Big Changes In AI Regulations And Cyber Security

Foreign welcome to around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by LeadSmart Technologies. Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents and the global wholesale supply chain. Whether It's M&A SaaS and cloud computing, B2B, E commerce or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most.

Hey. Hey. Hey.

Good morning.

I forgot to dance.

I didn't miss it.

You didn't?

I didn't miss it. No.

That might be the first time this year that, you know, I was in my mind, I was excited listening to my, my tune there but I missed the dancing kind of getting my notes and stuff ready. So how are you my friend?

Doing good. We're guest list today. I feel like a bit of a empty nester type of thing here, you know.

Yeah, that's, isn't that funny?

I was thinking about that earlier.

Although I got a commitment this morning from a guest I've been working on for quite some time for early December. So I think when I looked at the calendar we're, we only have like six left this year because we got the day after Thanksgiving and then I think Christmas and New Year's fall around a weekend so we probably will skip those. So got a lot to accomplish here before the, the new year comes. But, but good stuff. I think what's exciting, I'm looking forward to maybe seeing from some folks that are logged in with us and, and where they might be coming in from today. But just you know, our LinkedIn audience is growing all the time. I think we're probably up to oh, 250, 300 people, pretty consistent coming in. When I look at kind of the, unfortunately LinkedIn doesn't give us good statistics but, but in listening to people talk and people that they've shared things with were great there. But what I'm excited about is just on the LinkedIn LinkedIn audience today I think we've got, where are we at? Brazil I think Mexico, Canada, the Netherlands, Turkey, Germany I think so like five, six countries with us today on LinkedIn don't know about YouTube, Facebook and then the podcast now around the Horn podcast on all the popular formats is, is hitting about six or eight countries every week. So things are coming along. We're excited and appreciate everybody's support.

Yeah, absolutely.

It's good, good timing. So before we dive in today, Tom, my good friend. So let's dive in and do A little bit of our housekeeping that we try and do each week. And so I'm Kevin Brown and this is my lifelong friend and business partner and co host of the podcast Tom Burton. And we get together every Friday on, as I mentioned earlier, LinkedIn Live, YouTube Live, Facebook Live. And we talk about the happenings in the world, the economy, mergers and acquisitions, sales, technology, artificial intelligence. We try and be a place where folks involved in manufacturing, wholesale distribution can come and get kind of a recap on what's happened in the week. We put out a newsletter every Friday morning as well. It is called around the Horn and Wholesale Distribution. If you do not get that and you would like to, we would be more than happy to send that to you. You can either send us a note directly at hello, eadsmartech.com or you can go to the aroundthehornpod.com website and sign up for it there. And so we do this every Friday. If you don't get that newsletter and you'd like to, please let us know. We'd be happy to share that with you. Just as a little caveat, some of you will be listening to this later in the day versus the live broadcast that we're doing. You might be listening on Apple podcasts or Spotify or Amazon or Odyssey or wherever it might be. If you're listening, you're not seeing the screen, which you're unfortunately not able to see these two handsome faces. But what we'll be looking at is that newsletter. So look at that newsletter. We'll talk about the articles in there. So again, if you're listening in and not seeing us, that's what we're referencing. You could certainly look those articles up yourself or ask us for a copy of the newsletter. So, Tom, what did I miss there?

Nothing. But Ron set the bar for us here today. He says he's good to be here for another incredible session. So we better, we better deliver here.

So RP better throw out some great comments.

That's right.

You know, the one thing I will, before we dive in, the one thing I will ask people, and I'm going to do this unabashedly more and more because I haven't done enough of it, is we've developed a great audience and great friends and been getting some phenomenal guests joining us. But the way this gets out to more is if you share it with your friends. And so you can follow us at Lead smart technologies on LinkedIn, same lead smart technologies on YouTube or Facebook. Just hit that Follow like or subscribe button and you'll get notified each week when we're going live. The other thing you can obviously do that's very beneficial to help this word get out about what we're doing is if you're listening on the podcast on Odyssey or Spotify or Apple, just hit that subscribe button and the like button. So you'll get notifications each time we update. And be wonderful if you'd leave us a review. So we thank you for all of that. And now I guess we can dive into the news, huh?

Yeah, let's do it.

Good. So, you know, we kind of gotten in the habit and I think I dropped this on. I said we usually start off with some dynamic of what's going on regarding economic news here in the US where we're at and the much of the world tends to follow our economic situation as well. So we have an article from Reuters this week about, you know, some of the discussion about what's going on with, you know, what, the Q3 looked really good in a lot of fashion, but then there's still some data out there talking about slowdown. And, you know, one of the things that intrigued me about this article, Tom, is you almost had three different perspectives from three different, you know, governors of the Fed. You know, I mean, to me, it's like, come on, speak from one voice.

Well, I don't think there is one voice. I think that's the issue. Yeah, right. I think there's a lot of different voices with a lot of potentially different opinions. Maybe that's what it's supposed to be.

It could be, I guess. Yeah. I hadn't thought of it that way.

But, yeah, I don't, I, I certainly don't believe that there's, you know, from what we've seen and what we've heard, that there's a clear, you know, defined absolute strategy. Right. And the way that that's getting kind of ends up getting said as well. We're going to, you know, we'll watch the data. We'll watch the data as it goes along. But no, I don't think there's a clear strategy and I think different opinions and different ideas from the different, you know, different governors.

