Techstrong Gang – July 8, 2024

Hi, everyone. Happy Monday. Hope you had a great holiday weekend.

We've got a lot to go over here. We're gonna talk a little ai, a little Elon Musk and security. What more is there in the world you're watching?

Textron Gang. Hi everyone. Alan Shimmel for Techron here for on The Textron Gang.

We're back on a bright Monday. For many of you, it was a long weekend here in the US for those around the world watching, uh, you know, the July 4th holiday is a traditionally big holiday here in the US and, uh, a lot of us are just coming back to work and, and getting into it. But it's Monday, we're around the world and, you know, we hope you enjoyed your weekend and ready to rock and roll.

We've, as I mentioned in the opening, we've got some great subjects we wanna jump into today. A lot's been going on, but before we do, let me introduce you to our gang members for today. Uh, we've got a good mix of East Meets West, at least Eastern US and Western us.

Uh, joining us from the western US out in their homes in the California Silicon Valley area. First of all, we have our fu resident, fu analyst personality, Corey Johnson. Corey, welcome.

Glad to be here. Not my home, I should say. I'm in the ferry building at Shack 15 in the heart of San Francisco, where it's warm, but nowhere near what the rest of the country's going through.

No, it's, yeah, there's a lot of warm down here. It's always warm, but that's what happens when you live here. Also, joining us in San Francisco is our editor and, uh, resident expert John Schwartz.

Hey, John. Welcome. Hey, Alan.

It's, I'm about a 20 miles south of Coring. It was a hundred degrees yesterday. It Is a schwar Here.

Yeah. Has it? That's brutal.

Brutal. And then, um, joining us, well, speaking of, it's not a hundred degrees there, I'm sure he is still up in Lake Placid waiting for the Winter Olympics to kick off again. Uh, it's our Chief Content Officer, Mike Ard.

Hey, Mike. It's not a hundred degrees up there, I bet. No, it's a sweltering 65 this morning, so I'm suffering just like everybody else.

Yeah, yeah. You know what that is, right? A way to stick the knife in.

Thanks. Yeah. Little hearts and flowers for Mike Ard.

Anyway, um, so guys, let, let's jump right into it. Our first, our first topic today is all in on ai. And, uh, geez, I, I, I didn't think that was controversial, but Mike, what's the story?

ai, but the, the backstory has always been, there's been this assumption that AI was a big company game. 'cause you needed a lot of data to train the models and make it work. And yet these surveys seem to suggest that small companies and mid-size companies, there's two surveys, are, um, wrapping their arms around this and starting to use this.

I guess my question is, as to what degree, but John, any of this kind of jump out to you and surprise you a little bit? Yeah. So, so what, as you said, what wasn't a surprise is that these large enterprises are rushing to implement AI and they're finding, they're having some growing pains as they kind of, when their way through the process.

What is interesting is that a lot of small and mid-size companies are pursuing the same strategy. They're not as far along, and they're fairly optimistic. I, I probably should caution that these surveys looked at them and asked them where they think this will take them, where this could actually mean for their business.

So they're overly optimistic. We'll see where they feel like or what they, what they say after they start going through this painful process of trying to make it happen. So, uh, a couple stats jumped out at me.

There were more than half the mid-size companies said they were making AI investments their top priority in about eight outta 10 are jumping towards implementing gen ai. They think it's gonna have a significant impact over the next 12 months on productivity, competitive advantage, profitability, et cetera. Uh, what's interesting is that they also think that this is gonna happen despite AI's influence on their internal operations.

And, and in other words, they're, they think that it's gonna have a profound impact on jobs within their company. So they're gonna have to reallocate resources, they're gonna have to hire more people and probably gonna have to lay off some people. They're optimistic despite what this could mean to their business.

And so, in a sense, it's an early look, an early frame view of them. Also, there was another survey that came out after these two that we talked about that found that 80%, nearly 80% of the decision makers reported an increase in the use of AI and fraudulent attacks over the past year. So there's a cybersecurity threat on top of everything else.

So, as, as Mike, as we keep seeing with the, the hyperbole around AI is everyone expects miracles overnight, but they just don't know there's a lot of pain points before they get to that nirvana that they hope to achieve. Alan, the tension's always been between, uh, large companies that have the money to invest and smaller companies that are more agile. And there was a thought going around for a while that said that the AI would favor the larger companies with the resources, but do you think we're on the cusp of maybe democratizing AI to the point where smaller and mid-size companies might, you know, be faster and benefit more and maybe smack some of those larger companies around the head a little bit?

