
The Digital Leader Show · 2026-01-22 · 49 min
The Digital Leader Show examines several interconnected challenges facing enterprise technology in 2026. Chris Serdak and Dan Goodstein begin by analyzing labor market data showing job losses concentrated in professional services and information technology roles, while gains occur in lower-productivity sectors like healthcare and education - a trend Serdak frames as structural economic weakness. They address the K-shaped economy evident in Macy's and Delta's annual reports, where only premium segments show growth. Moving to AI specifically, Goodstein reveals survey data showing 77% of enterprises have shifted AI strategy from efficiency to growth, yet Goldman Sachs estimates large tech companies will realize only half the profits needed to justify current capex spending. Chris points to OpenAI burning roughly $2 million per hour and notes this model is unsustainable. The episode's main focus is the Walmart-Google partnership launching native AI shopping agents within Gemini that complete checkout and upselling without users visiting retailer websites. Serdak raises critical concerns about amplifying existing manipulation at scale - consumer surveillance feeding purchasing recommendations, combined with autonomous agents making spending decisions. He draws parallels to precision manufacturing tolerances: accumulated errors at trillion-scale operations produce catastrophic failures. Both hosts express skepticism about AI ROI claims while acknowledging specific high-value use cases remain viable.
Google is deploying native checkout buttons within Gemini that let AI agents complete purchases directly from a unified retail platform serving Walmart, Shopify, Target, Wayfair, Etsy, and 20+ other retailers, enabling checkout and upselling without users visiting individual retailer websites.
The K-shaped economy describes divergent recovery paths: the wealthy top 5% experience stagnation turning to growth in premium segments (seen in Macy's and Delta reports), while middle and lower-income workers face job losses in high-skill sectors and structural wage compression against 20-25% real inflation.
Autonomous agents lack human judgment and can be manipulated by existing surveillance-driven recommendation systems; errors compound at scale (billions of transactions), creating inevitable catastrophic financial mistakes like mistaken bulk orders that zero out bank accounts and credit limits.
OpenAI is burning approximately $2 million per hour with no clear revenue model to offset capex, making the current business model unsustainable - this pattern preceded collapse in RPA, cloud, and other hyped technologies when ROI failed to materialize.
77% of global enterprises and 92% of large enterprises have shifted AI strategies from cost-cutting to revenue generation, with 35% making agentic AI a top priority and one-quarter expecting 10% revenue uplift in the next year.
Computed from the transcript - who did the talking, and the words that came up most.
On this episode of The Digital Leader Show we are discussing the age-gated internet & digital rights..PLUS, headlines for digital leaders from the world of enterprise technology. About the Show: During each episode we explore some of the key issues defining our ongoing transformation into digital enterprises, including automation, AI & digital transformation. Join us for a unique, unfiltered discussion at the intersection of technology and business, helping you to become a better Digital Leader. We are live Wednesdays at Noon ET/9am PT. About the speakers: Chris Surdak is a Senior IRPA AI Advisor & Analyst and was formerly White House Chief Transformation officer, Automation & AI Practice Lead at EY & Executive Partner for Digital Transformation at Gartner. He’s an engineer, futurist, transformation executive and best-selling author, with over 30 years’ experience in technology development and deployment, digital transformation, blockchain, data and analytics and AI & intelligent automation.
Transcribed and scored by The B2B Podcast Index.
Kind: captions Language: en Ladies and gentlemen, welcome to the digital leader show where we talk key issues and news at the intersection of business and technology in hopes of making you a better digital leader. Hosted by Dan Goodstein and Herpa AI, a professional association, media, and peer research network providing education, networking, and advice to over 130,000 global members on automation, enterprise AI, and digital transformation. We're live Wednesdays at noon Eastern, 9:00 a.
m. Pacific on LinkedIn and YouTube, and the audio recording is available wherever you get your podcasts. And now, here's your host, Dan Goodstein. Hello everyone and welcome to the digital leaders gated internet and digital rights plus headlines for digital leaders from the world of enterprise technology.
I'm joined today by Chris Serdak. He's a senior AI adviser and analyst, award-winning author, and former White House chief transformation office adviser. Mr. Serdak, it's been a while.
>> It has. Welcome back to two uh 2026. Hard to believe. >> 2026.
It's been uh a busy uh busy few weeks. We were supposed to talk last week. Uh I screwed that up. I had some uh conflicts and things.
So, this is our I think it's our first show of the year. Is that right? >> I I think so. So, you know, welcome to the next quarter of the century.
>> Yeah, exactly. Lots going on. I guess it's better in a way because uh a couple things have happened over the last couple weeks that are worth talk about couple big conferences industry conferences and things. So um yeah let's uh before we get to our main topic let's uh starting with uh with some some industry head Well, the stock market was uh not happy with tariff talk again yesterday.
