Microsoft Activision Deal in UK and RSA Conference

From the Heart where Innovation, money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and ed Love Love.

I'm Caroline Hyde and Bloomberg's world headquarters in New York.

And I met Lovelad.

This is Bloomberg Technology live in San Francisco from the RSA conference focus on cybersecurity. How are companies and governments around the world responding to the digital threat? That's the conversation Caroline will be having here.

Meanwhile, there is so much conversation we had around competition, around earnings, and we start there with this market check ed, because let's just go to where we're.

Seeing some of the movement.

Interestingly, the buying of the NASDAC today big tech on top. Why because of earnings outperforming the Microsoft the Google's. Will get to it in a minute, but this isn't a global store. Technology actually underperforming over in Europe as some of the chip makers chip related companies are actually underwhelming in terms of their own performance, so we see a bit of a dive. They're pulled back on the six tens of percent over in European technology trading crypto.

Getting a real buy.

Is this risk on around technology and the correlation there, or is this because we're still worried about a banking crisis. Let's have a look quick look at what's happening in terms of First Republic Bank. We're seeing yet further record lows for this particular lender. We know that we have some concerns around maybe a.

New share sale.

We've got Alphabet shares on the upside as its earnings come thick and fast. Let's just go to some breaking news though, because we do indeed have the fact that Disney we understand, is suing Florida Governor Rhonda Santis. This is according to CNBC as it currently stands at the moment, So Disney we understand suing Florida's governor Rhonda Santis.

Of course, there's been.

A lot of political issues between the governor of that particular state and indeed the autonomy of Disney around its municipal area, in the way in which it finances, where it works.

Let's get to.

That story in a moment. But we're going to go back to some of the numbers at the moment because Disney not really reacting on the news. We're up just a tenth of a percent let's go back to where we are seeing movement alphabet on the higher side of see Google actually managed to shake off those nerves around competitive threat coming from Microsoft and AI and Indy. Let's talk about Microsoft. Let's talk about the fact that it

Let's get to it.

Jennifer Ream please to say a blue meg Intelligence joins us to really dive into why the UK thinks this is such a competitive threat.

You know what they're concerned about.

I think are the innovations to come, you know, the where the markets are moving. So we at first everybody was focusing on consoles and how this might affect gaming on consoles.

But with the UK's.

Concern is that things are moving to the cloud. People will pay a subscription to play a game and instead of downloading it, they'll have access to all sorts of games on the cloud, and that's easier and it's much better. It doesn't clog up their computers. And they're concerned that Microsoft will dominate that area in the future because it already has such a strong position in cloud now if it gets all this content, and especially this kind of must have content, a game like Call of Duty, that

Arbitrage investor is saying, Look, we've never seen an appeal which Microsoft is doing work against the UK Competition Market Authority.

What then, of what this means for getting it still done?

Because they've also got European regulators looking at it, US regulators looking at it.

Look right now, it's a real uphill climb. It's not only going to be difficult to overturn this decision, it's going to take a really long time. Deals can't stick together for four and five years, which might be needed. You know, they have a lawsuit coming up right here in the United States that's supposed to start August two within the Federal Trade Commission before an administrative law judge.

At the end of the day, the read across big tech can't do big deals?

Is that really what we're left with.

I think it's not so much that big tech can't do big deals. I think it's going to be very difficult for them to do big deals. They'll get intensive scrutiny, and if they do have a problem, the remedy they propose has to be a really good one thorough. It has to completely replace the competition that's lost by virtue of the deal. That's going to be difficult to do with these regulators today, to get them to accept the remedy that's been offered.

Always fantastic to have your analysis, Jennifer Ree. You're going to read her with Bloomberg intelligence. Let's get back to it, though, We've got to go over to San Francisco and you've got an important conversation.

Yeah, we are live at the RSA conference here in SF. The focus cybersecurity, and we set the scene with Kevin Mandia, the CEO of Mandy and of course now part of the Google family.

Kevin, it's good to see you, Thanks for having me.

Let's start by saying, twenty twenty two a relatively quiet year from a cybersecurity perspective. We recognize that the digital threat you might have been quite well. I know you're always very busy, right, your peers, many of them are standing around us. Now, what is the topic of conversation today? What is the focus?

