, Well, let's get started. 4 billion by a investment firm called Turn River. 4 billion is kind of chump change these days.

But, um, as it relates to ITSM, that's a fairly sizable number. And they're saying that they're gonna eventually take this company public again. And, you know, I always see these deals lately, and there seems to be a lot of 'em over the last two or three years.

And I scratch my head, and I'd love to get your opinion about this, Alan, but these investment firms come in, they say they're gonna take these companies private, but I almost never see them come back outta being private. It's like they're in this private equity state forever, and they never seem to actually go about public again. So I'm kind of like, well, what is the point of all of this?

And then maybe Steven can weigh in on how it impacts it folks. Well, you know, look, whenever I hear these deals and these kinds, this kind of news, you know, I'm always reminded of Gordon Gecko and, you know, breaking these things up for the constituent parts. And is the, the parts more valuable than the whole, um, and what is the real end game here?

And, and when you talk to the PEs generally, yes, this is always, you know, this is, let's call this, uh, announcement one. We're taking it from public where, because we don't think the market's actually valuing it correctly. We're gonna make it private.

It's a cash cow. And then usually the, and, and then they always say, in this stage of the game, we may take it public again down the road. They don't promise to they, they talk about it.

But usually the plan is something like, Hey, we could take this sucker private, we could cut a lot of fat out. We're gonna cut 10 to 15% right off the bat, a fat outta this thing. Get it lean, mean fighting machine.

And, uh, and maybe we'll do some acquisitions and tuck some other businesses in there that are creative. And then at some point, you know, we, we milk what we can out of it, but then we could, you know, depending on market conditions, go public again, we, and, uh, with a rosier outlook with a more, you know, uh, better evaluation and make some money out of this. 'cause at the end of the day, this is all about the money.

But you know, what they say with PE deals, you gotta break some eggs to make omelets. And a certain amount of these deals just go south. And these things wind up being sold to another, you know, PE firm lowered down the food chain for, uh, scavengers.

It happens. I, I hope that doesn't happen with SolarWinds. You know, in spite of what most people think of as SolarWind, you know, when they hear SolarWinds, they, they think of, unfortunately, the, the, uh, security incident.

4 billion valuation they're paying here. And, and I hope PE does them right though, you know, there's no guarantee when it comes to pe. Steven, Steven, What's your take on this?

Because I always get the sense that there is interest to be paid, and that adds to the cost of the business operating. And so what is the impact that that has from an IT perspective that I should be thinking about here? Will the company continue to invest?

Have you seen that historically? Or do they wind up, you know, to Alan's point, always trying to trim the fat to make the margins? Well, it does seem like, uh, it does seem like this is some sort of a game on the, in the finance and PE world, uh, where they're acquired by a, uh, a PE company, uh, loaded up with some debt and then floated again on the public market.

But that's being cynical. Uh, let's, uh, you know, you asked about the impact on the IT market. Let's focus on that.

Uh, SolarWinds actually has a great presence in the enterprise IT market. In fact, I should point out that SolarWinds is a very frequent tech field day presenter, or was, um, in the previous regime, we had them present at, uh, over a dozen tech field day events. We learned a lot about their products.

And frankly, they have a really good market. In fact, it's been very difficult for other companies to, uh, get to compete with them because they are so, uh, successful in the, uh, you know, network management, uh, observability market. That's really what they've refocused on under the current, uh, CEO.

And frankly, that's what the company has, uh, really kind of come out of this whole supply chain, uh, fiasco with, uh, you know, a decent reputation in that space. I feel like, uh, as the CEO mentioned in the article reference here, that, um, maybe going private is a way for them to rebuild without that constant quarterly scrutiny from Wall Street. I get that.

I don't know if the price that's gonna be paid in terms of, uh, the debt that's gonna be taken on in order to take them public is gonna be worth it. But I think it's worth noting as well that, uh, as of what I just looked at here, their stock price is right back where it was when they went public in 2018. So essentially, the company went up some, and then down some, and then with this announcement, they were right back where they were.

And, um, you know, that's not a bad story. It's not like they were circling the drain or something here. So I, I think there is a good chance that they'll be taken private, that they'll refocus on their core assets.