Well, I, I think the important thing to remember here is that not all ais are created equal, nor should they be. Um, you know, until the Supreme Court rolls on it, who knows? But I digress.

Um, I think that what we gotta remember is the kinds of task that big companies are gonna ask AI to do may be very different than the kinds of tasks that small medium businesses are gonna ask their ais to do. Right? SMBs may not be as, um, focused on, for instance, creating their own l lms.

They're perfectly happy using a well-trained LLM to help them with some marketing task and some writing and, and some ideation and, and stuff like that. Um, even to, you know, generate some simple Python scripts or, you know, other kind of coding, if you will, where a larger organization, you know, they could really use that a custom LLM or SLM or whatever you want to call them, to help with some very specific enterprise type of, uh, functionality that AI can really help with supplementing or even replacing workers, perhaps. So I think both sides of the equation will benefit from ai.

They'll just use different aspects of AI and use AI in different ways. That makes sense, given their resources and their aims and, and, uh, your know, goals here. Corey, do you think Wall Street will start evaluating how companies are using AI to, to end the degree that they're using that to judge valuations of these companies?

We've been on this kind of hype cycle, but, uh, will people start asking tougher questions about, Hey, what exactly is, I don't know, I'll randomly pick Eli Lilly doing with ai, and is that gonna factor into their stock price? And, and, and how savvy is the analyst gonna get? Yeah, I think that, um, uh, what the, the way that the market's gonna evaluate this in terms of company performance, I'm, I'm putting the, the, the, the market of the, the Crazy Wall Streete bets.

I don't care what the companies are. Uh, a number goes up world that's aside. I don't consider that actual stock or, or business analysis, but the business analysis Wall Street's doing it is about productivity.

And we're in a really interesting period right now where we have AI coming, AI tools coming in, and I think it's, it's already table stakes to assume that every company is finding ways to do more with ai to create more, uh, and to do that with less what we saw, particularly in tech companies. But really across the board in the last, call it 36 months was companies cutting back for fear of a recession that never came. So, um, we, we, we have not seen the recession that so many companies saw, uh, in the, in the future.

Uh, that was about nine months away for about two or three years. Mm-Hmm. And so we saw significant cutbacks in employment and spending from all of these companies just as ai, uh, is becoming a potential, uh, uh, tool for companies to use.

And so what we've seen is companies already cut back ahead of a recession that never came, and now they've got AI tools to further add to productivity. So in, in broader labor statistics as well as, as in specific company analysis, we see companies margins improving. We see, uh, uh, operating margins improving, uh, because they're getting, doing more with less.

And I think that that's only gonna accelerate with ai. And then, uh, you know, when we get into our sort of tech strong futur group or real studies about it spending, what we see is that companies are able to spend an IT and they're able to spend an AI should say, getting my acronyms wrong, two digit, two letter acronyms, uh, able to spend on ai, um, in ways that they might not have been if they were still supporting all that staff. They were still supporting all those other things.

And even pulling from things like cybersecurity, uh, it looks like to spend more on ai. So I think we've only seen the beginning of what companies will do. But so now let's take it to the conversation of small company versus big company.

We're gonna see innovations from small companies because we always see innovations from small companies. 'cause they move faster, they're more nimble, and they find, um, uh, disruptive solutions 'cause they don't have anything to disrupt. And so we're certainly gonna see that going forward.

But the biggest, um, uh, uh, the biggest tools for AI require enormous amounts of spend, large language models and the processing of those models are so much more expensive than the processing of other data, 10 x other data, 10 x more power, 10 x more computing speed, um, more computing power, 10 x more cost in the data center. And that's only gonna benefit the large players. So what are we gonna get?

Just like we see in everything in our society, we're gonna see the richer get richer, the poorer gets poorer that we're gonna see the dumbbells where you've got the really big on the, on the big side and the really interesting on the small side and the middle becomes a wasteland. I think there'll be, the smaller guys will be more nimble, so maybe the poor won't get quite as poor as you're saying. But, um, I feel like most of these companies don't really have a strategic plan for adopting ai.

It seems like we're kind of testing a couple of proof of concepts and we're seeing what might work, but most of what's going on is employee initiative, and the employees are getting maybe more efficient at their job. But I'm not quite clear that, that actually Yeah, I know. Drop to the Bottom.

Yeah, I'm not even sure that employees are becoming more efficient. I mean, that's one of the pitfalls it seems that I keep hearing from companies. So I, I talked to a couple, uh, some small mid-size and larger companies, uh, piggybacking off these studies.