Well, I think there's a lot of focuses.

When you reviewed twenty twenty two and then looking into the future and twenty twenty two, I think the focus.

Was, Hey, there was more zero days than before.

We got to get better at the blocking and tackling the patch management. China really innovated on our offense when it came to cyber espionage we had.

You've gone straight to China.

WOHI is interesting because we recognize heightened geopolitical tensions between the United States and China. Do we see a ramp up in cyber activity coming from China correlate to.

That, well, I do, you know, my view of all ideological and geopolitical conditions kind of seen in the cyber domain.

What I can opine on is in.

The cyber domain, I feel we saw more innovation, I meaning more vulnerability and vulnerability research and exploitation out of China. That to me was innovative, It was creative and advanced, and we saw them.

Doing better operational security.

So in that regard, offense with cyber espionage techniques out of China had perhaps its best greatest one year in advancement in my thirty year career.

Mandian as it's been in the news cycle, has also been focused on activity in North Korea, particularly around RNSOM. We recognize that President Biden hosts his South Korean counterpart in the coming days. How much is that a threat At the moment, it seems somewhat random ransome activity that comes out of North.

Well, you know, when you look at ransomware in particular, we saw actually a decrease in the over eleven hundred cases where we were hired to investigate what happened and what to do about it. We saw our ransomware investigations actually go down, but when we do threat research or respond to North Korean threat groups, we are seeing them hap to make money and those intrusions that are usually

It's basically been a year since Mandian joined Google Google Cloud. What's that transition been Like? You're a founder CEO essentially, right, do you remain entrepreneurial?

How do you operate within a big BA slide?

Well, so, you know, first, I don't feel that much of a change. We had tremendous alignment between what Mandian's vision of, you know, their cybersecurity future was and what Google Cloud's vision for what they want to do in cybersecurity. When you have that kind of alignment, it's kind of like two armies marching in the same direction towards the same goal. So it was easy to come in and integrate. I haven't felt change. We're still responding to breaches that matter.

I think the big change.

Back to your first question, which was kind of you know, what was twenty twenty two? What are we looking forward to? We are coming up on a shift change in security. You know, Cloud was a shift change in security where people had to recognize you could do security from the cloud or you had to do it for the cloud. Now we have AI coming out right and it's going to be a shift change.

And you finally took us that absolutely so so generative AI. I mean, how does it change defense?

Oh totally yeah.

So you know, the best analogy I have, because the ways that it can do it is probably too quick for a sound bite, is I remember when Tesla one day just updated and my car could drive itself. I remember, yeah, absolutely, and I remember going, oh, there's no way it can drive itself.

And first day I'm gripping the wheel.

Second day, I'm on the two to eighty and I'm like, it worked.

I think, AI, you're going to.

See some of the most rapid answers where security challenges that were very hard, like great identity security, suddenly we go, wow, we're great at it now. So you're going to see advancements coming at speeds.

Well, advancements. I mean, how are you integrating Bard very quickly? Because that is where Google has shown his hands.

Well, we're creating, you know, for the security use case. You know, the way I look at is kind of coming from the other side. So is BARD coming at you for generative AI. But I'm looking at it from the vertex point and looking at it from We need our own models in security so that we can determine anomalies to log ons, anomalies for processes. The security use case is going to have different data, different machine learning models, So I kind of look at it from that standpoint.

Yes or no? Are you making money for Google?

Am I making money? Yes?

Yes or no?

Will you be there in a year's time, still part of that bigger company?

Yeah?

Kevin Mandia, CEO of Mandy and thank you heart Caroline of Google Cloud from RSA you in New York.

It's what a great punch the interview ed.

Thank you so much.

Let's look at the parent company of Google, Alphabet of course actually managing to post better than expected earnings for the fiscal first quarter showing really resilience in the face of new AI fueled search competition, also finally breaking even when it comes to cloud places. Say we can dig into Alphabet with Daniel Newman, his principal analyst at Full Term Research for joining us now and what are you seeing Dan at the moment in terms of Alphabet's shares rising.

I think it's going to be a little bit longer before we start to see the real impact on search. Of course, we saw open ai and chat Gpt integrated into Being and that brought up some concern. But the core business model and where people land to do search today is still on Google.

And that is also why we saw this big in topic rise about.