>> Well, I Yeah, but it dropped like what, 900 points, I believe. >> Yeah. >> Um which okay, it's a drop off, but I mean we don't see the days of these massive swings back and forth anymore. you know, 900 points was a lot back when the NASDAQ was 10,000.
It's kind of not that much when it's like wherever it is these days. So, um yeah, I between that and what was it like eight people from Europe, eight troops from Europe landed in Greenland and stayed for 36 hours as a counter invasion force and then they left. So, I you know, it's uh who knows what's going on. Um, but I I I think that in 2026, we can expect even more disruptive type stuff than we saw in the last I don't know, five years, six years.
>> Yeah. If if nothing else, just for the the optics, Chris, right? It's just it's all about the optics. >> I mean, love them or hate him, I think Elon Musk, like last year, he came up with some new rule that like the the most ludicrous response is the most likely or or whatever.
So, um, you know, whatever whatever is going to generate the most social media traffic is the most likely outcome. >> Yeah. Yeah. Yeah.
Exactly. Exactly. So, let's see. That happened um on the jobs front.
Got some uh got some, you know, news uh from December. The numbers came in from December uh saying that uh private payrolls actually grew last month. Um, so that kind of that was before the the tariff talk kind of helped uh ease some labor market uh concerns. But there's some interesting numbers in this report from uh from ADP.
So it says that US companies added 41,000 jobs uh last month uh after decline in November. But um the ones that occurred the losses were uh in the in the in the areas we we care about Chris. So, uh, professional and business services actually lost 29,000 jobs. Information services lost, uh, 12,000 jobs.
The gains were, uh, from education, um, and and healthcare and, uh, Davos is going on right now. And, you know, no surprise, all the talk is about, uh, AI, right? So they're talking about AI um being the main factor behind about 60,000 US job cuts uh last year, Amazon, Salesforce stuff we've talked about here. Um and more and more more and more anxiety from uh uh workers.
Uh so the guys in Davos are talking about, you know, potentially 40% of of jobs being affected by AI. uh a study done uh this past week from Randstead said that 80% of employees are uh concerned about the effects of AI on on their job. So uh it's likely the number is somewhere in between those two, but uh either way makes for some interesting interesting uh workforce drama. >> So I I was apparently I I was actively being talked to about coming over to Dallasos, but we couldn't get my security stuff done in time.
Maybe next year. Um the uh you wrapped up a whole bunch of stuff there, but I I also saw in conjunction with about 41,000 job uh growth last month. That's we have to remember that's that's December. That's where seasonality, you know, the holiday shopping season generally brings in a couple of million additional people to work.
So that's I think partially indicative of we do a lot more shopping on Amazon than we do at malls. Um and so that that hiring drops off substantially. But there's also as you mentioned like a structural piece there. Um a lot more of the job losses in highpaying professional uh you know productive type roles as opposed to and and it's not to imply like education or healthcare are not productive but they are more serviceoriented and not output generating right.
Um so so that's that's a significant challenge. we're we're seeing economic growth in parts of the of the of the economy that aren't necessarily productive. Um, and that's that's a real challenge. The other thing, and I don't know if you saw this, but both Macy's and then Delta Airlines just made some releases for their annual reports, and they've both noted a dramatic increase.
They're saying that tremendous stagnation in their business in general. And the only place that both of those companies are seeing any growth is in the premium side of what they do. So this this leads to the K the K-shaped economy where if you're if you're uber rich, you're in the top 5%, you're living life on easy street, you're taking exotic trips all over the place and and so forth and and buying really expensive stuff. And if you're at the lower end, uh you got nothing and and and you're on the verge of bankruptcy, etc.
, etc. And I mean that's very worrying. It's great if you're in the top 10% and you can stay there, but for everyone else uh there's a severe pinch going on. And I think it's being reflective in a lot of the numbers that are starting to come out reflective of what happened in 2025.
>> Yeah. And that that's the other topic related uh some of the stuff I was seeing coming out of the Davos uh uh conference, right? is is this, you know, building discrepancy between, you know, the top and the and the and the and the low, right? Um the the the kind of middle uh of the road being eliminated.
So, uh and a AI being, you know, one of the driving factors uh there. So, yeah, there's a lot there. Um you know, I I there's also some other conferences going on so or have gone on. tees wrapped up uh earlier uh this month and um you know kind of what I expected.