Maybe there will be some acquisitions made and they'll go public again. And frankly, I don't think it, people should be spending too much time worrying about the, uh, finance and PE antics that are related to all that. Yeah.

And, and you guys cover the, to your point, uh, Steven, you know, the, the finance side of it is what it is. I think it's interesting that it is a story, right? You know, there's, this company started in 1998, you know, and right at that time, I'd taken over the Cisco firewall products and we killed off, I, behind the scenes, killed off all the, the security management efforts because it was a wasted time.

Nobody's doing it at all. So right at that time, like these little solar, solar, wind, soof, a couple others, others, you know, we made them partners to, so we could say we had, uh, security management, but that was 27 years ago. We're now at the point where, you know, and, and you know, I can't help talk about supply chain.

We all know about SolarWinds because of the supply chain incident in 2020. Now we're talking about 'EM because of significant acquisition in IT security management. These things are very closely related.

You know, it has taken 27 years, you know, to get where we are with ITSM right now. 'cause it's, it's exponentially more complicated than building firewalls and installing them. And SolarWinds, you know, Tim Brown, CEO there, smart guy, you know, I think he's done a, a, a good job of steering, uh, company through, through all that.

Um, it's, we'll keep talking about these sort of companies because this is the area, this level of complexity is necessary to run the systems we have, whether it security management operations, or the supply chain issue that they're so famous for as well. I dunno, I have some experience with these types of deals. And, uh, frankly, there was times where companies I worked for, we spent most of our time trying to service the debt that was created by the activity.

So we didn't really turn a whole lot of profit after that because the debt and the interest rates were such as they are. But Alan, you know, the article suggests that we're gonna see more of these types of deals. And, um, you know, just from a Wall Street perspective, are people exiting the public markets more, are more companies gonna go public?

What's going on in that space over there? I'm not going to take the bait on this one, Mike, But look, we we're entering, we're probably entering a, let's call it a relaxed regulatory, uh, phase. Much like the go go eighties, right?

Where you can, you know, find a, a dog with fleas in the word of Gordon Gecko, load it up with debt, take your money out, you know, hoist it back onto the public market, or find someone else, or, you know, break it up to its constituent parts or what have you. And, and look for the next, you know, carcass to, to go after. And I'm not saying that's gonna happen in this one.

I'm not saying anything bad about the PE involved in this one, but I, I think you are, you're going to see, you know, this is this, this miracle baby, right? This is what you want. You voted for it.

So I'm positive theory. And my theory is that part of this is also a way to address some technical challenges that are related to not having that quarterly number. It seems to me SolarWinds may need to reinvest into the core platform to turn the whole thing into more of an AI driven platform and architecture.

And that's gonna cost a lot of money. And I'm not gonna make my quarterly numbers doing that. And I'm positing, maybe Steven, correct me if I'm wrong, I think there's a lot of companies in that position who are gonna find themselves not able to withstand that quarterly kind of scrutiny.

And we're gonna see a lot more of this stuff driven by the fact that I need to redesign the business, rebuild the product in the age of ai. Yeah, it really is too, too bad that Wall Street is so quarterly focused. I mean, I think the, the biggest, uh, representative of this story is Dell.

Uh, remember that, you know, Dell needed to get its, uh, its house in order and, and did and is a much, much stronger company for it. I think that that's the, the case with many IT companies. I think a lot of IT companies and a lot of the, uh, both nerds and executives that I talk to say that they wish we didn't have this aggressive focus on quarterly numbers, quarterly numbers, uh, you know, and I, I think that sometimes it's even, it's even more than that.

I mean, if you talk to the people inside, it's not quarterly. It's, it's monthly, it's weekly. It's what have you sold today?

If we're focused on what have you sold today, this month, this quarter, you will never, ever get ahead technically. And you can see it happen with these companies that become so obsessed with their stock price instead of with developing good comp, good products for CU customers. That's why, you know, on the one hand I do say, oh no, you know, the PE companies, they're gonna come in, they're gonna load it up with debt, they're gonna steal the money, they're gonna, you know, screw up the company.

On the other hand, I say, you know, maybe this is a good thing. Maybe the company will be able to focus on what it should be focusing on, which is good products. And, um, and focusing on customer needs.