Say Samsung and whether or not Microsoft should be investing big to put search on the mobile devices because right now the first place people do go to search is still Google.

But Microsoft is making this interesting again.

Certainly is and Microsoft really talking up it's AI investments. The focus on how they beef up compute power in their earnings as well is Alphabet managing to convince investors that it too is still an AI leader because it's managed to underwhelm us far.

Yeah.

I think they were forced to come out with their hand a little bit earlier than they had anticipated and wanted to, and that caused a little bit of consternation when that first launch is barred, didn't go exactly as planned. I use all these tools, and I'm also someone that's been following the innovation, the investment, and I think it would be really early to rule Google or Alphabet out. You see what they're doing with Brain and deep mind,

We saw Google had to.

Follow, Aws has had to follow a number of other companies have. But I think multiple companies succeeding and investing is going to bring innovation to the consumer, to the enterprise, and that's actually good if there is no declarative winner this early.

Of course, the real power behind profits, behind revenue for Alphabet is the search.

But what about cloud?

How much is this folding into the AI provision that we so clearly see with Microsoft and Azure and also here at other competitors.

I think this inflection is actually going to be good.

That the company turned a profit for the first time in this quarter. It was a small profit, but they've been mounting up some significant losses but had been continued to invest in the infrastructure required to move into different regions.

In different zones.

I think companies that have maybe been on the fence about utilizing Google Cloud may feel little more comfortable seeing that this company has turned a corner in terms of profitability.

And also Google because it's reputation.

In data in AI and there is a lot of strength there that should help them as companies turn to multi cloud. So while Google may not win all the cloud business, that's where AWS has been incredibly successful in.

Azure as well.

Google will start to become part of the equation in these enterprise cloud deployments and I think that's going to be a big part of them staying on pace for.

Growth, and that's what they did this quarter.

You saw twenty eight percent here versus twenty seven percent over at Azure.

Really smart to read across the whole space for AI with you, Daniel Newman.

Of course, Future and Research. We appreciate the expertise.

Meanwhile, let's turn to another key tech john that are going to report soon. It's Meta reporting results off the Bell. To be specific, when we make Sarah frag joins us Phillip, what are we going to expect from Meta because we know it's a tough macro environment in terms of sales.

Is it all about the costs the efficiency?

That was the narrative last quarter that Mark Zuckerberg's CEO really pushed is that this is.

A new era for the company.

They're going to be cutting costs, They're going to be trying to be faster on their product more efficient. But I think that beyond that efficiency talk, you know, we'll see if it's been enough. They have announced a lot of cuts of their workforce, They've announced a lot of ways that they're slimming down their their product line. Is are investors going to be satisfied with that? Considering the fact that their main products are still slowing in growth

Yeah, you take us there, because it's going to be the fourth straight revenue decline, fourth straight quarter of revenue declines. We're expecting analysts expecting could see daily active users of more than two billion, monthly active users of more than three billion.

So it's still such a juggernauts sir.

But how much do you think we are going to hear this pivot to artificial intelligence?

Is that going to be the lexicon?

Or do we have to realize that they're still willing to take losses on the investment in the metaverse?

Well, Zuckerberg has to be careful because he can't just cut out and say AI is our new north star because they just went through a complete rebrand of Facebook into meta and said that the metaverse was the future. So I think what they're going to have to do is is And we've seen it a little bit from Nick Klay yesterday on Bloomberg Television saying that you can't have the metaverse without AI and sort of making AI part of the metaverse vision. So it gets a little squishier.

We hear how many times they use the turn of phrase lama its own large language model. We thank you so much, Sarah Fryar ahead of all things Meta. Meanwhile, ed all things cyber for you, right.

We focus on the talent needed to combat cybersecurity threats with Morgan Danski NC Cybersecurity Collaboration Center Chief.

That's coming up next. This is Bloomberg.

We'relive at the RSA Friends here in San Francisco. The focus cyber security, and we turn to USA battle for talent to combat threats and cybersecurity. Morgan Adamski NSA, Cybersecurity Collaboration Center Chief you have a target three thousand new staff by next year, Why do you need three thousand more people operating within your agency?