I mean it seemed like most of the conversation was around um you know kind of the same stuff AI powered everything um devices getting slightly better cameras and stuff. Um, but the one the one thing that kind of uh jumped out at me um was the the the agentic AI stuff kind of coming to to front and center that and um uh kind of digital twins uh being something that's talked about more mainstream than you know us just talking in these uh uh roundts that we do. Chris >> Digital Twins is back again.
That That's so 2018. >> The 20 2019 Wow. >> Um, yeah, digital digital twins. I I was doing digital twins of the space station back in 1993 with mathematical models and stuff.
It's not new. It's just new marketing. Um, and then yeah, CES I saw they're um people are now starting to wonder if we should put aic AI into our children's Barbie dolls. my general response is probably not a great idea if if they're convincing kids to like kill themselves and so forth.
Um, but you know, and then I saw some spoof which was it was legit. Someone had come up with an AI enabled pen or something like that. So, you're going to see it everywhere. Does it actually mean anything?
Is it anything beyond branding? Probably not. Um but it's uh Sia um I was just commenting on LinkedIn earlier today. He was making the comment that uh AI is not going to make it so to speak if uh if more people don't adopt it.
If that's not an admission of guilt, I'm not sure what is. Um, and then I don't know about you, but my my computer at home just got the update pushed and now I have co-pilot all over my machine and I'm trying to kill it off as quickly as I possibly can and I think it's down 700 different men sub menus to find out how to turn it off. Um, so it it it's they're not generating revenue. They're they're burning what was I saw something like $2 million an hour or something like that um in open AI.
At some point you got to say, "Okay, we can't do this anymore if we're not making any money at it." And I and I I've been predicting for several years that 2026 was going to be that year. And I'll I'll stick to my guns on that. >> Yeah.
So, there was some survey data that came out at CES saying uh 77% of global enterprises and 92% of large enterprises have shifted AI strategy from efficiency to growth. um with uh a quarter of them expecting a 10% revenue uplift uh in the next year. Um 35% organizations are uh making Agentic AI their top priority. Um, and Goldman Sachs came out saying that, uh, I think this is to your point, Chris, um, that large tech companies might only realize about half the profits that they need to justify their current AI uh, capex.
So, that's um, that's alarming. I you know, it's it's funny some of the things you mentioned and and there's few things that scare me more than a AI Barbie. I just watched that Twilight Zone over New Year's about the the talking Tina, the the doll. Have you ever saw that?
>> Was it Freddy? What was what was the little little little the little toy kid in like the horror movies from the 90s? You know, it's it's you're just asking for trouble. >> I mean, I already my daughter already has a doll that does like eye tracking and it like turn the head turn.
It's really weird. Anyway, um yeah, don't want that. You know, it's interesting too. You know, I've been on some calls over the last couple weeks where um for the first time that I can remember AI early on was, you know, critiqued as being kind of voodooish, you know, the blackbox thing.
Um but it was still exciting and aspirational and innovative. Um this this month I had my first call where somebody was talking about AI in a business use case context uh not just you and me talking context uh where AI was used as a as an actual negative where they were like you know I don't um want everything to be AI right um you know there's certain things that just you know don't need to be AI and in fact there was a second conversation that was related to that one I can't mention the company but you know They were basically saying they're they're not sure they want to use AI in their messaging anymore even though they do have an AI solution because it's perceived as less valuable than it used to be.
Right? In a world where people have chat GPT at their fingertips um you know something that's not human driven that's AI created is being perceived as cheaper >> than uh higher value. I inevitably so. Um, and and you know, not to toot my own horn, but I haven't I've been saying this for 12 years.
Like I'm I'm tired of pointing out the what to me strikes me as the blindingly obvious. But we saw this with RPA. We saw this with cloud computing. We saw this with all of these things.
Um, and we persist in refusing to learn from our from our history, so we're doomed to repeat it. Um, I think I I I actually, you know, I come off as super negative to AI. I use it actually quite a bit, but I use it to check my work. I use it as a as a overeager, widely read, pathologically lying research assistant.
And as long as I contextualize it like that, it's not bad, right? Um, you know, when when my company, we came up with our we redid our whole business plan. I said, "Okay, have chat GPT cut down the word count by 20% without changing context." It did it and it did it in much of the work.
It did a great job. in some other key areas that completely screwed up. So, you always have to babysit. You always have to double check it.
But the idea that we're going to have freerange chicken, freerange agents running around like making decisions for you and so forth is beyond preposterous. Um, so, so the use cases, this is just again, as you and I saw with RPA six, seven, eight years ago, in specific use cases, in specific ways, it can be very useful. If it's not the right use case, it's going to destroy value. it's going to mess up what you're doing and there is no possibility of an ROI and as long as we're being very upright up upfront and sober about that evaluation of the proper use case you're going to get some value out of it but it's it's a tiny fraction of what people are proposing these days.
