Techstrong Gang – February 26, 2025

Hi everyone. So it seems Apple has a bad case of fomo. $500 billion worth you're watching.

Techstrong Gang. Hey everyone, it's Alan Shimel, seeing Alan Shimel. Different background.

I'm not in our studio today, unfortunately. We had some work being done here, so you're getting me in my desktop version here in my office. Uh, happy to have you with us though on this wonderful, uh, Wednesday.

We've got a great lineup for you. I mentioned Apple's, fomo. It's an expensive, one of the most expensive FOMO I've ever heard.

Uh, but we've got more than that to cover it. We've got some great people to cover it with. Let me introduce you to them real quick.

Um, first of all, it looks like he's back home, high top Silicon Valley, the one and only Jon Swartz. Hey, John, how are you? It's Good.

Good. Things are good. It was great seeing you all.

You my Mitch, Mike, Amanda last week in New York. Um, Good times. It was way too short, but yes.

Yeah, it was great seeing you. Yeah, great to see you. So, thank you.

And we, and we, you know, alluding to a editorial in-person team meeting we had in New York last week, uh, in case you were smelling anything burning, it was all those brain cells we were expanding on, on how what, what we're gonna be doing editorially for 2 20, 20 25. So, John, great to have you there. Speaking of having us there for our editorial meeting, she is our managing editors that that's the right new term, right?

Amanda? Um, senior Managing editor. Senior managing editor.

We don't have a junior managing editor. You are the only managing editor. But that all being said, wait, we, we, we actually do have an assistant managing editor.

Oh, okay. We have an assistant managing Anna. Um, but she's back home in Texas where I hear it's in the high eighties.

A little different than New York last week. Amanda Razani. Hey, Amanda, how are you?

Good. Yes. Big temperature shift from New York back to Texas.

All right, we'll stay in the warm weather for now though, and go over to our friend at sea, uh, security expert, Chris Blask. Hey Chris, how are you? Hey, Alan, I am good.

For those of you who following at home, this is Stock Island. We see out the window, the island next to Key West. And specifically what used to be the Five Sixes Taxi company actually had a little war for their own.

So all the pink cabs for those of you who've been in Key West, that was the five Sixes Taxi Company, which I think is finally gone. Good to see you. Good To be here.

There is no Uber down in the Keys, if I remember correctly. Oh, there is Uber. Absolutely.

I use it All the time now. There is, I think last time I thought there was no Uber there. Anyway, Chris, it's great to have you on board now.

We'll go back up to our cold weather friends first. We'll go to the guitar man up in Colorado. He's back home after a quick trip to New York Pit stop in the DC area and, and home to, uh, Colorado.

Mitch Ashley. Hey, Mitch. How are you?

Doing well, doing well. Yeah. I made a pit stop in DC as you mentioned.

Spent some time with some BMC folks, so it was great. Uh, great to, you know, both be in New York and get a chance to be with the editorial team for a little bit, and also go and visit some companies. Excellent.

Thanks Mitch. Welcome. And then last but not least, he, he looks pink.

It must be cold up there. Um, I'm from Harrison, New York, the Dean, Mike Vizard. It, it's quite the opposite, actually.

It's gonna be 50 degrees today. And since we live in a world where correlation is causation, you guys should stay the hell outta New York. Yeah.

As if you think 50 degrees is warm. Um, but anyway, Mike, great to have you on here. So I, I wanted to kick off today with, I, you know, I teased it in the opening.

Is this a case of Apple's fomo? Is it a case of wrapping themselves in the flag and getting in the good graces of, of the, uh, present administration? Or is it just good business?

Right? What do you think? I think this is a very extensive way to bend the knee, but, uh, John, I think you wanna like jump into this?

'cause I'm Sorry. Yeah, sure. I'll, I'll give, I'll, I'll give, I'll give some of the details and then I'll throw in my editorialized viewpoint because I, I, I think it's a combination of, of everything Alan said in what you just said, Mike.

Basically, apple is throwing a big bone to Trump in a sense. They announced on Monday, they're investing more than $500 billion in the US over the next four years with plans to hire 20,000 people, open a new manufacturing plan in Houston, open other, or expand on other facilities in California, Michigan, Iowa, what have you, Arizona. And they've also, in a sense, made this commitment to basically, Trump kind of teased it out.

He basically dropped, he ba basically blurted out that he met with Cook very stealthily, and that cook assured him that the company Apple was gonna shift to manufacturing from Mexico to the US to avoid paying tariffs. So that's a major motivation. The other motivation is that in, in terms of China, apple also ha is, is, is a, is at risk, right?