Absolutely, so we continue to have to grow the talent. We need people with different backgrounds. As we have attrition and people leave, we need to continue to fill that pipeline. And so we need people that just are ready to fulfill the mission and have purpose. And so we're excited. It's our biggest hiring year to date.

When our global audience thinks about NSA, that they think about all the sorts of security threats. But where is your focus when it comes to cybersecurity?

What are you working on day to day?

Yes, the People's Republic of China is the pacing threat right right?

You went right there, straight to China.

How does that? How does that look? What sorts of threats? Is this ransomware?

What do you we did?

It's more so that persistent broad threat cyber espionage preposition, looking for opportunities to gain information, to steal intellectual property. It is the broadest, most pervasive threat that we face every single day.

The bind administration has set broad cybersecurity goals, everything matching your efforts in hiring, to competency in cybersecurity. What kind of energy is that given you in your agency?

A lot of energy. We're very excited because we have a lot of people coming out of college, but people that want to have, you know, mid career changes to come into cybersecurity, and so it's really invigorated us to go out recruit, talk about our mission publicly and bring in as many people as possible.

Morgan, how many times a day do you say the words generative and.

AI A lot?

Recently we talked about it massive. What does it matter to you AI right now?

Right now?

You know, Generative AI has been something that we've really focused on for a long time, but it's right now Obviously at the forefront of everyone's minds.

They want to talk.

About both the benefits and the risks. What's really important is that we're having that conversation up front as we start to really understand the technologies and how we can take advantage of it.

Earlier in the year, when we were at CS we spoke to Jenny Slie of CISA, and she had a message which was Corporate America needs to do more. We need companies of all sizes detecting threats earlier, designing safeguards into whatever product they're working on. Absolutely, who leads this charge? You the private sector, do you work together?

We work together. It's going to take all of us to do secure by design type products and build it into the foundation. Cybersecurity is a mindset, it's not a skill set, and so we really have to just think about how are we taking all the necessary measures to make sure when we build technology it's there for the future and it's secure.

Going back to that hiring target then and skill set. Are those three thousand people you're looking for actually out there? Are you worried about sort of a deficit in skill in this country?

No, those people are out there. They don't necessarily have to have degrees in cybersecurity or backgrounds and engineering. Sometimes it's just people who like to solve problems and think about the problem in a different way. So we're really looking for all walks of life when we talk about those three thousand employees.

After China, what is the next big thing that keeps you up at night?

What keeps me up at night is the workforce? Is the development To be completely honest with you, when you talk about threats, though it's probably Russia, they're a multi prong threat and it's something that we focus on every day as well.

There is heightened geopolitical tension between the US and China and Russia, going back to the war in Ukraine. Does the ramp up in cyber threat mirror that ramp up in geopolitical tension.

Absolutely.

We see a lot of our cyber actors both in China and Russia, but also activists in cyber criminals learning from what's happening every single day, and so they're just learning techniques that they're now employing broad skill.

All right, Morgan Adamski and a say, Cybersecurity Collaboration Center chief, Thank you, Caroline Talent.

Just one conversation.

This is an industry in public sector that is hiring right now.

Wow.

One of the bright spots therefore in the world of technology seems to be resilient. Welcome back to Blue Meg Technology. I'm Caroline Hyde in New York.

And I'm Ed Ludlow live here at the RSA conference in San Francisco. Cybersecurity is what we're talking about. Industry arriving here with generative AI kind of top of mind. They're also thinking about what threats look like right now. So I'm going to bring in CrowdStrike CEO George Kurtz here with me on site.

This is what you've been talking about.

The sophistication of what your industry faces, what the public sector face is what are the biggest threats out there to you and what have you found in the first four months of this year.

Well, we talk a lot about nation state threats, which are certainly prevalent and will always be prevalent. One of the things that we actually did a keynote on myself and Mike Sintonis was on e crime and we took a representative case study of some e crime groups and really talked about the sophistication level. While it's sophisticated, it's actually relatively easy to get into many organizations. You could

What is the rationale of the threat actor?

I think that there's this idea, if you take ransomware as an example, that that activity is just indiscriminate. They just want money, So they go after whoever they want.

Well, they want money, and they go after where the money's at, right. They go after the bigger companies, they go after source code, they go after companies that they know could pay. From a public embarrassment perspective, but you're right, there's a bit of indiscriminate access that if they have it, they're going to try it. Whether it's a hospital, whether it's a large company, whether it's a government organization. They want to get paid from everyone.