Well, you know, just triggered for me with that is it makes me, I think what, what's going on especially it's like Jerome Powell seems like a great guy, but, man, it just seems I listen to him talk sometimes and it's almost like, I don't want to say talking in circles, but it makes me think of the, you know, the sign you sometimes See, in a restaurant, right, we reserve the right to refuse service. It's like we reserve the right to raise rates. We reserve the right to raise rates. We reserve the right to raise rates. And it's just this whole thing and it's what's, and I'm far from an economist, but it just, it kind of makes me wonder is, is that 2% the right number? Right. When you see all the different impacts of, I mean, we, we live one of these days. I've said this kind of stuff before, but I need to go research this. But you know, I just kind of look at. We live in such a different world, right. We're going to talk a little bit more about AI today and the things that are changing. You know, the 2% piece that's in there. We weren't doing electronic trading or automated trading. We weren't the, the world economy was different. Right. We didn't have the Internet. We didn't have, you know, the global supply chain the way it is today. So I just kind of started to wonder, you know, there was an article in here from the woman from the Dallas Fed president. You know, she commented that despite some progress, inflation is trending toward 3% rather than the goal of 2%. You know, we saw those unemployment rates up last week. You know, one of the things we didn't talk about in that article that I thought about afterwards, then I heard it on the news the next day was, you know, I'm interested to see what November unemployment numbers are going to look like because we had the auto strike and we had the writers and the actors strike still going on. So I, it'll be interesting to see if those strikes impacted that unemployment number or what it looks like in November. But I'm kind of wondering if there's a number somewhere different than that 2%.

You know, I'm not an economist either, but I think there's a lot of. You have to understand that just arbitrarily saying we're going to go for a, from a 2% to a 3% target has a lot of ramifications.

Oh yeah, no, I wasn't suggesting. It's just a swipe of a pin.

So, you know, I'm sure there. And I don't know the exact logic of the 2% versus the 3%, but if you look at inflation over time and how prices increases and so forth, I'm sure there is a method to the madness on that. I think though, in that article, as it points out. Right. Is that, yeah, there was a blowout, but if you start to look again, if you start to peel the onion a bit. And this is sort of some things I've been saying, at least in the consumer world. The consumer world is there's, there's potentially some issues and. Oh, yeah, and there was an interesting statistic I heard the other day, I think it was on CNBC where they did a survey and they said 67% of the people they surveyed were concerned about their finance related to holiday shopping and were planning to spend less.

Oh, it's got to be higher, right?

67. Yeah.

No, I, I think it's. I think if you got to look at. I bet it's higher. I mean, I understand that was a survey, I bet, right. I bet that actual number is higher.

Well, I can't imagine, but it seems very high to me. Right?

It does.

If you have people that are like, you know, looking at their Christmas or their holiday shopping and going, hey, I'm going to have to cut back. And again, you start peeling the onion. Credit card debt and all those other things. So now I understand that's a consumer world, but we are driven by consumers, right? Our economy is driven by consumers at a macro level. So, you know, again, I think there's a lot of conflicting data that we keep seeing. We'll have to see how the next couple, I think the next two to three months are really going to tell the story, and I think the holiday season is really going to tell a big story on that.

Well, I think, you know, there's a couple of things that can happen out of that.

Right.

With what you're describing, and I hadn't really addressed or thought about this, but the reality, I think is one of two things happens is one, people spend dramatically less and then we have the impact of that. And I'm going to throw a number out and say unless you're probably in the two or two and a half percent of the economy from an earner standpoint, you're probably going to be spending less. You know, there are people who, you know, their mortgage is perfectly set at, you know, 2.9%, and they're, they've been in the same job for tons and tons of years and, you know, the price of eggs going up by a dollar a dozen doesn't impact them dramatically, but I think, you know, the average person out there does that likely have some impact to them in that setting. So I think a couple of things happen, right? Is the. Either spending goes way down or to your point earlier, right. Consumer debt goes through the roof even more than it is right now. And with the interest rates where they are, I don't think that's sustainable.

No, it's not sustainable. And you add in again, a lot of people who, I know a lot of people got 30 year mortgages and locked in, but a lot of people also got, you know, five ones where they, you have the teaser rates. And yeah, there's just, there's a lot of things that haven't percolated through the system.

Yeah.

That I think are starting to percolate and I think that's gonna, in the, you know, between now and maybe the end of Q1, I think we're going to have a much more better visibility on what's happening there.

But yeah, I think, I think you're, you're right with that. I was listening to another podcast earlier in the week and you know, one of the topics that they had now that the other side of this is that the four people on that podcast, I think all but one of them are billionaires, but they were talking about the impact of consumer debt that says if it gets too much further out of hand that the government's going to step in and do something. It's like, okay, so wait a minute now. If you look at it and you say, okay, we're driving rates up to balance the economy, cool the economy down, but it's really having this negative impact because people won't stop spending and the fact that they're not stopping spending is, is what's showing the driving up of the economy. We're in this infinite loop of frustration that then there's that risk that the government comes in and has some impact on, on the, the credit that's going on, the credit being driven up out there. So it's a weird thing happening.

Yeah, it's, it's.

Well, the, the one ray of sunshine I saw out of that article was that one of the comments from one of the, the board of governors was that you, you know, they said endorsements for higher rates have become rarer and rarer among all Fed officials since July. So I think that, you know, yeah.

I actually personally do not think we will have any more rate hikes, but I don't think it's because it's, I think the landing is going to be harder than. Everybody keeps talking about the no landing or the soft landing. So I personally, this is just my personal take because I don't think we'll have more rate hikes, but I. Do you believe the landing is going to be harder than what we've Been talking about. Yeah, but you know, again, hey, we all have our opinion, right?