And one of the things that keeps cropping up is the, the poor training or the lack of training for ai, or just the inability to know how to train for it. They assume that the employees are gonna be thrown an AI tool and make the most of it. So that's one of the problems that's been rearing its ugly head.

And I, I guess for now, right, broadly speaking, I think all these companies, first and foremost, they're trying to figure out a, a way, as Corey alluded to, to become much more efficient in terms of cost and, and productivity. Um, so you're right. But you're right, Mike, a lot of these companies, when you ask them directly, what specifically do you plan to do?

They're just making it up right now. Or they're, they're improvising. Maybe that's a better way of putting it.

I shouldn't say make it up, but they're, they're trying to improvise and, and find their way. Well, part of it is, it's a moving, it's a moving, uh, yeah. Field of goalpost, right?

Because what we could do with AI is changing day to day, minute to minute. It seems, um, you know, Corey, I love, I loved your analysis there. I I think that that really does sum it up.

So many companies, especially in the tech world, have been preparing for a, a, a recession that never came. And now we're in a position where we're doing 25% more with 25% less. And, um, at some point that's gotta hopefully catch up.

I think we're already starting to, to see it kind of normalize there. And, but AI is still very much a wild card here, guys, because, you know, it, it's a, it's like it's an AI chacha one step back, two steps forward. You know, we, like, every time we think, oh, we could use AI to do this, and then you hear reports, well, we could, but it really didn't work the way we thought it would.

And, you know, it, we're still, it's still so early in this AI game in terms of the potential and what it can do will do, what does it do? Right? Now, I I can understand why most companies don't have a strategic plan because you, you can't have a strategic plan when you're trying to put your hands in, you know, and wrap around jello and, and well, I Think the biggest, the biggest implementations are gonna initially are gonna benefit the biggest companies that can really spend vast fortunes on this to build the big tools.

But as we get later on in the AI game, when there are some sort of established, um, you know, when chat GBT doesn't hallucinate as much, right? When the, when the most common tools are more dependable, then we'll start to see implementation from smaller companies that might be so groundbreaking that they, some, some leaders start to emerge. Um, I, all I know is I'm getting ready to learn a new line dance, apparently the AI chacha, I kinda like that.

You like that, huh? Just make sure you credit me on this, right? So it doesn't end up in somebody's LLM and, and I don't get anything for it.

Um, alright. Hey, you know what? I think it's time to take a break here on Text Drug Gang.

We're gonna be back in just a moment. All right, we're back in as promise. We're gonna have a little chat about Elon Musk, who seems to be everywhere all at once.

Latest thing is, uh, Tesla had some movement on its stock because, well, sales were maybe better than expected, but the forecast maybe not so much, but we're also seeing him consuming an ordinance, amounts of GPUs to drive his AI model. And of course, there's GPUs in the cars, and now we're hearing about Robotaxis. So Corey, explain to us the Musk phenomenon a little bit.

And then what's going on with Tesla specifically The Musk phenomenon is explaining is easy as explaining Phenomes. I don't get it. Um, but, uh, let me talk about some numbers that we got from the company this, uh, this month.

So they, they give us quarterly deliveries, um, and, uh, long before they give us earnings results. And, and it's a really useful number. It's the number that, um, uh, analysts bend over backwards trying to find out by looking at figuring out the model numbers and looking at shipment in information from different countries and figure out which countries don't report it and trying to understand those numbers.

But essentially we get two numbers. We get production and we get sales. And what we've seen is that for, uh, I I, it might be too early to call peak Tesla, but six months ago might have been peak Tesla.

We have seen the number of cars sold, uh, now in consecutive quarters decline. So, um, wall Street liked the number, the stock is up a lot in the last, uh, two weeks or so. Um, because the number wasn't as bad as it had been feared, but I should, it should never be lost.

That, and this is one of my sort of, um, pet peeves for the longest time, is there's so much talk about beats and misses. There's a little talk about relative numbers and the relative number is down, and the relative number was down last quarter as well. There were fewer Teslas being sold quarter after quarter for the first time since Tesla started being sold.

Uh, and that's, I think, a, a, a place for concern. Um, there's a lot of reasons for that, but I think that, um, and there's a lot of guesses at those reasons, and I think we will, will, we will, we will undertake a few of those. But the bottom line is Tesla's just not selling like it did six months ago.