>> Yeah. Yeah. uh NRF uh going on and uh the big news that came out of that was a partnership between Walmart and Google um around AI building a shopping integration with Gemini uh and a new protocol aimed at becoming the retail industry standard for uh AI agents. So uh what's interesting about this is a couple things.
First of all, I can't imagine a a a partner where Walmart, uh, Shopify, Etsy, Way, Wayfair, and Target are all using the same platform, which gets into, you know, how do you again, how do you differentiate and all all those interesting uh questions, but it's already being rolled out. It's been developed according to Google with with all these uh uh stores, retailers, and about 20 other lesser uh known smaller uh retailers. And the and the idea is to create a native checkout button within Google AI mode and Gemini products where the LLM will actually be able to complete the checkout process for you without ever having to go to their website uh but also upsell you also make suggestions um on other things that you can uh you can buy.
So you got a couple things there, right? You got the AI experience thing, AI making purchases, AI um disintermediating where you don't even have to go to the retailer's website, never mind their store. Um uh uh trying to make upsells and stuff, but you also have this huge disruption potential for the the customer experience agency as a whole, right? I mean, if this is going to be, you know, native on on websites that every consumer has access to or not even websites on the web with using tools that every consumer has access to.
Um, that's a big shift. I I have a whole other problem with this. Okay, we're going to make it dramatically easier for you to spend what little money you have when you can't get a job. If if you do have a job, your salaries are going up like 1% a year when you're facing 20 to 25% real inflation.
I this is squeezing blood from a stone. How you're laying off all kinds of people, but then you're you're trying to get them to spend money. At some point, this doesn't work. And I don't understand how people don't get that.
It's like and and you know, I worked for Dell and so forth, which is all about cost cutting. You cannot cost cut your way to greatness. So um you know you you can stay alive, you can be more efficient, but it's not making you more effective. And those two things are generally mutually exclusive in the business world.
So the qu and and you mentioned a little while ago, well people are now trying to improve product or improve revenue, not just cut costs. I'm like if if if you're not if you're not growing, you're dying. And so I again I feel like a lot of this is trying to get blood from a stone. Your your customers can't get jobs.
They're losing their house. We have consumer debt higher than ever and you're going to get them to consume more. At some point, you got to say we got to we got to like address some serious problems here and and the way you're using the technology right now ain't helping. >> Well, not only not only are they going to make it so much easier to spend the money, but uh they're they're revamping the uh early drone delivery program.
So, uh Walmart's going to be um uh expanding drone deliveries, uh starting in in LA and and Miami. So, Chris, look up, man. What you >> Well, I mean, I have my drone, so apparently I got to, you know, start engaging in anti- drone warfare in my own in my own front yard. Um great, you know, so I I can get more crap even faster.
Um is is that really giving me a better experiences? Is is improving my life? One of one of the challenges of constantly improving in this way is that is that we're programming people to expect it. You know, do you remember when Prime first came out?
People like, "No one in the world is going to want same day delivery. That's ridiculous." Or when FedEx came out, who needs a letter overnight? That's insane.
It'll never work. And now you just build that expectation on people's parts and what do you mean I have to wait a day and a half to get something I want. So, you be careful what you wish for. I've always been a supporter of it, but I gotta say I I finally drew the line myself as a consumer with uh overnight delivery.
I'm like, I don't need it that badly that I can't wait until tomorrow afternoon. Um the overnight delivery thing. I'm like, I don't want some strange per who, by the way, they're in in like personal vehicles, right? Showing up to my my door in the middle of the night.
Um, I can wait till 3 PM the next day when the the big blue truck that smiles at me comes down the road. But, um, yeah, it's that that and um, as a technologist, I think this is amazing. But from the practical standpoint, you know, this whole uh, Amazon can open your garage door or your front door and leave a package in there. I mean, I guess I'm I'm I'm fortunate.
I don't have the pain of it. I'm I'm in the suburbs and and thankfully don't have a an issue with people stealing packages. I guess if you do, it's a necessary evil. But, uh, yeah, man.
I I draw the line at at overnight deliveries and somebody opening my garage that I don't know. >> Well, and and you know, I I I help build these algorithms and make these systems and all that kind of stuff. So, I I I I know what we're doing. But, you know, a very direct example, I think, it was last week.
I needed a part for my motorcycle. And so, I'm on Google and I'm looking it up and where can I get it? Then they hop over to Amazon. Instantaneously there's a deal on not the part but the tool you need to install the part and you can get it same day and blah blah blah.