No, I think, you know, I. Listen, that's exactly right. But, you know, the, you know, I don't think that this cycle that I was just describing is. Right. It's not sustainable. Right. Something has to give to balance things out. And I don't, obviously, I don't know what that is either in this setting, but it's. Life's not simple. And you start thinking about, you know, the, just even looking at those three strikes that were going on, right. What were those people doing? You know, only a portion of them were out driving Uber or doing something else. And what happened, I'm sure all of those credit cards went up and, and that becomes a challenge. Right. So in credits tightening in the same thing. So this, this should be an interesting time to watch. You know, it's interesting is we both follow the news pretty well. Let me rephrase that. You follow some news closely. I follow it broadly closely. It's probably a fair way to state it, but, you know, you can find plenty of people out there, the, you know, financial analysts and pundits that think that we're going to see some drops starting in Q2 and, and, or others that are saying later in the year. But I, I kind of leaning towards the idea that something's going to have to give in this cycle by the second quarter. What it is, I don't know. But something's going to have to adjust because, you know, multiple years of this is not going to, is not going to play out well.

No, agreed. All right.

All right. Well, I'm going to go get an economics degree between now and next week so I can start saying good idea. Yeah. So anyways, just another quick article in there about manufactured goods. Orders were up 3% in September, so that's positive. It's up six of the last seven months. So we're making more stuff in this country, which is a positive thing. It just goes back to. Right. Our audience here as manufacturers and wholesale distributors is who we bend this are these conversations towards. And it just goes back to all of the guests that we've talked to over the course of this year. Everybody in all of the events and shows and conferences we've been at is while people might be looking a little cautiously at things moving forward, their businesses are strong. Right. And so that's the one good thing we could take away out of today.

All right. Should we move on to more AI? In fact, maybe we should ask AI what the economy is going to do and where we're going to be. That's probably the most accurate answer we're going to get.

Which model will you use to ask it? That has most. Most.

Well, we can look at different models. We can try different models and kind of balance everything out.

Where are we at with chat? GPT4 is up to 20, 22. Is that right? April.

April of 23. April of 23.

Oh, it is. I thought it was still 22. Okay, April 20th. So that's, that's reasonable to kind of start taking a look at then.

Yeah, but it's also, if you, again, if you. It's now with the new release, if you start doing things that you need, where it needs to go search the web because it doesn't have the data, it'll automatically go search the web using the Bing search engine and then bring back that data as well. So for all intents and purposes, it's for the most part up to date.

So that right there is a trigger for paying the 20 bucks a month.

Oh, 20 bucks a month is well worth it.

Yeah.

That's 20 bucks a month I ever. I spend, so.

Really?

Yeah, it's one of the best. Yeah, it's great.

Other than when you buy me a beer.

Pardon?

Other than when you buy me a beer. It's the best.

Yeah. 20 beer. Yeah, exactly.

Well, so like the, the Biden administration came out last week. We talked about a little bit. In fact, it was the end of the week before.

He tried it.

Mahesh was our guest last week up in Toronto and he tried to. Can't predict the future. Okay, well, there we go.

So that's why you come here to, to hear about the future. Can't get that on chat GPT.

That's right. Ask Mahesh. We, we should start a new, new. A new. A new show, separate show that just says Ask Mahesh and he'll have it for us. But so anyways, Biden administration came out with an executive order. Right. So it's not law. It's a baseline of things. But we didn't, we talked about the fact that it was out there and I've. I don't know how much time you've had to do much with it. I knew you're traveling this week, but I've taken a pretty close look at it. I started twice this week to start doing some writing. I wanted to write a lengthy post about kind of unpacking it a little bit. But it's quite interesting as you start to take a look at it. Right. You've got all that's going on in the EU, right then the G7 is starting to have some discussions about this. And then right in the time that there's a big event with a lot of tech companies in England talking with the British government in London, you've got that going on in the Biden administration comes out with this piece. And then a few days later we come to find out that the real person behind the scenes that was driving all of this was former President Obama. It's pretty astounding if you look at this because we've got, it's 111 pages. It's astounding to me the, the amount of data that they've put in there. And it's, it's super specific and super detailed, but it's, it's kind of weird. You know, it almost, there's pieces of it. I want to be cautious here how I say this, but there's pieces of it that almost look like it's, it's partisan in some ways. You know, there's a whole section in there about diversity and inclusion. You know, now there's a piece in there about the V1B or whatever it is, visas. But then there's also big pieces in there about that foreign, foreign, foreign born people can't have access to a certain amount of data. That's a defense issue. They've got, I think, 28 different departments within the U.S. government that they name that are supposed to have a chief AI Officer. I mean, it's just the deeper you dive the, It's, I don't want to say scary, but it's, it's quite interesting. I don't know. What are your thoughts on what you've. It's kind of like a kitchen sink type thing.

Yeah, it's, yeah, the, the one about the, you know, who has access to data. Right. Whether you're foreign or whatever. Yeah, we all, you know, anyway, that's just. But I think that's a little absurd.

Actually when you unpack that part of it. Right.

But I think a couple things. First of all, this is not legislation. This is an executive order. So this is not law. This could be overturned by the next president or anybody in a heartbeat. So it's more of, like I said, we talked about it last week, it's more of a advice and direction than it is.