With these, these 10% tariffs in China where most of Apple's products are made. So in a sense, THIM Cook, who I think is actually very good at playing Trump in a sense, probably, I don't, I don't believe in a mo in a second that they're gonna devote this much money. They spend $10 billion a year on capital expenses.

Now, can you imagine them doing 125 billion a year for four years? I don't think it's gonna happen, but I think what they're gonna do, they're gonna do just enough to, to get exemptions from him in terms of tariffs. They're gonna keep the White House happy.

They'll do some of the things on the list, and then they'll move on. Because once again, think about history. Back in 2018, apple made a similar pledge during the first Trump administration.

They said they were gonna create 20,000 new jobs as part of a $350 billion US investment plan. And as part of that plan, they were not targeted in terms of tariffs in China. So, in a sense, apple is playing it very smart and politically, they're also trying to stay up to date and up to, up to par with the other big tech guys who are throwing hundreds of billions of dollars into AI development.

It's, it's, it's political, but it's, it's also business wise. But I think in a sense, cook is kind of the master when it comes to playing Trump. And I think the other tech leaders would, should, could learn from him.

So, lemme ask this though. I think, like you said, John, there, uh, the first thing I thought when I read this article was, um, they're kind of just following suit. They tend to be kind of the last, they stay back and they're the last, you know, so they're just doing, so now They, they usually draft other people and like, thinking of the car analogy, they draft other companies.

Mm-hmm. When they, when they move into a market, they wait until the market's established and they make their move. They may be late on ai.

That's debatable. But in a sense too, this is one of those things, you know, and also, is it just me or I sense a deja vu? We saw that $500 billion figure before with Stargates.

We're seeing the 20,000 new jobs figure from 2018 to now. It's just they play this narrative and this formulaic game with Trump to keep him happy and then he gets distracted and moves on to something else. Yeah.

I think it's also a difference in leadership style here. You mentioned Apple kind of follower. That's one part of it.

I think, you know, cook doesn't need to be out there with the tech bros and trying to be, you know, the Musk and the Zuck and the whoever, you know, he, he's just not into that part of it. It's all part of the, um, you know, perception is the alternate reality nowadays, instead of perception is reality. I, I agree with you.

It's a, well, what is that 500 makeup? Well, it could be, yeah. Apple Cash investment, whatever.

It could be ecosystem of Apple and all the partners and everybody that is part of, you know, investing and creating technology that ends up there to support or part of their product. So it it's, it's a game. It's a game.

And, you know, it's about creating the people that are supporting Trump's policies and, uh, getting them to be visible and vocal about it. And nobody goes back and says, let's do just sticker the tape here and see what really happened. No, that doesn't happen.

Can I just mention one really thing, thing really quickly is like a picture tells you a thousand words, right? At the inauguration. You notice we, we have this iconic photograph of Zuckerberg pka from, from Google, Bezos, Musk, all lined up together.

Guess who's behind them? To the right to the left of the camera, just out of range. So you can't pick him up.

It's Cook. He's the, the Apple's also the company along with Microsoft that wasn't too obvious when it came to doing things behind the scenes as Meadow was and as Amazon was. So in a sense, this guy is the cook in a sense is kind of this kind of cool customer politician type.

And I think he's handled it pretty well. But the, again, I'm just gonna go back to it, the $500 billion, that's just as like, I, that's, I cannot believe that's gonna happen. So let's take that number apart because you know, we used to see IBM do this crap all the time.

They'd stand up and say we're gonna spend $50 billion on something. But, you know, they added up every nickel that they spent on every other. It's like, how much do you saving us?

Right? Similar. So, I mean, $500 billion on a company that to your coin, has been spending 10 billion a year.

So that's gonna ratchet up by a factor of what that doesn't seem. Yeah. 10, 12 and a half.

Yeah. So, so if that's the case, you know, Alan, I don't know what you think, but every time I turn Around you Alright. Lemme tell you what I think I've been very patient.

Let me just say the emperor has no clothes here. It's no secret around the world that this buffoon can be played like a cheap suit on a, in a, in a nickel piano bar. You come up and tell him what you're going to do, and the more you promise and the more outlandish it is, the more he touts it.

This is not a new script. Where's where's the money from? Uh, son, from SoftBank from the last time he was president, they never invested damn time.

Where's is Boss? I'm not done yet. Where's the factory that TSMC was building the last time we were here that they never broke ground on?

Has any of these MFS ever spent anywhere near the money they say they were gonna spend? This isn't an old IBM thing. Macro did it yesterday in the White House too.

This is theater at its best when you've got Charlie Chaplin playing the dictator. And people could come in and do it and say whatever they want and he gets all happy about it. Guys, wake up, smell the coffee.