I mean the level of surveillance that's going on is is staggering and we all just kind of whistle past the graveyard as it's going on. It's great because okay, you know, I got the tool that I needed and the part that I needed for and probably save 50 cents. It's hugely convenient. But at what point can you turn that and and this is a rhetorical question.
Can you turn those to actually make you buy stuff that you don't want or don't need? Of course. Right. And that's what the companies are doing all the time.
So the idea that I'm also going to give up personal agency and making the decision on those things where I'm already being manipulated to buy anyway and hand it to an agentic AI that's going to buy on my behalf. What are you gonna do when you when you throw your agent out there and you get 400 what is it cinnamon roll the new toy that like my one daughter wanted you 400 cinnamon rolls delivered to your door >> because the agent went nuts and all of a sudden you know your bank account is zeroed out and you and your credit cards are toast.
What do you do then? And and it's not a question of if it's a qu question of when. >> Yeah, I'm on the fence I'm on the fence on that one. I mean these are not new problems, right?
their old problems with more access and more scale than they used to, right? I mean, >> problems amplified, >> right? Amplified. You know, I'm always back to the I always get back to the gambling example, like should gambling be illegal, right?
Um but I you know, I think what happens though is that people it's moving so quickly, the access is so good um that it's moving at a pace where people can't become educated and and keep up with it. Like I noticed even in my own Amazon um because I always have an order coming to me at all times um now there's like a blue add this to my order button. So you don't even have to check out anymore. It's literally making recommendations and it's a single click to add it to an existing order that's already coming.
No checkout process. Um Amazon got some got some heat over the holidays. They've got a new AI feature that they're uh testing out where uh based on what you're shopping for, there's a buy for me feature that was purchasing goods from third-party websites. So, these are people that are not even on Amazon, not Amazon marketplace, not Amazon um um fulfillment.
These are completely separate third-party businesses that um never signed up with Amazon. And Amazon's AI was placing orders on behalf of Amazon customers for these people, which you know, at first glance, I'm like, that sounds great. Why were they complaining? But, um, it was making mistakes.
And so now you have a vendor, small momand pop business with a bunch of cancellations on orders that >> that they were market or promote and couldn't fulfill. >> That's the amplica. At the very beginning of my career, you know, you'd make a nut that had to go on the spaceship and and you allowed a thousandth of an inch of error in the in the design, but as you accumulate those errors, failure is is is mandatory. It's just a question of time.
And now we're doing things at scales of trillions and billions and so forth. So when when it goes wrong, it's going to go horribly wrong for a lot of people. And that's just math. I mean, there's no way around that unless we build in a degree of of resilience in these systems that prevents that.
And I don't see a lot of people being, you know, very cautious about that. You're the EU just released another set of AI guidelines and so forth. And I'm going through it and a lot a lot of people are talking about it online and I say the the worst thing you can do is implement rules or laws or regulations that are unattainable and uninforcable. And that's exactly what they're doing.
you know, it's like it's so I'm not really I I I again I think a lot of a lot of cold water is going to be thrown in the face of people in 2026. We a degree of reality is going to come back to this. It's going to be wonderful for a a range of use cases, but not nearly the number of use cases that we need. and someone's going to have to have their Sony moment or their, you know, when when something goes horribly wrong and it really hurts the company, we're going to have to have three or four of those happen this year before I think people are going to say, "Whoa, maybe we need to think this through a little bit more clearly."
We'll see. >> I I I actually am at a new point. Maybe it's cynical, maybe it's revolutionary. I I don't know.
But I I I think we're at the point where it's almost like we don't care. And I'm not saying it's a good thing and I'm not saying that there's not downsides, but you know, I I think the way these companies look, Amazon in this example, they look at it as the upside is so tremendous that we'll deal with the ex the what's the term we used to use the digital exhaust. We'll deal with the digital exhaust, the lawsuit, the we'll deal with that stuff later because the potential upside uh is just is just so huge.
I mean, you see what's happening with I mean, for Amazon to start going to third parties that hadn't any I guess these are like Shopify stores, local merchants or whatever, uh, and start putting orders and even if they got, you know, a whole bunch of returns, they don't they don't care because they're just they're just printing money. Um, and they'll figure out the, uh, you know, the how how many how many uh, souls they they uh affected later on. But, um, and that's the problem, right?
there there's just little checks and balances which is a good segue I love good segways Chris uh to our main topic today which is the agegated internet and digital rights. So bear with me here because when I when I spoke to my colleague over here about doing this topic she goes are you really going to do an entire episode about porn? And I said to her and I I I laughed a little bit because that you know that is the first kind of implementation of a lot of this stuff. But by the way it's the first implementation of a lot of technology right I mean the internet video technology right >> every technology we know of the Gutenberg press when we brought we brought Chinese printing press technology to the to the west the first thing they printed was Bibles the Gutenberg Bibles.
