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The Cyber Why: What We Read This Week...
... and why you should too! (1/27/2023)
I had a meeting with a very close friend this week. He said to me “I love what you are doing with The Cyber Why. It has such a unique voice and personality.” I’m not sure if he meant that I write like a middle schooler with an attitude problem or that I provide real and interesting commentary on cool technology topics and trends. I’m going to just assume it’s the later. Just to be sure, I asked ChatGPT to write me something snarky about The Cyber Why to compare against my own tone of voice. Here’s what it came up with…
Sounds a lot like something I would say. Technology is indeed taking over our lives and the robots will replace us all some day! I guess ChatGPT really is that smart. Now on to this weeks Cyber Why! Enjoy….
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Microsoft’s security arm is now a $20B per year business (Yahoo.com - Rick Pick)
Microsoft (MSFT) has been making headlines - from terminating 10,000 employees to its multibillion-dollar ChatGPT investment. It's earnings report season, and MSFT has lowered its guidance due to macroeconomic conditions. One bright spot in the earnings report was MSFT's cybersecurity business. MSFT now has a $20 billion cybersecurity business, which has DOUBLED since 2021. Every CISO I speak to asks about MSFT's offerings, in particular Azure Sentinel SIEM. These security leaders may not be ready to go all in, but they are getting pressure from their CFOs and leadership. It can be hard to argue for alternatives when capabilities are baked into your existing MSFT licensing, especially in a down economy. Software is eating the world, and MSFT is taking a bite out of its competitors' business.
Global Cybersecurity Outlook 2023 (World Economic Forum)
The world economic forum met this past week in Davos Switzerland, drawing guests and speakers from ivory towers, financial powerhouses, government organizations, and even high tech Zombiecorns. The topics included sustainable health, global inflation, war in the Ukraine and even our favorite topic - cybersecurity. I skimmed the 35+ page report and while the content looks amazing, what I want to know is exactly when did we start designing all of our graphs vertically. It’s so damn confusing and reads like an infographic instead of real data to be consumed. Check out the report to see what I mean!
FBI Confirms Lazarus Group Cyber Actors Responsible for Harmony's Horizon Bridge Currency Theft. (FBI.GOV - Rick Pick)
For those who don't closely monitor North Korean cyber attacks, you might be most familiar with the 2014 Sony Pictures intrusion motivated by James Franco's *phenomenal* film "The Interview." You may not know North Korea has industrialized cyber attacks against financial institutions and cryptocurrency companies to combat global sanctions and fund their regime. This week, the FBI attributed a $100M heist against Harmony's Horizon bridge to Lazarus Group, also known as APT 38. You might not be making money on your crypto portfolio, but the Lazarus Group is! (Hat tip to Kurt Baumgartner for catching a fat finger on this one).
The Prodigal Return of San Francisco (Praying For Exits)
Yes, I did my time out in silicon valley. I arrived into the land of high tech giants in 1997. I rented a shitty little apartment directly across the street from Apple HQ. I could see 1 Infinite Loop on my daily 10 minute walk to my startup. I struck it rich and I lost it all in the span of fours years in the bay area. I left in 2001 as the valley was crumbling around me. However, the one thing that can be said about the high tech hub of the universe is never count it out. Don’t ever predict that it will die. Don’t believe that we won’t see amazing growth there again. I made that mistake 20+ years ago.. I won’t do it again.
Herman Miller Chairs - A Leading Indicator of Technology Company Demise (@giladrom Twitter)
Oh no! The last time I saw rooms full of used Herman Miller chairs was in 2001. As the dot BOMB was exploding there were literally thousands of these super over priced chairs sitting around to be purchased for pennies on the dollar. This is the first sign of the technology apocalypse. Get your chairs while they are still available - they really are amazingly comfortable!
Value accrual in the modern AI stack (Data-driven VC #19: )
This article is all you need to know about modern AI and the potential value stack that exists. This phenomenal piece dives into how AI is “driving the cost of content creation down to zero just as the Internet brought the marginal cost of distribution down to zero.” Think about that for a second… The Internet was the most important transformation of technology and business in the last hundred years. The author (and I) believe that the potential of AI is on that level of magnitude.
When it comes to AI, some people think that the model is the product. It’s not. It’s really just a fundamental shift and enabling product that allows other new products to exist. Just like the Internet once was. The real impact to society will be when entrepreneurs learn how to make solutions built on the AI fundamentals that people actually want to use. When that happens there will be no stopping the AI onslaught.
Marines fooled a DARPA robot by hiding in a cardboard box while giggling and pretending to be trees (Yahoo.com - Rick Pick)
Speaking of AI, think tanker Paul Scharre has an interesting upcoming book titled "Four Battlegrounds: Power in the Age of Artificial Intelligence," where he writes about taking advantage of a DARPA robot's artificial intelligence. A group of Marines found creative ways to approach the robot undetected. "Two of the Marines did somersaults for 300 meters. Two more hid under a cardboard box, giggling the entire time. Another took branches from a fir tree and walked along, grinning from ear to ear while pretending to be a tree, according to sources from Scharre's book." ChatGPT has made AI "cooler" than ever, but at the end of the day, AI is a technology, and it will be hacked and abused. Honestly, I'm surprised that the Marines didn't use crayons to try and fool the AI, Semper Fidelis Devil Dogs.
Higher Rates Will Lead to the Next Generation of Great Tech Startups (Chamath Palihapitiya)
I have to admit it, I’m a total “fanboi” of Chamath Palihapitiya. While I wasn’t sure of his SPAC activities, I think this piece is an absolutely must read by anyone who invests their time or capital into high growth companies. Understanding the macro trends in technology, business, and economics is required if you want to have outside returns. Chamath defines this perfectly in this piece. I invest on what I call “tectonic shifts in technology”. This article gave me a number of additional ideas on how to approach my investing thesis. MUST READ!
If you’ve made it this far you either found my musings at least semi-entertaining OR you enjoy pain and kept going regardless. No matter how you made it to this point, you should know that I appreciate you. Please do me a solid and share The Cyber Why with your friends. I would love to reach a bigger audience and referrals is how I’ll do it. Help me out and I’ll see you next week!