First of all, what, what exact AI server is Apple making? Are they going into the server business? Is that what I'm assume?

Is that what I'm hearing? Because I I'm not aware of any Apple servers. Mm-hmm.

It's only the ones that they use for their own cloud services, theoretically. Yeah. Yeah.

They don't make servers stop. Oh, you kidding? He But Alan Allen Cook could just make something up.

He Used it. Come up with any type jumbo. It's not smarter than everyone else.

Right. They all make s**t up because that's what we live in. We live in a b******t world where the more you BS and the bigger the Bs and the louder you say it, and the more you say it, the more he expects people to believe it.

I've had enough. It's a month in and I'm done with it. I don't believe a damn word that comes out of these things.

Just as I, I didn't say it jokingly. This is the same thing with do saving us a trillion dollars. If, if, if 1% of that is real, the whole thing's nonsense, but it's consumed by an audience that wants nonsense us.

So we're not gonna Yeah. We're not people. We deserve what we get.

So you don't believe that. So you don't say you don't believe that Meta's going to, uh, plans to construct the world's largest undersea cable to advance, to expand high speed internet access globally then I'm being Facetious. Well, well, why would we give them our, I'm being very facetious.

We're gonna keep all our internet access here. But Alan, you don't understand. We wanna believe, we wanna believe we want this to be true because if we don't, then we're wrong.

And that would be bad. We're not gonna admit we're wrong. I'm saying we at the bigger we, not me.

Yeah, no, I mean, we, we could say whatever you want, but look the facts, bear it out. Right. Some of the nonsense too is like, how many of these jobs are actually gonna get created?

Even if I built this giant factory in Houston, all that's automated. So there's not gonna be actually a whole lot of people getting additional jobs just other than that guy maybe who's overseeing the robotic construction engine. Well, yeah.

That, that's, that's what can, I'll just show you the ludicrous, the, the ridiculousness of this take 20,000 jobs divided into 500 billion. What does each job costing you? A lot?

Well, yeah, that's Price. Each job cost something like $50 million. Those are real expensive.

F*****g, excuse my language, those are real expensive jobs. Those are real expensive jobs. Let's, let's to Pretty it Up To pretty it up.

Apple said they were gonna focus on r and d, the jobs r and d, Silicon engineering. What? Ai machine learning.

Again, it's, you know, just feed the beast. Just tell the emperor what he wants to hear. That's all.

Not his head approving. This is some, I'm not sure if it's quite Caligula or was still at Niro, but it's something in that, in that range right there. I never thought I'd hear Caligula on this show.

Wow. It's $25 million a job, by the way, Alan? 25 million.

Excuse me. Okay. Those are some pretty expensive jobs.

So who, the math doesn't even work, but who cares? These people don't care. We won.

We won. You know, They do think they really are gonna open some factories. Like are they opening a factory?

Yeah. Are they Their AI servers? Okay.

They don't have AI servers, Amanda. But, But I'm just saying, do we think they are? Like, are they gonna build a factory to start AI servers?

I'm just curious. I I think they'll build something that looks like a factory, but there won't be any workers in it because it's all gonna be run by robot. They all automators.

I Mean, look, if you're, if if Apple was serious, they would talk about building iPhones mm-hmm. In the us You know, the, the, the irony, the irony in all this is that the guy who told the truth about how ridiculous this is is Musk in his own weird way when he said that the Stargate would never bring up five, spend $500 billion, let alone raise the money. So, I mean, in a sense he knows how, how patently ridiculous this is.

So Well, but, but, but, so there's the corruptness of the whole thing at the very top. The people like Musk and even, I don't know about Trump 'cause he, he is in a bit of his own world, but, but Musk and some of the other evil generals behind this, they know that this is all for public consumption. That this has no, no foot in reality, but it's red meat for the masses who, who consumed this crap, who are gonna say, look what he did it.

And, and no immigrants will work there either. No H one B visas on all red blooded ADEs. And It's a good thing all those people were laying off and the government will now have jobs working for Apple.

Hey, 20 million. Yes. 25 million job.

I quit my government job for that job too. I'll just take the recruiting fee on that on this guys, please. So I for 1:00 AM not going to be, I, that's not me, right?

My thing. Yeah. You know, I rewind.

This Is like the most, this is the most effective news Apple has announced in a long time since the products have, have been exactly knocked our socks off lately. So, Well if they, I guess it's a great free marketing for them type of products. Yep.

So do you think we're gonna see, you know, Samsung show up and start talking about how they're gonna make phones in the US and Yes. Factory next door to Apple. Mm-hmm.

You know what they Say? Talk, talking about? Yes.