I mean, frankly, I know that the, the whole VC world needs public, uh, offerings. Wouldn't it be nice if there was a company out there that just focused on creating good products and making money and not on going public and making all the money in the universe? I, I don't know.

Uh, I'm a dreamer. I don't know, Alan, that didn't sound like an argument for greed is good, so, Well, no, he's not from that crowd, obviously. He's a dreamer, right?

I mean, come on by his own admission. It's all sounds very kumbaya to me, Steven. But at, at the end of the day, it's not about good product, it's about profitability.

And it's not necessarily about top line. It's about bottom line. You know, greed is good.

Greed is what a main America. Great. I don't know, man.

Both you and I have run companies that were not public and were profitable for a long, long time. Yeah, It, it, they're still owners. It still has to be a well run company.

It just doesn't necessarily have to be responsive to, um, investors and analysts who work for securities firms that have a vested interest in reports. And, you know, they all say that they're completely separate, but none of us believe it. So Let me give you another movie analogy.

Another eighties movie. Yeah. Another eighties movie.

So I might be a little later. So instead of Wall Street, let's turn to good fellas, right? You look like a gangster.

Yeah. No, no. Paul.

Paul, I want you to be my partner. What do I know about the restaurant business? Come on, be my partner.

And then now, and, and Henry, Henry is nar narrating. He says, now the guy didn't know what he got into with Pauley is his partner. The first thing is Pauley has him line sign up for every credit and everything he can, and they're running as quick as the merchandise comes in the front door.

It's running out the back door. And when the whole thing goes bad, boom. We just torch it and burn the place down.

Let's hope that we're, it's just the Wall Street version of it and not the good Fells version of it here, right? That they don't just load this thing up with their debt and then just torch it and burn the place down. 'cause it is a good company with good products, with a strong position in the market.

And I hope they don't screw it up. And I'm gonna leave it at that. Okay.

All right. Let's take a break here on Textron Gang. We're gonna come back and we're gonna talk about, it sounds like we're getting serious about fighting or at least attempting to fight on DeepFakes.

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Hey folks, we're back and we're returning the subject of DeepFakes. I don't think we've talked about this for a few months, but it, New Jersey is now taking the lien on a bill that has, uh, been approved by both houses of their legislature, at least. I don't know if the governor has signed it yet, where they're basically saying certain types of DeepFakes will be against the law and we mean it.

Um, here's my issue, Chris, and I'm trying to figure this one out. So where does that line between like a deepfake that is somebody's expression of freedom of speech and something that is malicious and kind of where do we draw that line? Because, you know, we've all seen Elon Musk and a lot of the social media channels are full of this deep fake crap now.

So what is the definition of malicious? Well, yeah, I love this whole topic, you know, and to, uh, Alan's Blues Brothers theme because it, it's got everything. It has country and western, right?

You know, this is the public key infrastructure argument from the beginning of time. How do we have the definitive cryptographic identification of source? And anybody, you know, that knows P-K-P-K-I and security, you know, it's one of my cartoon issues, you know, how did we fix it?

Yeah, we kind of didn't. And we fudged around and we did interesting things that kind of work kind of, but, but no, it's a bigger issue than that. And, and I like the way you framed the question.

'cause this one asks everything. How do I tell the difference between a deep fake that I make as a deep fake for artistic creation and so forth, and a deep fake that I make as a deep fake for the purpose of malicious intent? You know, hold my coffee, you know, we have to talk through everything.

I mean, on my general view, though, I haven't looked at the, the specific policy at this point. I expect that if, and God help me probably when I do all the same sort of feeling as I did about, you know, federal cybersecurity regulation in the nineties. You know, we'll express ourselves emotionally through legislation.

We'll try to act that out through the courts, realize what parts of that were a terrible idea and move the conversation forward. So I think, I think this, I mean, the next several years is mostly educating ourselves at every level from legislation to the average person on the street to where to even start before you can bring in a geek like me and say, okay, for that we can use X, y, z technology or process. Mm-hmm.

So, Mike, did you say Elon Musk was full of crap? I suggested that some of the content was a little on the spurious side, shall we say? Yeah, But not Elon himself, certainly, Of course not.

He, there's a gentleman and a scholar if I ever saw him. Mm-hmm. Anyway, couple of other thoughts on this since we does New Jersey do anything first on technology legislation?