And, uh, the, if, if you look at the long-term chart of the numbers going up and number's going up and number's going up, now the numbers are going down, now they're going down again. So take a guess at some of the reasons for that, if you would, because some people would say, you know, EVs aren't all what they were cracked up to be. And other folks are saying, you know what?

The self-driving promise isn't real either. So What's driving? So, um, uh, one of those things is true.

One of those things is not so self-driving is there is no self-driving, right? Uh, uh, Elon's is, there have been many, many lawsuits now be for people dying in, in Tesla cars and some people suing saying that, uh, they were overpromised what self-driving is, and that the drivers, uh, took Elon and his word that, uh, that self-driving was self-driving. Uh, and indeed the NTSP has has, um, uh, criticized, uh, what Tesla has said and, and indeed tried to curtail what they say about how how much these cars can drive themselves.

Um, ev sales are up, ev sales are up, ev sales are increasing. And, uh, amidst the, the poor business journalism that we see when we see numbers from Tesla coming down and we see that some companies like Ford are cutting back on certain expenditures around ev, uh, that maybe EV isn't doing as well. Ev sales are up, Tesla's losing share, mm-hmm.

And Tesla's got a car on the road. Now the, the te you know, the Tesla model y they're best selling car, uh, is five years old now, and it hasn't really seen a significant refresh. Uh, neither has their model s neither has their model three.

So these are cars that are just kinda looking more and more stale, particularly for people like John and I who, uh, see more of them because there are more of them in California than another place in the world. Can I get for one, one second, Corey? Oh, that's just for one second.

So I, so I, I kinda live in a, it's an anomaly for me. I live in an, an area where there are preponderance of te Tesla cars, so it's, it's very misleading. But I was wondering, Cory, just to follow up on what you said, who is gaining the market share?

I'm just wondering what models or what brands are gaining at the expense of Tesla? So when we, uh, it, it's important to look, i i outside of the us, which is a very different world, uh, and China's the most important market. But let's talk about the us.

In the US You've seen a real strong growth from hybrid vehicles like the hybrid Jeep one. I, I own one. So it's, it is top of mind.

Um, uh, those, those models have done really, really well. You've seen companies like, uh, uh, Porsche come in and Volkswagen come in. Uh, you've seen, uh, the, the Polestar models and, and, and then some of them, the up and comers, like the, like Lucid wants to have an offering.

And Rivian is, is actually selling some vehicles. Um, uh, it's a whole different story, but it, and so those guys are, are, are part of the rise in electric vehicle sales. Uh, and of course Ford, uh, uh, is also really important there as well with the Lightning and the Mustang.

Um, but, uh, when you go into China, you see a very different market where the Chinese government has put a, a big emphasis on domestic makers of electric vehicles. BYD has been the big beneficiary, but Tesla's in a weird spot in the market. They're kind of sandwiched in between really low cost vehicles in China that are costing 10 to $20,000 US to really high cost offerings from Porsche and the like, not just in China, that's, that's more in Europe.

But in, in China, you've got some high-end, uh, vehicles as well that are coming in above Tesla with features that Tesla doesn't have. And they're kind of squeezed in the middle here. Also, not a favored producer, uh, when China is favoring, uh, domestic companies, You know, in the immortal words of Tony Montana, they're not the only dope dealers on the block.

Mm-Hmm. And, and that's really, you know, when Tesla owned the EV market, 'cause they were really the only producer. Yeah, it was great having that kind of market share, but everyone knew that this was gonna happen, right?

Because at the end of the day, you've got companies like Volkswagen and Porsche, NBMW to name, to name the German manufacturers. But you've got GM and you're seeing a lot of GM Electric vehicles out there now, and the Toyota plugin hybrids and, and not to mention Kia and, and Hyundai are making some great electric vehicles here in the us. You know, I, I don't live in the valley.

I live down here in south Florida. We see a, a bunch of Teslas, a a lot of Teslas, not to mention we've also seen average Tesla driver having an attitude, but that's another story. Um, but we also see a lot of other EV vehicles.

And, and so this, to me, this had to happen. And Corey, I think you hit the nail on the head when you look at the quality of Tesla vehicles and the, the refresh, you know, how fresh they are compared to some of the vehicles that are out here now. It ain't all that.

Well, it's quality Cyber truck has been completely recalled again Yeah. Twice now. And it's, it's somewhat new to the market.

