00:00Mike, first of all, tell us about your company and what you guys do.
00:03Yeah, sure.
00:04So FedHive is what they call an accelerator for compliance.
00:08Government, as you know, DOD, federal has all types of compliance issues.
00:13We shepherd people through that process and get them to an authorization, an ATO.
00:18Most folks have a tough time getting a sponsor nowadays because of budget cuts, et cetera.
00:22So we manage that whole process for companies since that's not usually their core.
00:26Has it become more interesting, more complicated?
00:28And is your phone ringing off the hook because of AI?
00:30Yeah, well, you know.
00:31Or just in general?
00:32Well, just in general because of all the security issues that are coming up.
00:36And then, of course, with AI and the pressure from security and all the attacks on an accelerated rate,
00:44how do we have the compliance issues associated with what the government wants, right?
00:48Because commercial space has one thing, but the government has these compliance.
00:53Is the government moving quick enough?
00:54I mean, this is the question.
00:55And, you know, David Sachs was AI czar for this administration, also the crypto czar.
01:00There has been a lot of discussion just in the last couple of weeks about Anthropics and Mythos and the
01:06government's reaction to Fable 5,
01:08its latest version of Mythos 4, you know, with the quote-unquote guardrails and the jailbreaking there.
01:13Yep.
01:14Is the government moving quick enough?
01:16So the government is a big beast, and it is moving faster than it's ever moved before.
01:22It is.
01:22So I will say for the 10 years that I've been working in compliance, way faster than it's been before.
01:29But is it ever fast enough?
01:30As long as they're staying just ahead of the front of the wave, yes.
01:35But with Anthropic and all the other issues that you're talking about, they're bringing up more and more concerns.
01:40What are the concerns that that brings to you?
01:43For us, we're working, you know, even though our customers pay us, we really work for the government, right?
01:49So we are trying to make sure that they're happy and they're aware of what's going on, and that's the
01:54biggest issue.
01:55Yeah, I guess the question that I have is, you know, if you're working with a private company or, you
02:01know, you're not having to work with the government, there's – you don't have to move at the speed of
02:05– you can move at the speed of private enterprise.
02:08That's right.
02:08Moving at the speed of government is a completely different story.
02:11So are you dealing with, like, antiquated systems, antiquated rules and regulations, antiquated technology?
02:18Yeah, so we're right in the middle of this kind of firestorm of make compliance easier, keep the security high.
02:24We've got these new things accelerating through.
02:27We want innovation into the government.
02:28How do we get that without lowering the bar of security?
02:31So all of those pieces are coming into play.
02:34When it comes to guardrails and protecting all of that data and information that is being collected and, you know,
02:41thrown into AI models and played with and hopefully coming out with some ROI at the other side of it,
02:46what can we learn from sovereign AI and what's going on that can be applied more broadly?
02:52That's a great word.
02:52You know, that's been being banded around more and more of the sovereign data discussion.
03:00So the government requires everything to be inside of a boundary, right?
03:04Like you have a playground and you can do everything in the playground, but nothing can leak out.
03:07But we have these interactions with all of these different services from the hyperscalers and all those products.
03:13That's what makes it really difficult because in the commercial world, like you said, you can use whatever you want,
03:17try it out, break it fast, figure it out.
03:19But in the government, we, you know, a lot of PII in the federal side, a lot of –
03:24What's PII?
03:25I'm sorry, personal information, personal identifiable information.
03:28And then on the government side is their data too where you have real kinetic issues, right?
03:35So all of that data is really sensitive and you can't really afford to make that break fast, kind of
03:40move forward kind of thing because the data is too expensive.
03:45So no lessons to be learned?
03:47Oh, so the government's always been trying to be more conservative and not allow the data out as fast, which
03:55then goes to the, you know, how do we get more innovative stuff in?
03:58And so there's this push-pull all the time.
04:01That's part of the problem.
04:02And there's a lot of lessons being learned.
04:04Yes.
04:05Well, I'm curious about China and Gulf nations, for example.
04:08You know, you bring up the sovereign AI discussion, Carol, and we can't have this discussion in a vacuum only
04:13thinking about the U.S.
04:14Right.
04:15So in terms of what China's doing, in terms of what the Gulf nations are doing, what other countries around
04:20the world are doing with this technology and with this AI,
04:23when you look at – when you understand what the U.S. government is doing, does it seem like we're
04:28in a competitive position with how we're handling it?
04:30Well, the U.S. government really forces us to keep everything in our boundary, in our – the U.S.,
04:41continental U.S. boundary, right, chips and everything.
04:43We work with the ITAR, the regulations for putting chips outside of the U.S., so we work with the
04:49Commerce Department and that sort of thing.
04:50So we are always trying to keep the technology inside of our –
04:56Does that constrain you in a way that other countries are not constrained?
05:01Well, yeah, because you don't have that multinational kind of amalgamation of these different countries doing all this work.
05:08We have to keep it inside of our, you know, our shores.
05:12So, yes, technologically that could, you know, affect us, but, you know, the security aspect of the technology is something
05:19that we're worried about.
05:20Hey, Mike, some of the conversations that we've had, too, is what's going on at the kind of C-suite
05:24level, board level.
05:26What is – what are the conversations that leaders at companies or institutions should be having at a very senior
05:32level when it comes to compliance and security,
05:35especially with all of the work that's being done in AI at those institutions?
05:40Yeah, most of the discussions that I'm having when I'm talking to leadership is about the risk aspect of it.
05:45What's the risk and liability to the organization?
05:47And so we, you know, as at Shepard, we look at what are your operational securities and how does that
05:53affect your compliance, right?
05:54Because it's a defensible situation with regard to your compliance.
06:00There's always that – the battle of the enemy versus us and attacking the security.
06:07Right.
06:07So it is – there's always going to be an attack.
06:10What's the AI return on investment for taxpayers?
06:12And I ask that as all of us are the ones paying the bill, basically, for, you know, migration of
06:17data.
06:18It comes down to that.
06:19Does it mean that we're going to get our passports faster?
06:23Does it mean, you know – like, what does it mean?
06:26Frictionless, you know, when you're dealing with the government, we're just, you know.
06:29Yeah, I do appreciate you putting me in that box.
06:31It's very nice of you.
06:32You know, what we see is incremental efficiencies with regard to –
06:35Tim one, Mike, you're just going to say.
06:38Exactly.
06:39No, what we're seeing is incremental efficiencies and speed.
06:42And what it's allowing us to do, for instance, is to move folks to other areas of the organization
06:48so that we can add more customer – better customer experience and faster to market and those types of things.
06:55So I see that being what we're allowing our customers, which are the ISVs and cloud customers,
07:02going into the government, which then allows the government to be able to be faster with these new technology tools.
07:07How's that?
07:08That sounds good.
07:09That's – okay.
07:09I'm ready.
07:10Good, good.
07:10That sounds like –
07:11Faster for a efficient government.
07:12AI productivity to the government?
07:13All right.
07:13Yes.
07:14I'll take it.
07:14I'll take it.
07:15Yep.
07:15Yep.