Who paid who over here? This seems like a ese deal to me, as they say, up in New Jersey. Um, so I'm, I'm not sure where this is coming from, Right.

Well, I think that there are other states that are trying to do something similar. And to be honest, there was this whole defiance act that the US Senate passed when there was a deep bait involving Taylor Swift, and then they sent it over the house where it promptly has disappeared. In fact, I couldn't find any coverage of the Defiance Act in the last 60 days.

So, um, here's what I'm kind of thinking about. Maybe the states are gonna try to take the lead on this, which would be nice, but I'm also scratching my head because, you know, to Chris's point about it's an emotional expression, which might mean zero. And so Steven, is this a technology conversation really about how to defeat this stuff?

And, you know, all the legislation in the world won't matter until we get the tools. Well, right now, I think that it's actually fairly easy to detect deep fakes because they make mistakes and they don't look convincing. But I wouldn't count on that for long.

Uh, you know, I mean, it was the same with AI generated, uh, content. And that's gotten a lot, lot better. Uh, well, writing video still looks terrible, but, um, but, you know, hold your breath.

Maybe it'll happen soon. I think that it really comes down to the question of tool, not, not of tools and technology, uh, but of, of intent. And that's really what the law is all about.

You know, as, as Chris pointed out, you know, there's a big difference between creating a deep fake to skew an election or push crypto, uh, investments and, and creating a deep fake for other reasons. And, and I'd like to bring in the concept of parody, which thankfully is protected by the US Constitution specifically because in, uh, you know, the, the, the 18th century parody and satire were alive and well, and very much part of the, uh, discussion here in the US of, uh, creating this country. I think that parody and satire should be protected.

But has anyone who's been on Facebook knows there's, we also have a bit of, um, a gullibility problem here where, you know, something that was intended to be parody or satire can be taken seriously by people. This whole thing though, says to me that again, it really doesn't matter what the intent was, or it doesn't matter what the, what the effect was as much as what the intent was. We need to be focusing the law just like we always have on punishing people with bad intent in order to correct their behavior.

If someone is creating deep fakes for, uh, pornographic exploitation of minors, well then they're pretty much, you know, right out, you know, if they're creating DeepFakes to, uh, skew an election or to, uh, have, uh, some sort of effect on financial markets or to steal money from people, well, again, that's the important thing. It's not, it's not the deep fakes that's important. It's the intent of the perpetrator that's important.

And I see Chris nodding, so I think we might agree here. Right? You know, and, you know, Tylenol, remember the Tylenol, you know, we didn't have shrink grabber on the tops, the caps, but somebody wanted to short the market, make a lot of money, go to jail for it, right?

Which was already illegal at the time. Um, and they did it. And saving this space, and again, anyone that didn't see this coming from a million miles away is missing the point.

Right. You know, and 1990 General Electric, you know, we had a video conference center, we had a, a tape, you know, to test out this new system. And it was the world's leading animations at the time.

The, you know, when, uh, world champion win win some comic com, uh, competition, but was dinosaurs walking around with silver skin, but moving as you. And I remember sitting there looking at saying, at some point in the future will be able to make video that won't stand up in court. You know, and video won't be allowed anymore.

I hadn't even got into security professionally at that point, but it's still bloody obvious. This is where we're going. Like you say, Steven, it's gonna making mistakes now, 1, 2, 3, 4, 5 years, it won't.

What are we gonna do? Right? It's already illegal to do these things, though.

I, you know, as a security technology and policy person, I think, again, this comes back to, you know, in the last segment, you know, SolarWinds, you know, ITSM supply chain, these things have vulnerabilities to get exploited because it's too bloody hard to tell what's going on. And this is taking this issue to seven, not even to 11 to 7,000. It's forcing us to figure out how we have some visibility into, you know, and then I got thrown around a lot of, you know, industry where it's attribution, you know, who did what?

I know I could do all sorts of things online and nobody and get away with it. 'cause nobody can tell anything. That's why this is an issue.

Not because you can make a fake video, but because there's no way to tell anything from anything else. And that has to get fixed. Um, I just was gonna say about it, will, building onto what you said, and also what Steven said about intent, I think that that's gonna be, there's debate on, you know, was that the impetus of, of the attention of this?