There have been quality concerns about Tesla's going back quite a long ways. Uh, we read in Walter Isaacson's book about, uh, Elon Musk, about all these things that would do on the production line to rush across the, the mark so they could hit that delivery number regardless of what was happening on the inside of the factory. And maybe concerns about, uh, the quality have have taken, uh, Well, you could get away with that when you were the only game in town, right?

But now you making Real vehicles a order now when you're making 400,000 vehicles a quarter. And let me add to that, that, that the, uh, one of the reasons that people like John and I living in the fancy communities in which we do see so many Teslas in California is because there was a time when their tax breaks were, um, uh, footloose and fancy free. When buy an electric car will give you 7,500 bucks from the state, we might give you more from the federal government, whatever kind of car it is.

And all of a sudden you had people with lots and lots of money, uh, buying a hundred thousand dollars, uh, Teslas getting big tax breaks from the government and the government, uh, getting some criticism saying, Hey, you're giving tax breaks to these millionaires and billionaires. Uh, I won't do my Bernie Sanders, but millionaires and billionaires getting tax breaks for a hundred thousand dollars electric cars, uh, was pretty, it started to become pretty unpopular. And so the government has tailored tax breaks towards, uh, a a away from super wealthy people, millionaires and billionaires who were getting these tax breaks.

And as a result, there are fewer Teslas being sold to those people. Hey, can I throw something out about the robo? So can we me mention the Robo Taxi?

I think it's an August, August 8th. So is essentially, I'm just throwing this out. There is Tesla in between two growth waves and the, and the Robo Taxii represents the next wave since we're baiting away from the past wave.

Yeah. Look, the Robo Taxii has been six months away for, uh, four years now. So maybe it's a few weeks away.

Um, uh, you know, let's remember his humanoid robot. And indeed the, the truck itself was, is, you know, the, I, I do not believe no one does believe the deadlines that Tesla announces until they suddenly believe him. So there's, there's, there is talk of, of an August announcement.

We'll see what that means. Um, but the announcements have kept the stock afloat, um, when it has, when the deliveries have not, guys Look at the end of the day, and I'm no Elon Musk fan, if you watch text Ang you know this, but at the end of the day, you can look at his Teslas and his SpaceX and his boring and what he's done with Twitter. But you know what, Elon Musk has become really good at being a PT Barnum.

Yeah. And there's a sucker born every minute. Yeah.

And, and so there's what Elon talks about, and then there's the reality of what these companies are churning out. Well, that sounds like somebody else we know. I mean, this is, um, you know what, Yeah, it does.

The thing about birds of a feather. Right, exactly. Exactly right.

Par right. Um, one, one thing I was gonna mention, would Tesla kind of make it weird comparison between Tesla and Apple? Apple would wait for other companies to create or establish a market, then they would swoop in and dominate the market.

Right? It seems as if Tesla has created the market created and mainstreamed it, and now everyone else is swooping in and taking advantage of it. That's, and I think that's, I think, um, one, one of the reasons, uh, go back to blaming my people on Wall Street.

You know, Tesla got a fantastic valuation on a de minimis amount of product. Uh, Fantastic. It, it, it was a crazy value valuation.

I choose the words carefully. And, and, and they were allowed Wall Street, let them do that Wall Street, let them lose boatloads of money and deliver very few cars, and they, and, and use the stock to, and, and customer deposits to fund that growth. Um, all of the other makers of cars were unable to do that.

So they had to wait for the market to start to get developed. And so you see companies like Ford even now saying, you know, the charging network isn't there. And the, and the, the customer apprehension is still there.

So we're gonna go a little more slowly than we thought because they're not gonna get the benefit from the market. They haven't gotten the benefit from the market of all the major car companies Ford has probably had of everybody except for BMW, uh, in, in electric. And they, they've tapped, uh, the, the, the Ford though, the functional, unlike the cyber truck, the functional Ford brakes, um, actually no, it was the accelerated the, in the Tesla cyber truck.

That was a problem. Not the brake bad. I don't wanna get, So, so, Alan, Alan, you have an ev right?

If I'm Not mistaken, I, I have a BMW ev. Yes, I have an ix, the X. And, and when you drive that car up north and say you're Going here, I don't drive that car up north Because, because you're gonna wait three hours.

You're gonna wait Two hours to, I I've had, I've had the IX now a little more than a year and a half going on two years. I've taken it on one long trip. And it was miserable because every superpower charger on my EV America app, when I pull in, I'd find out either the supercharger's not working and it's gonna take me six hours to charge.