The second thing they printed was porn. And and this is true of nearly every every communication technology humanity has ever come up with. We first do religion and then we do porn. It's just that's just the way it is.
So I'm not it doesn't surprise me in the least. >> So that that was the you know the the that people kind of see this as. But if you if you really look at some of the laws uh regulations and conversations that are going on though, it's about more than that. It's it's about access to quote unquote harmful online content and you know you get into this debate again uh which is a different conversation but what is deemed as harmful right is is a is a website about >> what's that >> it's in the eye of the beholder >> right you know so now you're restricting the internet based on what whoever is in power or whatever entity decides you know is harmful as we've learned concerned about, you know, in our own US politics here for anybody not in the US, like there's literally states that are banning books right now because the books, the children's books because the children book uh is in theory projecting an idea that that state doesn't want, you know, projected.
So when you get when you're getting into these level of niche rights uh and access restricting access to things, that's a book in one state. Imagine restricting that information uh across the the web. And it's already being implemented. So half of half of the states in the US um plus the UK and Australia uh as of the time of me putting this together are rolling out laws that are requiring age or ID verification uh for access to porn, but also anything that they deem as a as a harmful online site, which could be depending on the government.
Hey, you're doing protests, right? you're doing uh it's violence, it's gaming, it it could be any of these things, right? Um and they're requiring here here's the crux of it. They're requiring often uh the use of a third-party service that's going to collect this data, your ID, your face scan or whatever.
Um can't imagine there's going to be any issues with that. I knew that. I I knew as soon as I read that I'm like, "Oh, Chris has got to co-host this show because he's gonna he's going to jump all over that one." >> I've just been in the space for quarter of a century.
Um, it's not enforcable. I mean, someone's, you know, age verification. You click a button, who who really knows? You can always spoof that you're someone else.
And then, as you're pointing out, harmful is in the eye of the beholder, and it's contextual. So, the the number of pe there's now millions of people that have an online AI boyfriend or girlfriend, and it's shown that this completely messes them up mentally. It messes them up socially. They get completely ener with whatever this this fake AI that they think is like an intimate partner to them.
They desocialize with actual humans and these people are starting to kill themselves. So So what what harm is it that we're looking at? Um you know with with porn in particular there there's you know it's harmful in the consumption, it's harmful in the creation. Like one in one in five American women under the age of 20 are on Only Fans or something insane like that.
um is that is that the kind of society we want? So, it's it's performative, unfortunately. It's not really enforcable. And then and back to the EU AI example, like if you're going to make a rule that you can enforce and no one can really make sure you follow it, it does more harm than good.
So, the um I I think it's safe to say that this has really good intent. As a parent, I would like to control some of that stuff, but that's on me. the state the state shouldn't be controlling that for my children. I should be controlling that for my children.
Um to get back to your point of well who decides what's right and wrong. Well, theoretically that's my job if I'm a good parent. Um so lots of challenges there. It's not going to be effective.
It's going it's a little bit of long time ago when when TSA came in and threw in all these extra cameras and extra people at the airport. Back then we were calling it security theater. It was performative. I think this is a further example of that because at the end of the day, you're not going to stop that stuff.
Slowing it down arguably is a good thing, but we need to not convince ourselves that this is this is the proper way of of solving the problem. This government sponsored filtration. It's not going to work. >> Well, way to bury the lead, Chris.
You gave the solution before we even uh expanded on the problem. But no, you're right. You're 100% right. I mean, that is the punch line, right?
I mean, at the end of the day, it, you know, if you're a parent, you got to be more, you know, more vigilant and and um it's on you. And it's back to like the gambling thing, right? If you want to, if you want to gamble and, you know, go to a slot machine once in a while to let let loose a little bit, drinking, any any of these things, right? You know, you moderation, education, you know, all of those things.
But, um, you know, like you said, there is there is some good intent here, right? not just about, you know, harm, you know, what's what's obviously harmful or, you know, depending on the eye of the beholder, what the general population thinks is harmful. It's also just social media, right? So, in Australia, uh, it was it was social media under the age I think it was under the age of 16.
Um, and so, yeah, there's some there's some validity to that. I mean, there are some simple scenarios where you could say, okay, this is obvious. Let's just let's just block this. But I think it's becoming I think it's becoming less and less obvious what's what's harmful, right?
And and it has to do with culture. It has to do with I mean I'm sure that uh our friends in Saudi Arabia would have a different perspective on what you know people in California think is harmful, right? So So now you got to police it that way. And then it's that there's that unavoidable problem, right, of hey, I'm in one state.