Because we just had an election and there was a lot of concern. I know we talked about it on the Textron gang about DeepFakes and, and, um, at the time of elections. But at the same time, we're having that rise of cyber crime and the rise of really abhorrent crimes where people are getting calls that, uh, with a deepfake voice of a relative, that's you robocall.

Yeah. They're the robocall. You're being, they've been kidnapped or they're, they've been arrested, they need money right away.

So that escalation as well, where I think that some of the DeepFakes, um, going along with intent could be an add-on or an enhancement to exist when they, when they're added to a crime like sexual exploitation or, um, in the case of what I was saying, a crime where they're pretending to be someone else to get money. That's just something for, for lawmakers to explore. But it could be something that's an enhancement as well.

You know, I was reading about that whole kidnapping and, and then I was reminded, um, you know, back when they invented the Telegraph, one of the scams they ran was to send people a telegram saying that they had kidnapped their relative in Chicago and they were in Boston and nobody knew. So they paid Well technology at its time. But, you know, here's the point.

Obviously if something is illegal, it's illegal and we should do something about it and we should have laws on the books. I think the point though here is something Steven made and then Chris reinforced, which is, I don't think it's that far off. I think it's a lot closer than you think that these DeepFakes get really, really good.

And it's gonna be very, very, very hard to, to distinguish a deep fake from legit. And, and so, you know, I wanna call out in our notes here, uh, the good folks at the University of Florida go Gators, right? Have, uh, have, uh, started a study that could lead to better deep fla deepfake detection.

Uh, because that is, that's gonna be where the battle is. That's going to be the front here on the war. It's going to have to be detecting the deep fakes.

Then you can go prosecute who did them, assuming you can find who did them. But, and it's not just, you know, Bonnie, what you spoke about is sort of one-to-one deep fakery, if you will. Right?

It, it's the deep fakes in our social media. It's the deep fakes, right? That, that have wider societal impact that we, we've gotta work.

So shout out to, to the Gators. I I will mention Proving intent is gonna be really hard though, because, you know, these relationships between these people are not easily discernible. And I'll just stand in front of the court and say, you know, that parody of Jerome Powell that I created, I have no idea that that was tied to this dump and pump and dump scheme for cyber currencies.

And meanwhile, I probably have an offshore account somewhere, but you don't know. And that is very common already in social media where people will create, um, obviously misleading stories. And they'll, and they'll, and then they'll, at the bottom, it'll be like, you know, this is satire, this is parody.

But the, but the action, uh, you know, the result was the same. The result was the same as an outright lie. And, you know, I'm honestly pretty sick of people calling things satire that really are not satire.

Now I am a fan of satire, I'm a fan of parody of, of, of the onion and, and so on. But if, if you're creating a website that is just fake, you know, fake news, political lies, and in the bottom you say, this is satire in order to promote this, this worldview, it's, it's really, and, and that brings us to another aspect of this story too, which is frankly, you know, I was pretty dismissive of the technology before, but one of the differences here is that the technology has gotten so good that this has become easier to do, quicker to do and more widespread. And so you can kind of flood the zone with badness in very, very quickly in a way that you really couldn't, I mean, we've had deep, well, not deep fakes, but we've had like fakes of, um, you know, pornography and, and, and people's voices and so on for a long time.

But the fact that somebody can do this with little technical expertise, little artistic talent and, and just quickly, you know, bang this stuff out that does cause problems for the slow moving legal and court system. But, but Steven, go ahead, Chris. Yeah, yeah.

Two, two things. I think, Alan, you, you inadvertently coined the, the phrase deep flake, which we can un unfold later. Um, but yeah, but, but also I think that, uh, everything, everything everybody's saying is true.

However, at the same time, I I, you said it, uh, a string of words, a that really struck me. I can't get 'em back in my head exactly, but it may be very, very hard to prove that something is fake. It is not nearly as hard to prove something that is, that prove is something is real.

If I'm making something and I want to, you know, not, I wanna not get it swiped up in the deepfake thing. There are lots of ways for me to be really, really clear that this is real. And I think that's a nutrient gradient in the evolutionary landscape.

And I, I've been arguing this from a lot of directions for a long time. I mean, supply chain is another one of this is just, I, like I say like a caricature of it, but when it becomes economically and otherwise, uh, beneficial to just be clear, I'm making this artifact. It's me that made it, that's my artifact.