Or there was a line around the block with no rhyme or reason on who goes next unless, 'cause I live in Florida and someone could pull out a gun, they feel threatened. And, um, it, it was such a miserable experience that I only use my vehicle to scoot around town here. And I, you know, I have a charger in my, in my pri you know, my garage at my house, and I plug it in every night like my phone.

And it works great. 'cause I supposedly have a 380 mile range on, on this. I, which, and it's a big SUV, the ix.

But in John, you hit it on the head until we invest in the infrastructure where it's not so hard to charge on a road trip. I wouldn't, I take it up north. I don't even take it to the north of Florida.

I, you know, I Also wonder, um, maybe the, um, appeal or maybe the, the popularity of Tesla in this area, aside from the obvious that Corey mentioned about taxes. There is a lot of infrastructure available. If you go to any target, there are roads, 50 charging stations.

I mean, they're everywhere houses. My, my daughter, they, they have an But are they working? They do.

They do work. Um, they, some houses come with your own charging station. My, my son and daughter will houses Do.

Yes. We have it here. All the apartment buildings do.

Yeah. My experience though is that when you go to the Target or the Walmart, Sam's Club Hmm. To go charge your car, and it, and those chargers are advertised as superchargers, right?

There are DC current. Mm-Hmm. So in the case of my BMW, I could go from like 10 to 80% in 20 minutes on a DC charger.

But those are, there's more. They don't work. There's more and more of 'em.

There's always gonna be some that don't work. Uh, uh, and you, you talk about investing in it, in the Infrastructure Act, the Biden administration got seven and a half billion dollars to build out charging networks, but also deciding that they have the federal government's not the smartest way to, to allocate that money. 5 billion of the seven and a half billion is administered by the states.

And that has been really slow to go out, including some states that don't want to spend the money that they've been allocated because they're against electric vehicles. Uh, right here, right here, right here. So To, we're, we're getting there with that, uh, over time.

And, and I think, look, I think the, the range anxiety thing is a mental thing that I don't know America's ever get over. We always imagine we're gonna be rich, so we're against taxes on the rich, even though most of us aren't billionaires. And billionaires.

We always imagine we're gonna go on big long drives across the country, except that most of us don't go across big long drives in the country. Um, you know, we always imagine we're gonna have use a gun to protect us, not against someone in our house, but that's not the way guns usually get used. So we have this fantasy as Americans that apply across all these things that maybe keep us from our best interests.

Um, and what, as it relates to electric vehicles, uh, most people drive Alan, like you drive, like all of us drive every day, not big, long trips across country. Um, I hope we all get to million and take big long drives or Most, I drive, I drive across Florida often enough to go see relatives that, uh, as far as a new car is, which I'm in the market for, um, I'm gonna take the George Bush approach and say, I'm not gonna do it. Read read my lips.

I might. Okay. On that note, we're gonna take a break here.

We're a guy gonna go charge my car. We'll be back in a minute on text. com is the leading resource for news analysis and education on challenges facing the cybersecurity industry.

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And we're talking about, well, application security. Once again, there's been some issues involving Apple and some sort of flaw that, uh, according to reports at least, is been floating around for a decade. And of course now there's some issues about some fixes that were made to, uh, an open SSH server that runs on Linux systems that turns out that, well, there's a lot of, uh, updates that need to be made to that on a regular basis.

And it turns out well, they weren't made. So we have this kind of regression issue where things that we thought we fixed are now broken again. And I don't really care who the company involved is anymore.

I'm just kind of reaching a point where I think a lot of people are not far behind me. I'm basically fed up with all of this. Um, I think we need to get to the point now where we say, Hey, if a piece of software is more than three, maybe four years old, it was probably written by somebody who at best didn't understand the security issues and maybe at worst simply didn't care.

And maybe we should put a label on all that software that that's that old and we should come up with a list and on our, in our enterprises, and he maybe in our personal life and say, Hey, if this stuff is old, get rid of it. It kind of stinks. Like the milk in the fridge that you left for the last two months and didn't actually look at it.

And, you know, and poison you we're kind of at that point, I feel where, oh, this is kind of becoming a disgrace and we need to rethink the whole approach here and put some more pressure on software vendors and say, Hey, this can't stand. So is this, is this your network moment where you're gonna stick your head out the Frigidaire of leak glass and scream, I'm fed up. Dammit, I'm not gonna take it anymore.

Yeah. And I think there's a lot of people who are gonna throw open their windows and yell back, Okay, well look, you know, I I I've been in security 25 plus years. We didn't call it cyber that we called it security or InfoSec.