I think it's stronger, I think it's stronger than that because it's something that it's today in the U.S. this, I disagree with you a little bit on this. Time in the U.S. this is something that now is upset by the executive order. You're correct, it's not a law. But now this is something that you could be sued for as the baseline standard in the U.S. right. Because the government has put this out. Congress is look, going to look at it, but it is the seal of the state, the U.S. government. That's right on the top of it. So I think if you want to start playing in the world of the, the lawyers, that now there's a baseline for people to kind of look at, to base things against. So while you're right, it's not a law, it is, it is their first pass that says this is what we expect.

Okay, no, that's fair enough. But it's the other thing that I, that really that. And I've had a chance to read it more and go through it more. And this is. I touched on this a week ago when we talked about this. Right. It focuses on all these systems and methods like, you know, and it looks at how the AI works today or how it works, and it doesn't focus at all on what is the outcome or the result of AI.

Right.

The protection that we're trying to create is how do we create or how do we do things to avoid undesirable outcomes and undesirable results. But we don't talk about that. We talked about systems and methods. A lot of things in there are systems and methods and approaches that are probably going to be out of date in a month anyway or two months or.

That's the trigger, right? That's the trigger that makes this so important. Right. Is you're trying to say we want to look behind the kimono, so to speak, in your business and government wants you, depending on the size of your business and the size of your model, to come and disclose all of these things behind the curtain, which technology companies have never done. Right. And I heard a great analogy with this earlier in the week. A gentleman in the tech world said he made the comparison. He said they're looking at systems and processes and want to regulate and dictate that as opposed to outcomes. And the example that. Go ahead.

I'm sorry, no, that's what I just said.

Yeah, no, exactly. Right. The reason I reiterated is because he used a great example to your point is he said, look, it's like saying you can't commit fraud, but outlining all of the legislative groups at the government level and at the state level that are going to regulate you not committing fraud and then show you all of the reasons that you have to show the government why you might commit fraud instead of just saying thou shall not commit fraud to the damage of these things and then put some parameters around that. They went back and, and wrote 111 pages about the details of how you.

Might commit fraud, of the systems and methods of committing fraud. And again, there's a lot. The systems and methods that are in use today are not the same systems and methods that are going to be used in six months or even three months.

Yeah.

I mean with everything changing and evolving. Right, right. Is that to your point? I think is. Is critical from the standpoint. It really, it almost looks like, you know, we use sometimes the term in our business. We kind of use the term guardrails regularly and then guardrails need to be put in place that can be modified and changed. You know, and it's interesting right now because I mean this make. I'm going to throw this out. You can throw rocks at it if you disagree. This might be one of the few things ever that globally needs to be agreed upon because of the ramifications and the impact that it has on the world order, the economies, science and medicine. The impact is, you know, what's, what's the number some people have used, you know, 10 times or 100 times more impactful on humanity than the Internet and other people put it, put where AI is headed to be as valuable to mankind as fire being invented. Right. You hear these types of things. You know, I kind of start looking at it is, well, is the UN functional or dysfunctional? Too dysfunctional not to be able to do something like this. Is it the G7 that's going to set some standards and then other countries fall something more globally than just the Biden administration saying here's 111 pages is going to need to come out of this?

Well, no, I complete again, if you take a step back and you look at what you're trying to accomplish, which is you're trying to accomplish putting guardrails or I'll just go so far as legislation in place that is going to avoid the undesirable outcomes that we don't want from doing this. Right. The potentially undesirable outcomes and results. That is not a, that's not a national related issue. That is a international issue. So we can have all the guardrails in the or legislation in the world.

It's a human rights issue. Right.

It's a human race issue. It's China, India, all of those other places and we. And engineering and innovation nowadays is not a just inside your border it's type of thing. The projects that we do and the things that we do. I mean, you just start to look at this and go, you know, a lot of companies and we've done it right. As you use offshore resources for engineering. Well, are those, you know, who's like, it's like it just gets, starts to get really, really weird very, very quickly and unworkable. So as I said last week, I think it was a way to kind of show, look, we're doing something about this and. But is it a practical thing and, you know, is it easing something? Yeah. Could the lawyers rally around this? Potentially, maybe. But there's so many ways around the systems and methods that they're talking about that I don't know, it just, it seems very impractical to me. The article gave it a B minus. I gave it more of a. I give it more of a D plus, not a B minus for, for that. So.

No, I, I would agree. And it's interesting. That particular article is from cio, a chief information officer magazine, and there's some nice points in there as well, but it was, it didn't address the depth of it. And you know, part of it is, if you start thinking about it, you know, this could very quickly be no different than, you know, chip manufacturing in China versus, you know, the rest of the world or software development in India and so forth. And the things that are happening, you know, in that, in these pockets that are good for that unique country. And you know, one of the issues here is I think there's some, what do you call it, there's some things that can hamper, right, what happens in the US that come out of this, right. This could become, if it, if it stayed in place or became law. Right. Now, to your point earlier, right, is there is a possibility that a year from this month there's a new administration or taking place in January of 25 that could completely wipe this out? If it's still an executive order, that can change dramatically by administrations. But the other side of this is the way it sits now is if there's more openness and more flexibility and guardrails versus you will and thou must and so forth in what comes in, say India or China or other developing countries that are doing things, or even across the eu, the US could be looking, you know, ahead at all of those other countries that are making better and faster and stronger advancements that are being done here.

Of course. No, it just potentially stifles innovation.

Yeah.

For again, we Kind of hit on this last week, right. And it causes potentially people to go, whoa, wait a minute, I got to slow down, I got to think twice. I got to. And, and even companies not to move forward. So there's a lot.