And if somebody wants to make a deep fake of it, it won't have that. And that's, that's relatively easy to do compared to trying to prove that something that with no, so, So you're talking like watermarks and stuff, you know, whatever the technology of the day is at Attestation. Yeah.

Whatever. Yeah. Right.

So if it doesn't have that, it can be assuming people would then look for that. But, you know, to Steven's point, most people don't. Most people don't.

And so you could write on the bottom, there's a parody just to cover you, you know, CYA and most people don't even get that far and they suck it up. Or you could say, well, we're really a news and entertainment organization, not just news. So when you sue me, I can't be responsible for libel because it's part of the entertainment looking at you, Fox News.

So I'm glad you said it. That was wonder. I I, I Wouldn't have known otherwise, you Know?

I know. Well, no, there's some people a little slow on the uptake up there, out there, so I just wanna make sure we're aware. But, um, and that, that is, that's, it's a problem in this world, right?

And one more problem is that we've already seen politicians with real video and real audio saying, well, that was a deep fake. I never said that. Yes.

Yeah. And that's another problem. Well, That, and that again, do we need to demand that all real stuff be watermarked or some, some, somehow, somehow authenticated?

Well, but this is, again, this is where the economics come back, back into play. You know, much to the point of the, you know, conversation in the last segment. I, I think it, you know, because these issues are so problematic.

Problematic means expensive. They take time, they take effort, they slow me down on doing other things. When there becomes a way to not have to do that anymore, and I'm competing with somebody else, economically, biologically, whatever, and I don't do that, and they do, they become more efficient, they become more profitable, they become more competitive.

So we always have a choice in security. Do we force people to do the right things? Do we regulate it?

Do we mandate it? Or are we sometimes in a, in a place where if you don't do it, you'll just be more expensive and less profitable and you'll go outta business? Absolutely.

And I think this is push the, all these issues are pushing down that path. I hope so. It'll just be more expensive not to deal with it.

Well, necessity's the mother of invention, I'll come up with something. Hey, let's take a break here. We're gonna come back.

Bonnie has a, a, a new video out, a report on energizing Stargate that we want to, uh, talk about. You're watching Textron Gang, Discover Textron Group, the epicenter of tech innovation. We are your go-to for reaching IT, leaders and practitioners worldwide.

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Well, we've been talking a lot about AI and energy use lately on the gang. There's one big 500, uh, billion venture that's been in the news with OpenAI, Oracle, and SoftBank. So I decided to take a closer look at this with talking to the CEO of energy exemplar David Wilson, to see his take on it.

What do you think, Stargate, the implications of it are for the future, for data centers and for energy? Is it a signal of, of this rapid growth that we're seeing, uh, going forward? What, where do you see all of this?

Yes. Um, well, um, you know, so it's like literally is a fascinating day to today. As we, we look at the, the competing models come out and the, the active debate about how efficient can new, um, AI models be.

And so really the deep syns come out and said it, it uses only 5% of the compute resources that, um, some of the other models like open AI and that have used to date. If that's true, that's actually, that translates directly to energy consumption. So you'd only hit 5% of the energy that was anticipated.

We'll wait and see where that shapes out. But regardless, there's a huge, um, future for ai. I think it's one of the, if you look at the transformative things in human history, industrial revolution, the internet, and, um, AI is certainly in that, um, in that, uh, that bucket.

And so the demand will continue to grow. It's just a little hard to put a, um, an exact number on, um, how much energy will come into the future. But even if you took out, you know, um, uh, the, the bulk of what's forecast, it's still a massive number.

So we're gonna see a huge amount of new bill, um, generation, an huge amount of transmission, um, uh, upgrades to move the energy, uh, uh, around. So it's a, it's a fascinating time. It really is.

And, uh, Dave Wilson, CEO of e Energy exemplar, it's really a pleasure to have you on and kind of walk us through this exciting time, as you mentioned with AI and the news data centers, and of course, the Stargate Project. Thank you so much for your insights today. Thank you, Bonnie.