And this is a known, you know, software, software, it, it, this, we don't know about vulnerabilities till we know about them, right? Otherwise, 'cause no one purposely builds vulnerabilities into software. I don't care what you say.

Well, unless you're getting paid by the most sold or someone to build it, you know, a backdoor or something. But, um, the fact of the matter is, you know, the Apple fanboys are aghast. How can we have a vulnerability in an Apple operating system that's 10 years old?

Of course you can. It's just, you know, until it's discovered, you don't know. But this is a real, this Coca Pots is a real vulnerability.

And just like we've seen in Intel architectures and Microsoft operating systems and every other one, Apple's just as guilty, we, you know, we used to grow, have this fallacy that open source software was more secure than commercial software because there were a million set of eyes on it and the code was available to anyone to suspect, everyone to inspect. And you know what? Bull crap, we found out that open source software is just as insecure, if not more insecure than commercial software, all software, right?

And we try, we try to, we've shifted left on AppSec where we're testing this software more before it's released. I think the important thing you gotta remember is this, yes, we get these stories. Yes, the media, including me and Mike and John and Corey, and we all love to jump on, know the latest biggest next log four J, then the la the next, uh, uh, the next big open source one, the next SolarWinds and, and what have you.

But the fact of the matter is, software on the whole is more secure today. The software we're producing today is more secure than it's ever been. There's more, there's more eyes looking at it.

There's more probing, there's more fuzzing, there's more all of these things. But overall, the software, today's better. Now you get something like open SSH here's a perfect example of the open source software.

This has been out there, this, this vulnerability existed. And, and the problem is open SSH is built into almost all of the Linux distros. And it's the way you communicate in.

And so when you've got critical vulnerability at a critical place, right? It's, it's, it's kind of a, a perfect storm of situation. I think new software, I'll agree with you, is more secure because we've been thinking about it better and it's never gonna be perfect.

But honestly, you know, how often have we heard Microsoft and Apple and all these companies go, yes, we're gonna take security more seriously and we're gonna go back in and look at all our old code and make sure it's secure. And this stuff keeps popping up and up. And So this reminds me though, of the people who blame, blame Anthony Fauci for saying masks.

We should wear a mask that we shouldn't states. We didn't really have to stay safe or ventilators kill people, or that ventilators kill people, hospitals kill people. Yeah.

I mean, you know, the whole point of science is it, it's never done. All we can give you is what we know right now. This is the best of for what we know right now.

Five years ago we were saying our software was more secure than the software we built five years before that. Right? I think we need to do better than that.

We need to look to the airline industry, which, you know, for years and years had issues. Please Don't, there don't, my friend Chris Roberts took over the plane from his seat on a Linux box. This is true.

But on the whole, you don't see planes crashing at there was a rate that you saw them crashing in the sixties, sixties and seventies, because the industry sat out and said, yes, it's an engineering problem. And they put in the proper procedures and, and practices to improve the situation. We're not doing that.

Honestly. I think all these CEOs of these tech companies should be hauled up in front of Congress and asked to say, what the hell are you doing? And when you hauled up before Congress and say, we're, we'll be looking into, we'll get back to you.

Well, that's true. But at least you know, pressure, it becomes something that people understand and look at it. Yeah, you're absolutely right.

Yeah. Let Congress, we're about to go through fix it because Congress fixes everything. Everything.

Exactly. Versus I think when CEOs get called up, the, the pressure and the spotlight increases in behavior gets better. I think what um, we're gonna see though is a, is a big, uh, uh, refresh of OSS across the board because of the new innovations we're seeing in semiconductors.

And, uh, because we're gonna see entirely new types of, uh, CPUs on machines and in phones, uh, that employ deploy ai. We're gonna see a big refresh in the OS as well. And it's gonna go one of two ways, right?

It's gonna have a lot, lot of new holes in it, or it's gonna, uh, uh, have the opposite where it's gonna take into an understanding of what most recent exploits look like and design around those. I'll, I'll give you for instance, right in the AppSec real, you look at the OWA top 10, which has been around now 20 or 25 years. Yeah, It hasn't changed a lot though last year there was some movement, but for instance, we see a lot less buffer overflows than we used to because a buffer overflow used to be one of the main vectors in right?

The old buffer overflow. And we, we've managed to engineer those out for the most part. You don't see that anymore.