We just talked to the NSA about trying to hire talent in the public sector in this country. You post strong earnings, strong top line growth, How seriously does corporate America take the threats digital threats, cyber threats. Well, you're just waking up to this now, or do you see sort of consistency.

I think it's consistent, and it's been consistent over the last probably five years. From a boardroom perspective, I think it's moved from an annoyance of having a PC that's infected to potentially systemic risk to a business when the entire business is ransomed and their systems are rendered useless. So it is the number one in my opinion, threat that has talked about in the boardroom today.

Do you remember in January when we were at CS there were thousands of people there, not that many of them were saying generative AI. Right now everyone here is saying generative AI. What does that mean to you? Are you using generative AI tools to improve crowdstrikes offering? Do you use it personally? I mean, how does it impact your industry?

Well, I'm this is one of those fascinating technologies and I think it's a bit of an iPhone moment for many folks when they actually use it and get the results out. When you think about generative AI and how can be used in security, it can really help in automation. There's a lot of repetitive task for a security operation center, administrator, things of that nature, and I think that will help

There's a debate in the fields of whether generative AI makes tackling phishing more difficult or if it helps to rescale the workforce You've already got to literally improve defense. Where's your headline with that? Is this an upskiller or is it a sort of displacement of human activity?

For me, there's always going to be humans in the loop. And you kind of look at level one, two, and three. If you can automate a lot of the level one repetitive task and you can basically make level two analysts or level three analysts more productive, you're going to hire less of them, be their hard to actually find and keeping their expensive. So why not automate the repartitive tasks.

At the state actor level? Where are you seeing more activity? China or Russia?

China's pretty active, pretty active now, particularly when you look at what's happening with Taiwan. They have a long plan.

There is that ramptop as geopolitical we've.

Seen it ramped up. Yeah, with geopolitical.

Tension and how does it manifest itself, particularly.

In the technology industry. You know, obviously there's a lot of chips in Taiwan, so there's a lot of understanding what's happening. There's a lot of reconnaissance. There is a lot of just understanding even shipping lanes, you know, who's shipping what. All of these facets of information are of interest to the Chinese government, and they suck it all in. It's like big data exercise for them. They suck it all in and they build a puzzle and they're very patient.

George Kurtz Crowdshrake, CEO. We're live here at RSA, Caroline back to you in New York.

So much more to come. Let's just get a quick check on the markets though, as we look at what is really tech galvanizing some risk on sentiment in the United States. Now's that one hundred having its best day in a couple of weeks since mid April. The reason earning's coming in better than expected, particularly when you look at some of the key names. I'm looking at the S and P five hundred, which is being helped hire

Remember sixty nine billion dollars.

This is one of the top thirty M and A deals ever and the UK thinks it's anti competitive according to its Competition Market authority.

Activision Blizzard off by more than.

Ten percent as we worry about that deal going through. Tesla off by more than three percent. Interesting fiscal on the upside today as actually we see that this does have a route to getting some of its cars into the European market into the US market. By May Fiz Tesla having a pretty bad day, actually one of the

Yeah, so much of that Microsoft story is about AI. So that's where we take the conversation. Next Vasu Jacao, who's the security chief over at Microsoft. They've already told us how they integrated those AI tools into the security offering. How's that driving the business? And what's she talking about here? Or next from RSA. This is Bloomberg. Welcome back to Bloomberg Technology. We are live at the RSA conference here in San Francisco.

The focus cybersecurity.

But I gotta be honest, everyone's talking about generative AI, which is fortunate because we are joined by Microsoft's VP of Security, Vasu Jacau, and you've already gone there. You've already told us how Microsoft integrates GPT into security co pilot. But why what is the benefit of using AI to boost security offering?

It's great to be here with you live, ED, thank you for having us. We have to remember who we are up against as we think about why we need AI today. The threat landscape is really challenging. We've gone from five hundred and sixty seven attacks per second to twelve eighty seven attacks per second. That translates to tons of billions of attacks. Cybersecurity is very complex. The average defender is dealing with more than seventy tools at any given time, and it.

Takes a long time for us to.

Investigate all of this work and to do strategic work.