Mm-hmm. Talk is cheap. And if that's all it takes that and a little flattery and they'll vote for you in the un resolution too.

You're good. I mean, this is the state of the world we live in. As, as, as Laurel would say to Hardy or Hardy would say to Laurel, it's a fine mess we've gotten ourselves into.

So you used to say the new normal. It is the new normal right now. Well, On behalf of Textron and John and Amanda, I'd like to pledge right now that we're gonna write 50 billion words about this in the next five Of you.

Seems like we have actually No, I'm just kidding. Mm-hmm. That's for sure words.

That's about right. Transcribe this video about 20,000 times and you're close. I'm just trying to find anything to add to this.

You know, as a Siri person in the room, lemme just say it, right? You know, I said, I think you're all right. You know, I think you're all correct.

And I think, uh, Tim, uh, cook is, is in his corporate role and his responsibility to shareholder value doing, as you discuss exactly the right things, stand just outside the picture, say the right sort of mouth things, you know, and, and protect the, the corporate interest. Um, and Alan, I, you're right as well. Like, this is again, as we discussed, this is this information warfare environment we're in.

Where when you get to the point where, you know, the, the Steve Bannon goal of bearing the field in, let's say manure, um, to the point that nobody can tell one thing from the other, that's when just shouting works the best because nobody can figure out what's true. So the loudest voice wins. And as, as you know, aside from every other role, you know, anybody in my profession has, you know, remembering that it's information security, not cybersecurity.

You know, we're the folks supposed to understand how information can move around in ways that people can use that it's not working right now. We've got work to do by the answer. Dunno.

But yeah, that's, this is the world we live in, Certainly is my friends. All right. Um, let us take a break here on text Textron Gang.

Let's calculate how much we could really pledge of what we're going to commit over the next four years. We'll be back. You're watching Textron Gang, Discover Textron Group, the epicenter of tech innovation.

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4 billion on AI and data centers and all kinds of fun things. And Chris, you know, I'd love to get your opinions here because one of the things people don't really talk that much about Alibaba is they have data centers in Northern Virginia and California. And given the current climate, how political do you think all this is gonna get?

Are we gonna wind up someday serving eviction notices to Alibaba to kick 'em out of the country? Because everybody's just gonna line up on their favorite national boundaries. And I'll add Lenovo into that mix too.

So how crazy can crazy get, Oh, it can get really crazy. That's a, that's the thing about crazy, right? The the range is always wide, and I don't know, it, it's, it has a Cold War kid, right?

I, I have this funniest sort of slanted view of what's going on in the world right now because I grew up with the idea that we have these countries, the Soviet Union and China behind their gray walls, you know, they're just, they've cut themselves off from the world where we are the free market, free speech capitalist DD democracy side of the world. And we'll engage with everybody. We'll, in fact, create a global supply chain and we'll teach you how to, you know, do the same things we do back at home so that you can do the same thing and make money and heck buy our product, sell us something.

Heck, you know, we'll, we'll, we'll go nuts. Which is the, the whole American thing, right? And all my life, my, I as, as I've said, you know, I belong to all three major political parties at different times.

I believe that each time I, I think there's interesting points we have is a bunch of crazy yanks, but that's what it boils down to, right? Right. Almost unique.

You know, I, I think I love this country. I think it's, it, it maybe, it certainly is, you know, everything's unique, but I think we have a special role in this, and I'm a security person, I get it. So watching Russia cut itself off from the world, you know, a, a krep, uh, uh, you know, dictatorship from this classic, uh, doke, right?

You know, watching China go the opposite direction. Anybody, any American who's done business in China, you know, in the re the modern area, you walk around, it is a capitalist, boiling furnace. People will sell you things.

You can't walk fast enough not to be sold something walking down the streets. And then to see us now arguing the exact opposite of everything we've argued since Eisenhower. Right?

You know, let's wall ourselves off and let's make sure that we can, I don't, I don't think that's the right direction at all. Um, but I will say that, you know, on the security, you know, having supply chain is a thing, and we really do need to, for a purely security reason, know what's in our stuff and who did it, and, and to the right level of no, all the way down. And we haven't been able to, um, we can't feel comfortable about things, not just in these massive geopolitical things, but really anything until we can figure out how to do that, and we're getting there, we will get, you know, it is achievable now this decade to implement in a individual sector, for example.

Um, really astounding visibility in the supply chain. Now, if we had that, and you could then say, now at the nation state level, geopolitically, you know, we have these concerns, where is it? Instead of just napalming, you know, entire continents with policies, you know, that might be a different world.