Um what do I do when I move to the next state? It's it's a completely different policy. And part of the part of the issue here I think and this is kind of gets back to tech strategy if you will. Um the agegating um uh uh regulation is kind of pushing the idea to me that the internet should be by default restricted.
Right. It's that zero what you guys call it in the security world a zero confidence or or what have you. Right. You assume the person is bad first.
No. >> Right. And then they have to prove that they're not. Um, and then what's the burden of proof?
Like today it's a privacy issue. I don't know if I want to upload my license to watch porn, but at some point what's how many hoops am I going to have to jump through to get access to information? Um, controlling access to content has been around for a very long time. When you and I were growing up, we we had to be 17 to go see an R-rated movie.
And if you recall, an R-rated movie from the 80s pales in comparison with just like the latest series on Netflix. >> Dude, I made the mistake of watching a PG-13 movie with my 10-year-old and I'm like, PG-13 has changed. >> It's not what it used to be. Exactly.
So, so you know, what we deem acceptable or not changes with time and culture. Um, and to your point about Saudi Arabia, they have the exact same problem over there. You know, their kids are getting on WhatsApp, their kids are getting on Facebook, etc., etc.
, and and you can try to control it, but um you know what's the worst thing you can tell to tell a a teenage kid is you can't do this or you can't do that. It makes it the first thing they're going to go and try to do because who are you to tell me? Um and and and so part of that is they have to learn themselves. Again, I have a real problem with implementing the implementing things that with the best of intent they they aren't operationally real reality.
You can't make it really work in principle. Well, no. You you you can make it work in your head. Hey, we'll just limit who can who can access this stuff.
They have to click a button that that says I'm 18 or more. But operationally, it just doesn't work. And so, it sends completely the wrong signal to people that again, it's just performative. It doesn't really work.
And then inviting people to ignore any other controls you attempt to put into place. So there's no easy answer, but I think part of it is whatever whenever you're going to put in legislation, regulations, any kind of controls like this, get beyond the emotional I feel like we need to have this because it feels like we need it and can this actually work in the real world because if it doesn't, then you're actually harming people more than you're helping. >> So you got the privacy thing.
Obviously, a lot of activist groups are calling this censorship, right? They're calling it a violation of privacy. Do you want a government or a third party, which, you know, by the way, these these companies have proven that, as you've always said, Chris, um it's not a matter of if they'll be hacked, it's a matter of when they'll be hacked. I mean, people had uh I think the entire user list of that Ashley Madison affair website was released at one point, right?
So, you gota you got to assume that it's by default it's going to be, you know, exposed at some point. So, um that's not great, right? Um, so and and then you have this issue also in the US of, you know, h how do you how do you regulate this on a state-by-st state ba? How do you enforce this on a state-by-state uh basis?
It's reminiscent of um what they did with gambling, right? At first, gambling was illegal and um in a lot of states, so you had to like be physically in a state to access online gambling sites. I don't know if that's still the case, but um so there there's some interesting tidbits though uh on a state-by-st state level. So New York has a um a safe for kids act that requires social platforms to restrict algorithm algorithmically personalized addictive feeds and nighttime notifications for users under 18 unless a parent opts in.
So they cannot see algorithm based feeds. They can only see chronological or nonpersonalized feeds. According to this this that was in 2024. We're in 2026.
I'm not sure if that's been implemented. >> So So having seen it having given this presentation hundreds of times all over the world, can you give me a better admission of guilt of what you're doing? >> Reread that again. Read the first half of that again.
algorithmically personaliz manipulate you >> if you're if you're under 18 without your parents approval. So what do you think they're doing? Why do you think Fang is worth $20 trillion? Why do you why can you not put down your phone and you're doom scrolling like six hours a day?
They're flat out telling you, "Yeah, we're screwing with you, but we're going to make it so you have to give permission if we're going to screw with your 18, you know, your kid under 18." I it's it's hilarious looking at these regulations and they're just outing themselves completely. >> In Florida, uh the Social Media Safety Act last year, effective last year, requires age verification for all users and bans accounts for children under 14. If you're over 14, it requires parental consent.
Um will be enforced by state regulators. I'd love to know if anybody's in the in Florida. I'd love I'd love feedback on on how that's working. Um I mean again I like I like it in in in general.
Like I don't I think I think that's an easy line. Like if you're under 14, you shouldn't be on social media. If you're 14 to 18, you know, it's kind like um I don't know. Is it still legal to get married under 18 if you have your parents' consent?
I don't know. That's an old law, but um something like that. >> By state and vary state by state, >> right? Yeah.