It's been a pleasure. Well, one other note that wasn't in the interview was that, uh, David Wilson was saying that with just in general, with all the data center attention and expansion, that his, uh, business has been busier than ever, which I guess is not really surprising, but he seemed to be enthusiastic about the use, AI's use, um, in to mitigate energy use, um, with their technology. But of course, as we've talked about in previous Textron gangs, that that remains to be seen.

But, uh, it's an interesting topic that is a big topic of conversation in the sustainability world right now. It's interesting. Look, no matter how you slice and dice it, if we're gonna build all these data centers, we're going to need energy to, to run them.

And I don't think drill, baby drill is a, is a successful policy for at that scale. Right? However, I interesting to this point, last, uh, Friday, maybe it was Thursday or last, it was last week, late last week, you know, filed under the Red Scare Menace, uh, label.

Ima in the, uh, drawer, uh, satellite imagery has picked up that the Chinese are building a huge new plant that appears to be nuclear fusion. And they might be announcing a breakthrough in commercial nuclear fusion, combining that with deep seek breakthroughs and, and Alibabas and the rest. And oh my God, we're losing the space race to the Chinese.

Hmm. Um, so, or kidding, sorry, I'm not kidding about that. That was a report, And that might be a future very large hole in the ground someday too, right?

So could be, Could be. But you, or It could just freaking not work, Right? It might, it might.

I mean, that's the thing about technology. I mean, it's, it's, there's a, there's a, there's a long gap between we, we thought of this idea and we got it working in the lab, and then there's an even bigger gap between we got it working in the lab and it's a productive part of society and, and, and industry. But even so, So there are two sides to this conversation that always come up, right?

And we've talked about one of them before, which is the software will get better, right? With, that's one of the things about deep seek is that it is consuming infrastructure a little more efficiently. So maybe we don't need as much power on the other end of the spectrum, though.

There are reports out there, I think there's one in futurism or whatever I'm talking about, um, that the estimates for how much energy will be required by these AI models is woefully under what the actual consumption requirement's gonna be. And it's, they're, you know, the numbers are being projected by people who have a vested interest in saying it's not gonna be as high. Well, other folks are saying it's gonna be orders of magnitude higher.

So I don't know. Steven, where do you, what's your take here? Well, I think that the, uh, there's kind of a, a, a twofold thing going on here.

So Deep Seek showed us that we can optimize AI model dramatically and reduce their energy consumption, both in terms of training and inferencing dramatically. And that's really good. But as I've said on Textron Gang previously, we're only talking about LLMs at this point, and that really is Tinker Toys and g UIs when it comes to ai, what we're going to have and what, what is going to be built and what Jensen Wang talked about, and during his keynote at CES is a entirely different, you know, different level of ai order Of magnitude.

Yeah. An order. And, and maybe not, maybe more than, you know, like, uh, you know, Bonnie's guest said, uh, multiple orders of magnitude in terms of complexity.

Every optimization coming out of, uh, out of researchers, every optimization that was used by deep seek is, is very, very welcomed. But that doesn't mean that the energy projections are any less, uh, you know, that they're, that they're too high. And in fact, I agree with you.

I think that they're probably too low. And I do want to call attention to what he said in there about renewables, because again, as I've been saying, every time I get an op opportunity to, uh, renewables are going to be deployed in ever greater numbers, as he said. And this is a quote from him, simply because the economics are so compelling.

You know, if you can build, yeah, nuclear fu, you know, fission fusion coal, whatever, all of those things are not as economically compelling as solar and wind. And it doesn't matter if a politician doesn't like wind power, it doesn't matter if a politician doesn't wanna subsidize solar panels. If they are so much cheaper, then that's what's, that's what we're gonna do.

That's what we're gonna build. And it's the same thing when, you know, with battery technology, battery technology is an improving dramatically. And the worldwide adoption of electric cars has driven incredible advances in battery technology to the point where, again, as your guest talks about, we are going to have the ability to have renewable energy into batteries at the kind of scale needed to power AI data centers.

And no amount of knee jerk backward looking regressive thought is going to stop us outta mind. Gonna, renewables, I feel Like a, a reoccurring theme throughout the show. Yeah, Does have I said that before?