I want to open my company in.

The U.S. right, exactly.

You know, you look, you look at, you know, all the, all of the technology companies that went to Ireland when Ireland started offering all of the tax breaks and land for server farms and things like that, right? It's. Somebody may pop up here all of a sudden, you know, Kazakhstan might say, hey, you know, no taxes. And we have lot of flexibility with what you do with AI. So this is a, this is a pretty substantial issue that needs to be watched.

And I think Ron's comment, other than the part about you being right, is.

This RP is just showing wisdom there.

No, so he's, you know, I think, right, we're in a global supply chain and it's getting, you know, closer and closer, as he says every day. And AI is making it more visible. But even in our innovation, right, Whether it's a supply chain or innovation or engineering, we're in a global world. And so yeah, it's not like we're just doing things siloed in our countries or our respective regions. Y. I do agree that yes, something for this to ever have any practical application, any sort of legislation to have any practical application has got to be looked at and have some consistency internationally. Otherwise it just, it is not going to accomplish the purpose and it's going to cause more harm in some ways than it is good.

Totally, totally on board with that in, you know, wisdom you see, especially in that first segment of what RP wrote is great. But you know, do you remember the book, I think it was Tom Friedman book the World is Flat. You know, that was. I just looked it up real quick on Google. Not, not on chat GPT but 2005. Right. So we're 18 plus years since that book came out and look at what happened of, you know, that that book talks about supply chains changing and you know, we're all interconnected and so forth and you know, obviously earlier, earlier times of the Internet taking advantage of that and this, the what's going on in AI. I think way beyond what we probably even realize or recognize is that the global impact that it's going to have is going to. Our piece point is just going to make the world that much closer. Right? That much closer. And you start thinking about, I was doing something on Chat GPT the other day. I Can't even remember what it was, but it was something I wanted to, to share with you and. Oh, you're talking. It was something related to the cert, you know, service levels and supporting the customers at Lead Smart. And I was looking up some things to trigger some ideas and, you know, with a click of a button, I took my AI searches. Right. That I had refined to get to a place I wanted to start talking about. Clicked one button and typed in your name and it sent it to you. And now we were collaborating. You know, now we're only three plus hours apart, but we could be, you know, seven time zones apart and collaborating live across an AI tool to do great things.

Sure.

Or nefarious things. So. All right, well, good discussion. This is something I think we're going to need to keep a pretty close eye on. And you know, I did a LinkedIn post this morning that one of the things we're trying to do here is, you know, kind of be a resource for people in wholesale distribution and manufacturing to kind of help unpack, unravel distill some of these issues that are going on. And so we're going to keep trying to do that every week. So I'm going to interject. We're a little more than halfway through this morning with the reminder that we're live. It's Friday morning, November 10, 9:32, almost 9:33 Pacific time, where Tom and I both live. We're live on YouTube Live, Facebook Live, and LinkedIn Live. If you're watching us there, you're seeing the screen which is showing these articles that we're discussing from the around the Horn and wholesale distribution newsletter. If you are listening and not watching, which the larger, far larger part of our audience is doing, then you are not seeing that newsletter that we're discussing. We try and mention those articles and where they came from. But if you would like to get that newsletter, just reach out to us. You can let us know by emailing us@helloadsmartech.com and that comes in and we'll get you signed up or faster, simpler, more immediate is go to www.aroundthehornpod.com. all of our previous recorded podcasts are there available for you and you can sign up for the newsletter there. So always like to plug that in so that people aren't confused that are listening versus watching. So the next article, Tom, why don't you take it away from there on, on discussing that.

Yeah. So speaking of regulation and new models, Amazon. Yeah, and big models. Amazon is working on building a big Their own big large language model to compete with, well, Microsoft OpenAI and Alphabet.

Surprise, surprise.

Yeah, but it actually makes sense because what you're finding where Microsoft in particular is really starting to and if you look at their stock, I think it's all time high again today is really taking off is because it's fueling their Azure platform and their cloud platform.

Sure.

Obviously Azure and aws. AWS is Amazon's version of Azure, their cloud platform. So I think, you know, I know it's what it said in the article here is that Amazon is really making this investment in Olympus to then make their platform and incorporate it into their Azure platform, their cloud platform to make it even, you know, much more competitive than what's. Than what's what and what Microsoft's doing. What's interesting is, you know, I don't know, it'll be interesting to see a. What they do that is different or it will be different or how it will be different. Will it be tuned, if you want to call it that, fine tuned for more industry specific uses. These are all things that are to be determined. But yeah, we're going to looks like we're going to have another one.

Well, I think, yeah. To think this wasn't coming would be I think naive. Right. When you think about, I don't know what the differences or what the percentages are but I know Amazon Web Services or aws, their hosting platform, right. Where the vast majority of technology companies are hosting at is far greater from a market share standpoint than Microsoft's Azure. But Microsoft's obviously poking at that with what they're doing with their chat GPT investment and what they're doing with Copilot. I sure wish they would open Copilot up to smaller companies. If you can can make that happen that would be great Tom, but I'd love to play with that copilot that they've done. But this only makes sense. What's interesting to me though in this article, it references a couple of things that stood out to me that this talks about. Olympus is what it's code named, right. Is supposedly going to have 2 trillion parameters with it where open AI or chat GPT4 has 1 trillion parameters. So that's mind boggling to me. You're the AI AI guy from a technology standpoint here, describe a parameter, think.