I don't know, John, one of the things you hear all the time is that we're losing the AI race to China. And I can't tell if that's real or if that's just some scam that the valley's running to get more funding on Wall Street and the, and the government. I think it's the fear of missing out.

You're right. It's, it's the whole FOMO factor that we mentioned at the top of the show, right? You just, you just create this.

I mean, it was like the us uh, channeling what Chris said, going back to the Cold War, the, the defense contractors would, would warn us about the, the nuclear arms race and how we, there was a missile gap. And then we would, in a sense, get more funding, more funding, more funding for defense. I think the same thing's happening in Silicon Valley where there's this fear factor.

Deep seek really hit home with it. And in fact, deeps seek is coming out with its sequel to R one very soon, evidently, according to a, a Reuters report. So there's this, this, this, this calculus that the companies are making here, because they're getting so much funding for anything that's AI related, even if it's a silly idea.

And, and again, you, you prop up China as the big enemy, you know, deep seek, uh, Alibaba, whomever, or by dance. And you, you, you create this enemy, you create this fear, and it just helps you, it just, it's very self-rewarding. So, you're right, Mike, this is, this is where it's going.

And the, the narrative's just gonna intensify, and you're seeing it like every other day. There's like some ridiculous amount of money allegedly going to a project. Um, and it's, it in a sense, it'd be interesting to see in hindsight, what percentage of the money's actually spent that's been promised.

You know, it probably is gonna be less than 20%. Well, you know, uh, John is, we, we, if you remember back to too big to fail, right? The institutions that are so big, we can't allow 'em to fail.

We, we have a similar kind of attitude around ai, I think at all levels in the, whether it's nation states or the latest startup is AI is, is too important to lose out. And so that's why we see such massive dollars being spent on data, ai data centers, or at least, and the big claims, the $500 billion kind of claims. Some of it is marketing position and, you know, keeping your name in the, in the conversation.

And some of it is real spend. But we're in this race to spend as much money kind of race to the bottom of how much money can we spend on ai just out of fear of losing. And at some point that will of course be so over overburdened in terms of bubbles and market sizes and ridiculousness that we'll, we'll pay the price for it.

But that, that's the era I think we're in right now, Right? It'll correct itself. It's just a question of how long this is gonna last.

I mean, it could be six months, it could be a year that there's such a volatile pace to all, everything that's going on in terms of the funding, the promises, the, the models that come out seemingly every day, that, that beat others in terms of benchmarks, which are very nebulous to be, to be charitable, Little irrational exuberance. Anyone. Um, so let me, let me give you my shimmy take on this one.

You know, I, I spoke about this, I think it was two weeks ago, and I called it, uh, AI imperialism, right? And that's what you got going on here, right? Let, make no mistake about it, Russia is probably not in this race until, until we become very, very close allies.

And Trump will probably transfer some of our best AI technology and build some factories and data centers in Moscow and, and St. Petersburg. 'cause after all, they are, are our best friends historically.

Um, but the real race here is every world power is trying to take, become a leader in ai, right? That deep seek with Sputnik. And now the us my God, they're panicking.

And we're gonna spend $500 billion on Stargate, and we're gonna do this. And Apple's spending another 500 billion and we're putting it all here. We're gonna be the US leaders of, well, we don't wanna be leaders of the free world.

We're just gonna be the us the greatest country on earth. And it's all gonna be right here. And if you want to use it, you gotta come here.

If you're over there, you can't use it. You gotta come here. Europe says, well, we're not coming here.

We're gonna make our own thing. And we're investing a couple hundred billion dollars too, including Ukraine, right? Then you've got China, and, and China's a different cat because when Aaba says they fit 52 plus billion dollars, you got the full faith and credit of the Chinese government behind them, basically, who own, I don't know, a couple trillion dollars of US bonds, right?

And their game is clear. They wanna be the preeminent power in AI because they'll be the rest of the world who is gonna want to use it? And that's really the game here.

Who, who's gonna own the Spice trade? It's the same game that's been going on in on earth for the last 500 or more years. Who's gonna own the Spice Trade?

Who's going to, who's gonna have the, not the monopoly, but the best of whatever the latest commodity is, right? We're fighting for, dude, it's ar rakus. He who owns ice, the oil fields, it's name, the name, the, you know, most important asset.

Chris, do we need, do we need the equivalent of a speech from President Eisenhower warning us about the AI industrial complex? Uh, no. Right.

You know, I, I, I, I have to, I had to put some light back in the room and, uh, not that, not that the, the doom prognostications or or risks aren't all over the place, you know? And, and yeah, I mean, and what my last comment, I was thinking more general, generally, right? As you guys were saying, you know, there's, there's a lot of posturing of money I arguably throwing around and so on and so forth.