I feel like I have No, but I, but, but I'll give you a prediction on that, right? So here in Westchester County where Harrison is, um, they spent a long time trying to close down a nuclear reactor that was on the Hudson forever. In a day, I'll bet you that if Google, Microsoft or AWS showed up a month from now and said, Hey, everybody in Westchester County, we'll give you free electricity if you let us take over that nuclear power plant and we're gonna use it to run data centers, and you get a, here's your little side benefit, everybody's gonna say yes, regardless of any other implications.

They're gonna just be Like, I think you're underestimating the newbies. It's, well, and also you're underestimating the economics there, because again, even when we were hearing about Microsoft and Google and Amazon restarting nuclear power plants, the numbers, the actual dollar numbers they were talking about for the cost of electricity was more than twice the act, the cost of, on the free market, and more than four times the cost of solar energy. If you're gonna use nuclear, you gotta use next gen nuclear, these little mini Reactor, those don't exist.

You, I I fantasy They take a while, I, I find hope in inefficiency, right? You know, I worry about the gaps. You can die in the gaps, right?

And Steven, you said that at the beginning of the segment, you know, you know, but the entire, you know, we talk about the efficiency of the AI models, turns out the ones we knew a couple weeks ago were terribly inefficient and they could actually make themselves more energy efficient. The entire energy system, which I spent a lot of time in, you know, for many, many years, it's inefficient at every level, which is good, because as you have the needs and the drivers and the economic, you know, uh, uh, willpower, you can go after that efficiency. And there was so much room, because we're not going to use less energy on ai.

We are going to use exponentially more, more than you think we, you know, to, to the point. You know, if you want to be a, a environmental alarmist about it, and, you know, and write a book like, uh, the population bomb 1968, which it all burned in hell. 54 billion people, well wrong.

We can get more efficient. And the, the petro, you know, fuel chain is almost completely inefficient. There's almost no energy comes out of it.

You know, solar panels can give you 20, 22, 20 6% of the, the light hitting it. That's pretty amazing. But yeah, from the macro to the nano level, there's so much efficiency to be gained in the power systems.

And as we're learning in the AM models and so forth, that is both, you know, as much as you think, more, more power, but not necessarily as bad. Now, again, if we don't cross that gap correctly, we can multiple planets, let's not do that. Um, I just wanna also say next week, I have a report coming out where this is a big topic about AI and energy use.

Um, an ecotech report that I, from, I, I guess it was almost a hundred people that I interviewed, and AI and energy use and innovations in those areas, from smaller models to new sources of energy is all featured in the report. And I'm sure I'll be talking about that more as the weeks to come. Where can people go find that report, Bonnie?

Oh, Thanks. com is where I have the executive summary right now and a little briefing, and it will be, um, published in full on February 19th. Excellent.

Excellent. Guys, I think that's gonna wrap up our Textron gang for today. We've got a, a great Tuesday of, of, uh, Textron TV following this.

Just a quick shout out if you didn't check yesterday's or didn't catch yesterday's text on gang, our gang members did make their Super Bowl predictions from the Friday before. And I would go on there and, and say, Hey, who had it right and who had it wrong? Just say it.

Hey, there you go. I picked the Eagles over 40. Oh, you did?

Yeah. Wow. I don't, I I don't think that was really a shootout by any definition of the game though, so just No, but I did pick the Eagles to have over, to have 40 points.

I looked at that score and I saw it differently. What I saw was Eagles Sporty Referees 22. That's a whole letter.

It is. Well, look, congratulations to the Philadelphia Eagles and all of their rabid fans, and thank you very much. New York Giants for giving them Sequan Barkley, though they did keep Barkley relatively quiet.

It, it was, uh, it, it was their defense. Defense wins championships. We'll leave you at that though.

We'll be back tomorrow with a lot more great tech, strong gang. Um, Steven, do we have Tech Field Day at Cisco Live this week? We do.

Uh, we're gonna be live streaming from, uh, from Amsterdam with, uh, Sy Tech Field Day at Cisco Live, uh, at 1300, uh, European, uh, central European time, which is, I don't know, look it up in your local, uh, time zone only Eight or nine East Coast time. 'cause it's about six hours before us. Yeah.

So that's both, uh, to, uh, today, Tuesday, and Wednesday. And um, of course those things are gonna be recorded and will be available on YouTube as well, on the Tech Field Day page. Fantastic.

All right. Until next time then. Ms.

Allen Shovel. Thanks for watching. We're outta here.