Of it as a connection, right? So something that's related to each other. So you know again, if you have a sentence where I like cats, right that's my sentence that I want to do. Well there's a lot of different connections that could be made to all of those different words, cats and then that could be let connected to pet and that could be connected to types of, types of cats and all of those things. So every one of those connections is.

A parameter, is a data point. Is that a fair.

I don't know that I would, I would think of it more of a relationship or a relationship. Okay, yeah, it's more of a relationship. So the more relationships I can have in my model, in theory, the more intelligent it can be and the more breadth of intelligence and depth of intelligence that it can have. So you know, that would be doubling the number of parameters that it has in there, which. Okay, but you know, of course there's a lot more work going on to continue to increase the number of parameters that these different models have.

So, so maybe give us a little bit of scope, if you don't mind. And I probably, I don't mean to put you on the spot here, but, but I will. 2 trillion parameters versus 1 trillion parameters. Is that exponentially different or just double? I'm thinking of the richer scale.

Right, Yeah, I mean numbers wise it's, it's, it's double. But exponential value is. Your value is exponential.

Okay, great.

Because you're now able to go to an, think of it as going to another level and this is the difference, right? This is what makes, I think a, what is making AI more valuable than humans in terms of their ability to think. Right? We can go a certain breath and we can go a certain depth in our thinking, but at least in certain time frames, the more deeper that they are able to go with these models and the deeper the number of parameters and the number of relationships there allow them, allow to get answers faster and deeper in some of the things that are there. So it allows those prompts and allows the directives to be more sophisticated and more just intelligent, for lack of better word. Okay, so the value.

Bigger, better, faster, stronger, more valuable outputs.

But exponential value may not be exponential size, but it's actually exponential value based around what they're able to do.

Which is why I asked the question because I think that that really matters. Right? So I mean, you know, the average Joe that, okay, it's, you know, double going to be double what ChatGPT is now. My assumption would be right. As ChatGPT continues to grow, you know, they're going to be at 2 then 3, then 4, just as Olympus will grow and other models are going to grow with all those parameters as well. So all to the benefit Right. Of the users. But I think it is quite interesting because, you know, and I wish I had some data closer at my fingertips here, but you know, the. I think the average person that is listening in with our podcast would be astounded if they looked at the list of software products that they're familiar with. Household words almost to most people that are running on AWS or Amazon Web Services. Right. Which is the only thing I say, only thing. The first thing within Amazon's whole world to become profitable. Right. So I don't know the number of data centers around the world and it's not to slight Microsoft in any way. But from this whole standpoint, this was really where Microsoft or Amazon took the lead. And so I think this will be interesting. The last thing that I'll mention regarding this article is what I thought was kind of interesting and I'm a fan of. In fact, let me see what happens here. Alexa, who is Rohit Prasad? Rohit Prasad is a senior vice president and head scientist of Artificial General Intelligence at Amazon. Prasad joined Amazon in Alexa. Pause. So I don't know if you could hear that, but Rohit Prasad is the executive vice president at Amazon that's running this project that also was the guy behind Alexa. So kind of an interesting time.

Don't say Alexa again.

Correct. Yep. So Simon, our friend in the UK with Optimizely. Thank you for that. 125 data centers. Right. For Amazon. That's astounding and growing. It's happy hour. Simon. Cheers. These Simon's in the uk so in England. So glad to have him with us. A new, a new partner relationship that we're just getting ready to do the big announcement with Simon's company, Optimizely and their e commerce solutions that we're integrating in with Lead Smart. So going to have a webinar very shortly with Simon and one of our other partners to be announced very soon. So let's kind of jump ahead from a time standpoint right now. Ace Hardware struggles after a malicious cyber attack. This is a big deal. You and I were talking earlier today about how moving everything to the cloud can greatly reduce the risk of these things. Very beneficial, but it doesn't fully eliminate those things. But you know, we talk about, you know, Ace Hardware and their model is, you know, independently owned co op. And so these are, you know, the big company. Right. The co op itself is what got hit. But it was a big, big issue for them. It kind of shut, shut down. In fact, they. Where's the quote on that? I wrote it down. But their internal operating system, which was ACE Net, which is the big tool, I've done business with ACE a few different times over the years. So ACE Net is their internal big system, their warehouse management system, their retailer mobile assistant, their hot sheets which is all the updates on specials and stuff that go out. Their invoicing system, their ACE Rewards customer system and their customer care center's phone system were all either interrupted fully or were ended up getting suspended out of it. So they explained that 196 of their servers were hit during the attack and again they're going restoration. Now that may be easy for one of our customers at Lead Smart or someone listening here that says hey, I'm a regional electrical distributor with 15 branches and that's ACE and that's just what's going to hit them. This isn't going to impact me. Well, Brooke Sutherland, who covers distribution and manufacturing for Bloomberg speaks regularly at industry conferences that we attend. She just published an article earlier this week about you know, small mid sized manufacturers and you can plug right into the end of that. Distributors are a major new attack center. So something I mentioned you earlier Tom, I think it's something we're going to start maybe talking some more on maybe get a guest or two on that in the coming new year that can help with those discussions about cyber security for small and mid sized businesses.