And it is what it is. You know, I'll believe it when I see it. Um, but, uh, you know, I, I think, you know, I think like a lot of waves, I'm a little crazier and stupider this time for various reasons.

It's right and it's wrong. I think that it is important. I think what we're currently calling ai, oh gosh, it's kind of what we've always thought computers are supposed to be.

You know, we shouldn't have to actually know how this transistors work at the atomic level to be able to use the bloody things, you know? So the irrational exuberance is at every level, right? It's like, so our governments and our governing bodies in the state that they are responding as, as you folks are saying, kind of stupidly, you know?

But, you know, and it could be the end of the world, you know, lots of things could be the end of the world. But, uh, I don't know. I don't think the, I don't think a a nation, we, number one, we don't have an Eisenhower or anything like it.

Um, and I, we don't have the same sort of reach. There's not three channels, Right. You know, you know, and Do anything about this.

You, you, you know, there, there was this in his, remember in his farewell address, Biden referred to the tech industrial complex. I think that's what he, how he, he phrased it as kind of a warning shot as he was leaving. Since he left, things only intensified.

It was almost as if he never said anything, which is probably par for the course, but, and it was, it was ignored, if anything, things accelerated and, and tech got more powerful. So his warning shot was kind of an echo and a distant cave. Mm-hmm.

I guess. Well, you know, if you whisper for something, nobody's gonna hear it. So that's kinda, I wasn't gonna go there, but you're right.

Yeah. I mean, it's, it's a mess. As an entrepreneur.

I mean, John, you're right. You know, I mean, it's, it's funny, you know, among my left-handed friends, you know, I'm the capitalist pig corporate guy, right? Goes on pretty, I really believe in all that stuff.

And, but this doesn't help. Right? You know, concentrating all the wealth in a couple of hands and all that, that's, we did that for like, I don't know, most of human history.

Um, the idea is to have consumers who can afford to buy things and start companies and do stuff. So all this 500 billion here, 500 billion there, and tech bros who, you know, dominate the everything. This, this isn't great capitalism, aside from everything else, what it's supposed to be cut At is this move from Alibaba.

It's a sad state of affairs, affairs when the Chinese not capitalist us. Uh, but this move is clearly, they are planting flags in AI throughout the world. They wanna be the world's AI provider.

And, and don't kid yourself, Tencent, Alibaba, Baidu, these companies have the, the muscle, especially if we retrench and just focus inward, that will, we could wind up not being the leader in ai. That's true. And if you're sitting in Africa or Asia somewhere, and you're watching what the Americans are saying, who are you gonna turn to?

Absolutely. And that's, and that, that is, that's the game here. That's the game.

But don't worry, we'll have Russia. So I'm genuinely, um, curious, I just wanna hear your thoughts. Um, are there any security concerns that the rest of the world will have to have if one country comes out way on top with AI and con controls, most of the ai, will there be security concerns for the rest of the world, or that is Security and dominance in the world is obviously from weapons to economies to you name it.

I mean, that's the concern. There's reasons for this big race that we're having. Yeah.

Well, it's like the, like the, the space race, right? You know, and a lot of people, you know, I live on starlink, right? I, I had the opportunity to, uh, long conversation with Gwen Shotwell, who runs SpaceX and Starling and all that, uh, like five years ago, and I've been using it ever since.

And it's me, a lot of people saying right now, all these satellites and Kessler syndrome and messing with astronomy and so forth, the editors stand that this is, this time China is putting up massive, Europe is putting up massive communication satellites. We're in the era where there can be massive s uh, satellite communications array. You know, there need to be more than one.

And one of anything is, is dangerous and risky. Um, this, this issue, ai, big, big huge ai, right? The sky net potential ai.

Yeah. There need to be more than one, right? It's all to all the conspiracy theorists out there, right?

You know, even if you're right, there's seven other conspiracies, they're, they're arguing amongst themselves. I think mostly we can ignore things as long as there's not too much concentration in one spot. And this is, yeah, I don't think we're at risk of that actually happening.

I think we're at risk of global conflict because of perceptions is not happening. But, uh, but yeah, we can't have, there cannot be only one. This is not Highlander.

Okay. Alrighty. Let's take a break Reference, but I got It could be only one Sean Conner.

Anyway, hey, let's take a break here on text Sean Gang. We'll come back. We've got our third block to go over.

Hopefully it's a little less contentious. com is the leading resource for news analysis and education on challenges facing the cybersecurity industry. com covers all aspects of cybersecurity, including data security, DevSecOps, cloud security, application security, network security, security threats, and more.