So that's where AI is going to be a game changer.

And let's not forget the talent shortage that we're facing as an industry. That's where AI is going to really augment that human essence.

US Microsoft shares up more than eight percent. Investors really bought the AI story during earnings. Security, you know, flex a little bit. How important is your unit now within Microsoft's offering to enterprise clients of all sizes.

YAH security is a twenty billion dollar business within Microsoft. We offer six product lines which come together to form one security cloud, and AI is very much at the heart of it. We talked about Security Copilot, which is what we announced on March twenty eight, the first and only generative AI pro which uses open ailm technologies as well as our Microsoft Security specific model, and we are

They trust you since that March announcement. Are they getting their checkbooks out and buying into security products because of the integration of the open AI technology.

They do trust us, And every single customer I have met since we announced Security Copilot has asked us about when Security Copilot will be available at scale. We've released right now in private preview because it's very important for us to work with some customers and partners. It's a learning system. We need to train this AI. We need to learn from our customers. But every single customer, every single partner has asked us and we're.

Helping them lay the foundations for AI.

Right now, security has kind of seen in this emerging growth driver for Microsoft. There's also a talent question that's happening here on the ground at RSA. Do you need to have people with a new skill set who have a background in AI rather than traditional security software.

That's the beauty of this new generative AI. You know what the most powerful coding language right now is in the world. It's English, and that's going to help get a whole new generation of defenders in because it's going to reduce the barriers to entry for cybersecurity.

We have a talent.

Shortage right now, three point four million jobs. We have a diversity challenge right now, we have a training challenge. So imagine someone who just gets into the workforce and can use AI as their ally to help them understand, to help them get trained. And imagine a Tier two analyst who is in your security operations center who can now have AI help them with automation and augmentation so they can then put their time on strategic decision making.

When Microsoft reported earnings, you know clearly Cloud was a strength as one example. The macro picture is still a bit concerning when it comes to cybersecurity. Do you see stability in the kind of commitment to invest into cyber security capabilities capacity even when economic times are hard. I'm just wonder what the health of demand is.

Absolutely, we made a big commitment to cybersecurity. We're investing twenty billion dollars in security over five years. That has started, and we continue to see security as the top priority for all organizations and the top spend as well as the most defensible spent. So we'll continue investing, we'll continue innovating, and we'll continue taking our customers on that.

Journey of USU. There are other things to talk about beyond AI. What are the corridor conversations here? You know, part of what we've been talking about is where the threats are coming from?

But for you, where's your focus?

Our focus right now is end to end with AI.

And I'll leave you with this, perhaps in our hands today is the most consequential technology that we're going to see in our lifetimes. We all need to be included in. That is the conversation being having in the hallways. It's not about what technology can do, but it is what is can humans do when empowered by this incredible AI and incredible technology?

Yes or no?

Are you using chat GPT every single day? I am Okay Vasu Jakau, Microsoft VP of Security.

It's so good.

Catch up here on the ground at RSA in San Francisco. Bloomberg Technology Live at the RSA conference here in San Francisco cybersecurity. The broader theme, generative AI the focus, let's bring it in rapid seven, Chief Security Officer ja blue Jen AI.

The topic.

You're looking at it from the other side of the table, which is advances in quantum computing. How do the threat actors harness that? Why is that a concern for you?

Well, I think it's a concern because we don't tend to prioritize those things that are import until they become urgent. AI is a perfect example of that. Actually, frankly, we've been looking at AI from a very long time lens. You know, we saw the AI winter and then all of a sudden chat GPT and we've got all this new renewed interest and I feel like it's similar to what we're experiencing with quantum. So we had the beginning of.

The hype cycle.

You know, we're worried about a quantum winter, but I feel like we should be prepared for that, you know, quick accelerated speed up, so that we do have our house in order when there is a quantum computer capable of decrypting ursay and making available our secret.

So we need to prepare. And this is why I'm concerting.

Your industry colleagues are sort of pretty upbeat, right they see AI as being value additive for their businesses, or they're talking about how they've always been combatant in AI.

Very few of them are saying the.

Problems we're dealing with could be made worse by AI. That's essentially your concern.

Well, I think there are a lot of people that are actually concerned about the growth of AI and what the downsides could be from all different standpoints, from ethical to also you know, the potential for what does AI.