Yeah, I was in a meeting yesterday and around with a company that is in the cyber security space and the amount of emphasis that is going on in 2024 as term and, and even the government in terms of if you're a government contractor or yeah, you know, anybody who's doing work for the federal government in any way shape or form, the level of scrutiny that is going to go on in order for them to get a contract is, is greatly increasing. They're having levels of compliance and certifications and so forth that are being implemented and the reason being is companies are moving to the cloud more and more at that time. It's you know, they're modernizing. Right. Cybersecurity has, is taking a very or security in general is having a real, real major, major impact of that. This is an area that I've had a whole lot of exposure to. But it all makes sense. As I started to connect the dots it's like it's great to be modernizing to cloud, it's great to be modernizing to AI and other technologies but you also have to be modernizing in your use of security and what you're doing on. Even if you're not government or not if you're just any business, so.

Well, I'm glad you, you shared that. You know, you think about it, right? If you even look at, you know, wholesale distribution, I'll just specifically talk right now about the US But I would think it's this way. I'll call, I'll say North America, right? There are plenty of quarter billion, $100 million dollar companies out there that are still operating a server in a closet down the hall, right. And their technology platform, their ERP platform, whichever it may be, is 15, 20 years old from a technology standpoint. Their servers, maybe they updated their servers five years ago, but it for them sometimes is, and I don't mean to throw rocks at anybody but just reality. In some instances it's, well, we go down twice a day and make sure all the green lights are on in that closet where the servers are, right. And we may, we put an extra H vac vent in there to cool things. And that's, that's where we're at with it. And the idea of cybersecurity or protecting that server and their, their data, which could be, you know, years and years and years of ERP and customer data and employee data and so forth. It's, I think cyber security is something, as I said, it's something we should take the responsibility to start talking about more on this, this and what I.

Also believe and we'll move on here, but we've talked a lot about using security just to avoid shutdowns or malicious things here. But you also have, you know, data, right? As data becomes more valuable, you want to protect that data. So other people aren't able to take that data and use it to drive however, whatever models or whatever they're trying to do. So there's, there's a lot of aspects to security. Like I said, this meeting I had yesterday was a bit of an eye opener for me because I haven't had a whole lot of exposure to it, but it makes total sense and this is a perfect example of it.

That's, that's great. Well, we'll, we'll continue to work on this because it's an issue. And I was just in closing on that, I was at an industry event in early October and was talking to, maybe it was a little earlier than that, but I was talking to a gentleman who's family owned manufacturing company here in the US and they got hit about 18 months ago where all of a sudden messages showed up on every computer screen in their company. Turned out after about Two weeks of them almost being shut down that they found out that they, the company had. The hackers had very limited data. In fact, part of it was more of a hoax to get some money because they couldn't document or show that they had anything. And then when they started pushing them and calling them out on, you know, anyways, it all went away. But not after literally scrubbing multiple servers. Every computer in the company completely reformatted, you know, tens of thousands of dollars.

It's a pain in the ass. It's a pain, right. And that's the understatement of our day.

So yeah, there we go. Good, let's jump ahead. So each week we also have an article in here called Tech Talk. We won't spend a lot of time on it, but this week, good article about generative AI and the what's described as the industrial metaverse. Tom, any thoughts on that? We can kind of move quickly on this.

Yeah, no, I don't. We've talked a lot about this before. Digital twins and using things to in the metaverse.

Happening faster and faster though.

Yeah, what I didn't see a lot of in here is talking about how generative AI will fit into that. But I think you will see more of whether it's predictive AI or the metaverse or some of the things like that using generative AI to make it even better and more accessible. So kind of a layer around it if you will. But anyway, decent article, definitely worth taking a look at.

That's great, very good. Appreciate that. We'll kind of pop ahead. We do our industry news and industry scuttlebutt as we describe it each week and party. The H Vac and Refrigeration Distributors group they showing some economic results from for their members in September. So little off, 4% slide. That's not a great place to be but hopefully that turns around fairly quickly. Some good results that reported from Fastenal but the other thing we have in here we. We get a lot of data and we are greatly supported by the folks at Modern Distribution Management. And I think Mike Hockett's with us today there, one of the managing editors there. But they did a podcast that I published here about Amazon business and the description is I'm just getting started but you know, a lot of people look at, you know, Amazon is the devil and in the Amazon supply side of things and more particular Amazon business and I think this is a good. I listened to. Excuse me earlier in the week only about half of the podcast, but I think it's a good discussion about the gentleman that is leading that whole group. He's been with Amazon, I think, since that was, you know, they were just selling books and records and tapes and CDs. And so I think it's well worth the time, you know, because Amazon Supply is. It can be the devil, but it could also be your best friend if managed correctly by both manufacturing and distribution. So well worth a listen on that standpoint.

So, yeah, and I haven't listened to the podcast, but just think about what we just talked about with the new Olympus model.

Sure.

I mean, they're not gonna, they're gonna incorporate that into everything they're doing. So all of a sudden, you know, a lot of Amazon, whether it's Amazon for consumer, Amazon for business, there's going to be a lot more AI capabilities incorporated in there.

Yep, very good. So, you know, kind of following up to that, we won't go into this one, but we have another feature article there about. It's in our special feature that we do each week and it's from E Commerce360 and it is referencing as manufacturers go direct to B2B buyers, distributors must digitize and to survive. I'll just say, just because of time, we won't go into depth on it, but it's not as doom and gloom as that might sound. There is a wonderful opportunity right now that could include Amazon as well for manufacturers and distributors to truly partner on improving customer experience. And so often the time that we're seeing now is that manufacturers that are selling in marketplaces direct to end users are doing so because their distribution partners aren't in those marketplaces selling their goods on their behalf. So sometimes people are getting pushed into that. That's a, you know, a hornet's nest of things to discuss. But it's well worth it to take a look at that article again. So our last one that we talk about each week we have what we call a good read. This one talks about the science and brutal truth about online meetings. I think we've all in the last four years now are coming up on four years, not too long have learned the ins and the outs of, you know, how to try and stay awake for zoom meetings and teams meetings and so forth. But there's some good ideas and tips and tricks in there about how to make host a better meeting and participate better in a meeting.