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Home of security bloggers network. All right, we're back with that slightly less contentious se segment that we're about to talk about, where the president took time out of his incredibly busy schedule to call out the European Union for applying taxes slash tariffs to digital services that are created outside the, of their particular country and region. Uh, that got a quick response from the EU country saying, uh, a mine drone business essentially.

And we'll continue to do what we're gonna do. But, um, this managed to get rolled up into this tariff conversation, and we talked about the impact tariffs were having on tech last week, or I don't think Alan was on that show, but, um, as you look at this, isn't there kind of strange to me at least, that everybody in the tech sector who showed up for that photo that John was talking about, last segment, has a stake in this conversation. So, is there aquid pro quo at work here?

Alan, First of all, let me mention that was probably a decision he made between the eighth and ninth hole, right? How hard he was working. But that, that all being said, surprisingly, this is not one where I strongly, strongly disagree.

I, I, I'm against tariffs in, in, you know, as, as, as Chris said, I also grew up as a Cold War baby where the US was about free trade, and we're gonna out trade out, manufacture out, innovate, right? To maintain our leadership in the world, not, not put up walls. Um, however, the EU clearly put up walls, right?

The eu, and, and I understand why they did it. They, they, they were trying to get their mojo back, right? And, and become a world player.

And so they, they put in, they impose these digital service taxes, um, on anything not coming out of there. com days and company, I helped, uh, build inter reliant. We, we did a deal with Sagittal in France, and we wound up putting a data center in, uh, right outta Paris.

And, and we did a lot of, of, uh, European business. And, and there was clearly home cooking at play, right? And if you were, uh, you know, a US company, it, it, they made it a little bit harder for you.

Um, I'm not against the u I'm, I'm against the US doing tariffs, but I'm not for the EU doing tariffs either. I think we all have to play by the same rules. And so if this is a case of, Hey, you show me yours, I'll show you mine, and let's all go back to even Steven, right?

And just let the chips forward. They may, I'm all for it, but if you are going to tax us firms because you want to encourage a domestic EU domestic, um, industry of di you know, digital business, I, I don't think there's anything a matter with us reciprocating with that. And as long as that's what it is, but that it, it sh I think we have to said, we have to remember that that doesn't mean they're not our allies or that we should go cozy up with the, the dictators in the authoritarians of the world.

But I think we, we all benefit when we have an equal playing field that, you know, it's almost like there's three levels of this. One is terrace, four, you're trying to incense some behavior or disin some behavior. Then there's the, uh, response to that, right?

Uh, okay, if you're gonna do that, I'm gonna do that. Then there's this third tier of I, I'll use it as a, as a, a bludgeoning tool, uh, as a political tool to get people's either to get people's attention or maybe really to, to, uh, punish people that we don't like because of some political, whether it's, you know, border crossings or drugs or whatever we wanna name it. I, I question whether at all that's really true, why Trump is doing, I think it's largely a negotiating ploy to get people's attention and to basically bully them into what he wants.

So we seem to be doing a lot more of that. And I suspect that you use response is probably more of this kind of first and middle tier, but you don't know that either. It, it just interesting how we're suddenly thrust into this.

Tariffs are only about politics, and of course they aren't. So the thing with the tariffs though, is it seems like when we reciprocate, it's not one for one, right? We'll turn around and we will say, you know, we're gonna slap tariffs on, you know, wine because they're taxing digital services.

So how do we keep this thing from escalating to the point where, you know, it just becomes this arms race of tariffs back and forth to the point where we just all destroy our respective economies. Yeah. I've never much understood the point.

Of course, I'm not in economics, uh, and I'm sure there's people who, who know better, but I've never understood the point. 'cause it just seems like one country imposes a tariff and the other country imposes it right back. So you either all have a bunch of tariffs, or you all don't have tariffs.

I mean, really, it doesn't, I don't get how it works, I guess, but I, again, I'm not in economics, so, Well, I think you're spot on 'cause it doesn't work. So that's it. Well, you know what, the idea here is fully expecting that we're gonna get into this tariff tip for tat.

And the thought is, well, our market's bigger than yours, and so you wanna be here more than we wanna be there. And, and that used to work, I think when Eisenhower spoke about the industrial military complex, complex. But you know, when you look at the combined European market, it ain't a heck of a lot smaller than the US market.

When you look at, you know, from both a population and, and you know, dollars, euros, European, uh, Chinese market, not a heck of a lot smaller than ours in a much bigger population. India rising, huge population, right? So, you know, thi this is, this is who's gonna stay in the latest, right?

A little bit of a game of chicken is what you're playing. Mm-hmm. So, So taking your thought about free markets, and let's just keep them open though.