Um, the, the invention of the waf, the web application firewall and the, you know, proliferation of it really made a big difference in AppSec attacks on, on web apps. But then what happened is you now have 70% of the traffic on the internet is actually API driven traffic. And a lot of that API traffic flies under the radar of the waf.

So it made the WAFs almost out obsolete, right? Because now we need API, uh, security AppSec and, and the, the industry is responding to this. Um, but you mentioned buffer overflow, like that's, that specifically with ai, buffer overflow is an, is an old risk that went away.

That's now back because buffer overflow, uh, of, of managing large amounts of data that suddenly change across a network are necessary, um, expansions of, of flow of data for AI models that now don't look so strange. And, and, and so, and, and you've got AI tools to write cyber attacks that can take advantage of that. So it, it, it's, everything old is new again, It's the way you use, I'm gonna go real simple on this.

Essentially what we're doing today is for every $10 of software we're deploying, we're deploying $2 worth of security to make sure it runs. That's crazy. I mean, we're overspending on security to compensate for and engineer On.

Yeah, I mean, uh, it's true that, that, so when you look across all sectors, tech companies spend more on cybersecurity than anybody else. So, uh, tech is a, is usually about 20% of their IT budgets. Finance companies are 15%.

Retail are usually below 10%. Um, and so, you know, it it, you make a fair point that if it was stuff was designed better, maybe they wouldn't have to spend so much to fix in the backend. Yeah, God bless the security people for helping us with all this, but fundamentally, I think even they would say, let's go fix the real problem.

So what is the real problem? The real problem is a lot of guys were writing, women were writing code without an appreciation for all the security issues. And that's why the top 10 doesn't change on your list because we're still seeing SQL injections.

We've known about that issue for what, 10, 15 years now. And the fact that it's still in the top 10 is crazy. Essentially we gotta go retrain the developers and then we gotta go rewrite all the software.

There's just no way around this. And everybody's gonna say it's too costly, but I'm telling you, the cost of the breaches is now exceeding the cost of the fix. I don't know if I buy into that.

I don't know if I agree with that equation. First of all, I think the, let's not, let's not make the developers villains here, right? Developers develop code.

They're not security professionals. But I've never met one developer who raises their hand and says, you know what? I take pride in developing really crappy code.

I like to develop something that has a good sequel injection backdoor in it because it gives me a little thrill. No. Every developer tries to develop to the best of their ability.

Quality code and quality is synonymous with security here. com, blame Vard, don't blame me. Okay?

I know you guys are working really hard and you try your best to develop quality Code. Alright? How, how about this, how about the developer's?

Bosses are jerks 'cause they make em develop stuff faster instead of better. It's their fault, right? There go when You're being pressing, when there's cutbacks in technology and they're cutbacks in their employees and the guy three desks down got fired 'cause he wasn't writing as much code as you are the newer pressured to write faster code, not better code, get it out the door, fix it later.

And I know developers are some of that person. And to be, and to be clear, we're not blaming the individual developers. It is to your point, a function time.

It's a function. How do you hate drive back in the day? Because that's what they had, but they didn't know enough.

And now we're sitting here going, oh, well we have all this software as it is and we can't afford to go back and fix it. And I'm like, either replace it or fix it because this nonsense where we say, oh yes, we reviewed all the software and determined to the best of our ability that it runs securely and then we get this Apple event. It's just crazy.

Yeah. But the Apple event is an old, that's an old vulnerability that's been there for 10 years, right? And, but we run into this almost weekly now.

Somebody's reporting some sort of vulnerability that is really Old. So what do we do like to Florida where we knock down our houses every 20, 30 years to build a new one and everything's plastic. I don't, well, I don't think code will be plastic, but code to your point is better now than it's ever been.

We just need to be more aggressive about replacing the old code. Fair enough. Guys looking at my clock.

We are about outta time here on this Monday of, of, uh, edition of Text Gang. Very interesting discussion today. Corey, thank you for coming on as always.

You, you bring a, a, a real light here with some real financial common sense and, and common sense all around. So look forward to having you on again soon. John, as always.

Thank you. Great, great big stuff today. Keep writing what you're writing.

People are really enjoying it. Mike Ard, enjoy Lake Placid. If you, if you meet, what was the name speed skater from Lake Pass Placid.

Was it Eric? Not Eric. Eric.

Remember told him I said hi. Oh, is that also Eddie The Eagle? The, the, uh, British.

He was British. You're right, right. Um, anyway, hey, have a great day.

Enjoy the rest of Tech Drug tv. We have a full day behind this. Hope to see you tomorrow.

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