And I found it interesting as the biggest complaint that people had is they're boring.

Right. Clearly they don't come to our meetings.

Yeah, I mean, I do probably on Any given day, four or five, six Zoom meetings a day, boring would not be what I could consider. To me, the bigger issue is, is stringing all of those, you know, four, five, six meetings together and then all of the to do's and all of the follow up things that come out of those five or six meetings and that gets compounded over the course of a week. And you know, we've talked a lot in the past about sort of quality of life and making, making work more efficient. Anyway, I would just find it was interesting and maybe this is true and maybe bigger companies or whatever where it's just like you get on there and there's really nothing to do, but boring to me seemed like the least of the things that.

Yeah, I think, you know, people in large organizations get, you know, and this, this is no different than when you got summoned to walk down the hallway, right to, to go to a meeting that another department was having, but they thought you should be there. And I think that's where this ties in. I think it's, I think it's at all of the Elon Musk's companies is people are encouraged to leave meetings. I think it's the mantra is if this doesn't directly impact what you're working on or you don't have something significant to add, get back to work.

Yeah.

And it's not questioning whether somebody wants to or not. They just, just leave.

Yeah.

So, but anyways, I thought that was interesting. You know, what's one of the first co pilots that I'm looking for for me is, and this is a really a good example of AI, right is Zoom will give you an AI recap of your meeting. Right. I use Fathom video recorder to record my meetings. It gives me a transcript, an AI transcript. It's pretty weak still when I read those. But I want something that comes out of there not just as a I have to go read it. But much like the Genius Feed feature in Lead Smart that says not just here's what you should go spend your time on and here's what customers you should be talking to about what topics is something that comes to me as a reminder, like Genius Feed does in Lead Smart that says do this after my meeting. So when I finish a meeting with a prospect or a channel partner of ours or whoever it might be, it says I'm putting this thing, these things on your calendar that you committed to. Is it okay? And I click yes.

These things where we're going and I'm sure we can even be done. I haven't set it up is you could take all of your meetings from the day, feed it into AI and then have AI come out with a summary of the things that you need to go do. Not just a to do list, but in theory, then provide insights on what to actually go do, like why or.

I've asked your virtual assistant to do these things and you need to do this right.

And that is coming as well.

So, yeah, next Tuesday. Can I have that?

Yeah, no, it's actually, it's really, it's, it's the technology is there. It's just all the mechanics of setting it up is still not 100 good.

All right.

On Ron's comment before he left here, because he did listen to the podcast that we were just talking about, the MDM podcast, and what I find interesting here is he said a lot of conversation about customer engagement and how they respond to today's customers. When you think of Amazon, right, we don't think of customer service so much. We tend to think of, you know, that's what we get from potentially a more local or, or, you know, regional type distributor. But obviously they're putting more and more emphasis and be interesting to listen more on that podcast about their customer engagement. So. Good.

Well, we'll chat about that further after you've had a listen. So modern distribution management, they just, they put out a ton of great content share other good content out there that they share back on their platform as well. So we appreciate getting info and feedback from Tom, Gail and Mike and the big, the whole team over there. So good stuff. Boy, we covered a lot of ground today. I think some insightful and impactful. I'll say impactful, not insightful. Others can decide if it's insightful. But the, the AI discussion about the regulation, I mean, that is something we need to stay on top of very closely. We'll see what happens with the economy in the coming months. But I think very much something that we need to be watching more and more closely as a cyber security issue. And I think we can as, as our podcast here and around the Horns, that's something we can kind of try and take some thought leadership in to help our listeners. So, Tom, any exciting for the weekend?

I hadn't thought about it that much yet, so.

Okay, well, it's, it's 10 o' clock on Friday, so.

Yeah, I better get on it.

Yeah, very good. All right, well, Tom, thanks for this today. It's always a pleasure. I'll sure chat with you again later in another online meeting that we have right that's right.

And a half hour boring zoom meetings.

Yeah, that's it. So. But we'll thank everybody that was with us today. We appreciate your comments, your support. Again, just hammer on that like subscribe share button wherever you happen to be listening to us. Leave a review if possible. It's very helpful to us to get the message out further, as I mentioned earlier at the start of our broadcast today, that each week our audience grows and globally and we're going to try and keep doing a better and better job as we wind down this year and go into man, it's where are we at today? What is 65? 66. 66 episodes. So we got to figure a party out for 75 or something like that. But astounding that next year we'll be at number know number 100. I think it's something like 90% of B2B podcasts don't make it to 10. So happy that we're here. Appreciate everybody's support as always. Have a great weekend. Enjoy yourself, have fun, be safe and be kind. See you next week.

Yep, have a good weekend.

We hope you enjoyed today's episode and our guests. Each week we try our best to dig into the topics that are impacting your business. So please reach out to us and let us know how you think we can make the show better or topics you'd like for us to tackle or talk about more often. And even guests you'd like to see join us. We're looking forward to bringing you next week's session and hope that until then you stay safe, stay focused and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation. And finally, please check out our sponsor, Leadsmart Technologies and their manufacturing and wholesale distribution industry CRM customer intelligence and channel collaboration platform. That's Lead smart technologies@leadsmarttech.com.