Mean for cybersecurity?

Also from the flip side, like every technology can be good or bad, use fair enough, but I would like us to have a sort of roadmap for quantum readiness so that when there's a quantum computer capable of breaking our current cryptography, that we actually have a plan and that we actually know where our crown jewels are and we're able to protect them.

We're here in San Francisco earlier we were talking with the NSA. There's a lot of emphasis on what the Biden administration's doing. Absolutely, but you're actually the vice chair of the European Technical Standards Institute, and I just wondered which jurisdiction you think is actually leading the way and combating cyber threats.

That's a brilliant question, and I think, frankly, I think, frankly, the thing that's needed is that we work closer together, that we find our friends in this area, and you know, the.

Macignized cooperation between the United States.

And Europe, I think it could be better, to be very frankly, you, I think it actually needs to improve if we actually want to have any chance of doing well. The Biden administration with the Quantum Preparedness Act, you know, basically telling federal government that they need to have an inventorization of their cryptographic resources in order to make that transition.

The other topic of conversation is talent. You know, this seems to be an industry where everyone is saying, we need more people. We're hiding in the thousands. I know that actually, for you, education is a big part of that is there a skills gap in this country or a talent gap in the United States.

I wish there weren't, but there absolutely is.

And why why is that?

And I think there's two things. First of all, even though there is an availability of certain types of cybersecurity education, we don't see the uptake that we'd like to see. We don't see the demographic diversity that we want to see when we actually have applicants for different positions. And I and I feel like the depth of technical skills is still where we fall.

The most short.

So I think making it more accessible, you know, having coding practices in high schools, really starting very early with a kind of digital form of education, that's what we need.

When you say things like security, network architecture or end to end encryption in the context of a corporate entity, sometimes people's eyes glaze over.

I truly, yeah, yeah.

But you know, the threats seem to be very serious. Do you recognize corporate America taking that threat seriously? Is their interest and willingness to invest to protect themselves?

So it goes back to your previous question as well about literacy in terms of cybersecurity. Do we have enough cybersecurity knowledge and skill set to be able to do this well. And I think Corporate America is a perfect example, especially at the board level, where that also needs to improve.

Going back to generative AI very quickly, what's your data day engagement like with generative AI tools, are you using them in your line of business?

Actually, right now, within the company, we are asking people not to use chatchupute for any other corporate resources unless it's been perfectly vetted by us. And that's a very simple reason because I don't think that we're at a place we're using it internally for our own products, but using a large language model that's external to our company is not something that we're going to do right now unless it's for you know, people who are using it

Jablue, Rapid seven, Chief Security Officer, So good to catch up here at the RSA conference in San Francisco, Caroline. It's a day where the subject matter is clear. It's generative AI, and everyone is talking about that.

Yeah, whether or not it's in the world of cyber whether it's in the earnings that we start to see the hype become reality. The talk of the net editions Microsoft is making in terms of new customers interested in how it's evolving AI within its business model. But also we've got to talk deals. Ed you're a gamer, what did you make in the Microsoft Activision news.

Yeah, Look, I think a lot of the merger arbitrary specialists and a lot of though like generally this is a serious blow. There's a July deadline, but the questions around innovation and consumer pricing, Microsoft and Activision pushing back heavily against that that's the bit that.

You have to track. Well, what else can they do to convince regulators?

And it all comes round back to well cloud gaming. And we were talking so much today around the earnings of how much cloud is a driver and asu're for Microsoft, whether actually it's finally breaking even over at Alphabet and Google. What more are you looking forward to in terms of the cyber net conversations you're going to be having over their RSA.

Yeah, I think it's where's the value adding? We heard Microsoft saying, look, this is a driver for a lot of our businesses right now. We're demonstrating how the AI works but also how it improves our existing businesses Cloud that I think we've got to do more there.

Character we do always more to do.

We thank you so much for being out there.

Ed.

That does it for this edition of Bloomberg Technology. You do not want to forget to check out our podcast. Can find it on the terminal, Go listen back to some amazing interviews that you've had today, as well as our conversation around that news from Microsoft, and indeed it's deal of activision Blizzon go to Apple Spotify, Our iHeart from New York from San Francisco, This is Bloomberg,