What happens though when, um, suddenly China uses its manufacturing muscle to flood the US car market and we're all driving Chinese cars? Is that okay? Because they cost a third of us cars, or No?

So here, go ahead Chris. Go ahead. No, no, you go.

So, So in, in, I think about, I'm trying to think of this in a security model, right? You know, so you would think that security people would be happier with more security. Um, that's not true, right?

You know, 'cause you can have as much security as you want. We can lock your front door, we can lock every door in your house. We can make the keys to the locks in your doors in your house, so hard to get to that you stop using rooms, right?

You know, and this tariffs, and as we all know, we're in this information space where it's hard to you, you really have to love tariffs or hate them. You have to love firewalls or hate firewalls. You have to have no, no doors whatsoever, or all the doors need to be cemented shut.

And, you know, to your, to your point, Mike, yeah, sometimes tariffs economic, you know, uh, vehicles, you know, need to be used to or levers, need to be used in negotiations. And that's how you deal with that sort of thing. You slam a tariff on it.

But when you start putting, just saying, we're gonna have firewalls at every internet connection and every light bulb, and you're gonna get access by the system administrator who you can get between the hours of nine to five on Wednesdays, you don't have a network anymore or an economy. That's true. And it's every other Wednesday, not just Wednesdays.

Um, but a a again, i I just, you know, if we're gonna go free, so with the Chinese cars in particular, you know, Thomas Friedman in his series of flat Earth books said, everyone wants to live like an American. They don't necessarily wanna live in America. They don't necessarily agree with everything the US is about, but one thing they all want to do is live that American lifestyle, consume, you know, live a good life.

It happened to Japan, right? And it's happened in China. When we talk about Chinese cars, for instance, flooding the US market, the thought is, it's not that they outcompete us and make a better car.

The thought is, is that those cars are subsidized by the Chinese government so that they, the the costs are artificially low and not true when you take out the government subsidies, or even worse, they're made with slave LA labor from the Muslim, uh, territories in China where, you know, know, and it, and it's forced labor, right? Part of that free market thing is, hey, if, if it's truly a free market, if it's truly a worldwide free market, all things equal and you out innovate us out, produ produce us are smarter than us, more power to you. But if you're, if you're using government subsidies free or forced slave labor, child labor, in other words, you're not playing by the same rules, then there's nothing your matter with putting up barriers to that.

So if the Chinese can build a better car than we can in Ohio or Detroit or, or anywhere else in this country, more power to 'em. I don't think that's the case with Chinese cars, though. I think they are heavily subsidized.

I think the, the r and d work comes out of Chinese research labs. I think, you know, the, the labor is, you know, you for instance, well forget cars for a second. Let's look at Foxconn and the iPhones, right?

Those, they used to make it very cheap, but when they had to start kind of playing by the same rules, all of a sudden it wasn't so cheap to make 'em there no more. So that's where I am on, on, on the free market. Some would say the, uh, r and d for those Chinese cars came from Detroit and Germany, That that's a whole, right?

And that's another joke that could very well be too. That could very well be too. And if you prove that that's the case, that's yet another reason to put up barriers.

Yeah, but here's where it kind of gets very complicated in my mind because, so if you go to Africa or even South America, you start to see more and more of these Chinese cars. So they're not just leveraging up to own their own market. They're leveraging up to own other markets around the world that we can slot tariffs on.

But then that gives Those markets, we only care about our market. Well, we have to care about Shortsighted. But, but you just put the nail on the head, Mike, is we live in a global economy.

We're all interconnected, and we have gotta figure out a way to outcompete our competitors. Putting up walls and trying to just isolate ourselves in here is not the answer to our competing our competitors. That's why it's foreign into some of those countries.

So they say the US are good people, Right? All right, we're gonna, we're gonna give you a discount on AI if you buy 10 Fords, Or maybe we'll help your people feed themselves. Oh no, we can't do that anymore.

We shut that down. All right, we're gonna end it on this cheerful note. I just had one question.

What are tariffs? It's a good question. There, there, there, there are taxes that you pay that someone cons you into thinking somebody else is paying.

Yeah. Oh, there's a lot of that. Anyway, All right.

I'm charact please. Are we gonna be back? Are we gonna be back tomorrow with more, Mike?

I can't wait to see what else you come up with for us. Don't come on. I think I tried to put all the political stuff in one episode 'cause I thought, Hey, enjoy your Wednesday.

We've got a lot of great text on TV following this. Probably a little less of this politically themed charged stuff. Um, we've got some good tech, which is why you come here.

Um, we'll be back tomorrow with more. But until then, on behalf of Chris and Amanda, John Mitchell, and Mike, I'm Alan Shimel, and we're outta here.