Um I I would love to see the enforcement agency that they have and what are they doing and how are they enforcing and what are the penalties if someone violates and if there's no penalty then what does violation even mean? Yeah. It's goes on and on and on. If if if you if you say there's a speed limit and nobody follows the speed limit and you don't punish people for going over the speed limit, is there really a speed limit?
>> Well, this was this was the issue with with COVID with the masks, right? where, you know, restaurants were like, >> "Who's in who's who's going to enforce this?" And they they didn't have enough people to enforce it. Eventually, it became like the Department of Health and they just made the they made the penalty so high that the chances of you getting caught was very low, but if you got caught, it was going to kill you forever, so they just did it.
Um, so it's more like the fear of getting caught, but but you reminded me of something interesting, which was actually this like coalition that all the pornography websites put together. Um, and interestingly enough, I I kind of agreed with what they said. They said that the problem with this policy is that it's not enforceable to your point um in its entirety. So, what's going to happen according to them is that all the big players will have to deal with the policy because otherwise they'll get shut down.
Um, and it it's a major deterrent for people to go to the big sites. So people are going to start going to some of the smaller sites that fall under the radar of the regulators which are actually less strict in general and more dangerous and promoting even worse dark web types of things. So you're inadvertently actually creating a worse situation um because you're you're you're you're penalizing the big guys that are you know maybe you don't think they're doing enough but you that are doing something and you're pushing people to you know the the longtail of guys that you know they're small enough they don't care if a regulator is never going to find them get get that go after them.
>> Say how how well did prohibition work in the 1920s and 1930s? How well did the war on drugs and just say no work out? And that and that and that does not mean you don't try. But you again something that sounds good in principle but is not enforceable in reality is just inviting more problems.
Exactly as you're saying. So you're going to if if people are going to consume this stuff, you know, all of the vices, alcohol, drugs, you name it. Um there's some benefit in having that stuff somewhat centralized and under some degree of centralized control. And if you don't, you're just, you know, you're going to have a whole bunch of alapones of porn out there making like their their own little sites to your point that are going to be dramatically worse than anything else you have and are going to fall underneath the regulatory radar.
Um you know, and I'm sure you've experienced it. you're on the highway and you know one speeder gets pulled over and everyone you know the people that didn't get pulled over are laughing at them and the person that did get pulled over said hey everyone else is going as fast as me why my pick so it the selective enforcement thing never leads to good results >> yeah you have the you have the enforcement issue and then and then you just have like good oldfashioned loopholes right I mean uh in in in in the US I'm sure you know throughout Europe it's it's fairly easy to just grab a VPN and change your location if it's a location based thing.
Uh um there's browsers, you know, out there now that route traffics through anonymous nodes and obscure location and identity and and stuff like that. Um and then by the way, here's another one back to that zero trust thing. If you use one of those browsers or VPNs normally just to protect your privacy, now you won't be able to access certain websites because a lot of these websites, what they've said is, you know, uh, I don't want to pay the fine because you used a VPN and and circumvented the system.
So, we're just going to pull out. I know some of the porn sites have done, we're just going to pull out of that state or we're just going to pull out of this. Uh, so if you use a VPN um for a legitimate reason, you just can't access our our resources anymore. So, you got that.
But the Australian thing was a perfect example what you're saying. I mean, literally within a week of that law going into effect, um, parents were reporting like they couldn't find their their IDs, their licenses, because kids literally went downstairs into a pocketbook, uploaded the the license, the ID, and and got in. So, um, you know, it's it's not it's not it seems to me that it's, you know, good intent, like you said, good intent, but uh not completely uh thought out yet.
And then you got Grock just public platform. Um, now just doing undressings of of of people like it's it's out of control. >> Um, yeah. What is is talking about the idea things like I I would know nothing about trying to circumvent those kind of controls.
I was never a teenager, right? I'm sure you you weren't either. So, you know, it's not like there's any motivation for that. Um, it's good to have good intent, but it needs to be backed up with the degree of practicality.
Otherwise, you are undermining the the the authority that you've been given to have those kind of controls. And there's no easy way around it. Um, but I think that's our challenge is we slippery slope into easy what we hope are easy solutions and we end up making harder problems. That's the aenic AI stuff in a in a nutshell.
We're going to make it easier for you to shop. No, you're going to make it easier for me to lose every penny I have in my bank accounts and every dollar I have in credit. while I have 400 Barbie dolls on my front porch that I didn't really order, but someone did. So, um, you just you have to understand the downsides of these things and protect against it.
I always go back to my early training in spacecraft. Bunch of people were trying to get us to Mars. I was trying to make sure we don't blow up along the way. And it kind of makes you come off as a bit of a party pooper unless something goes horribly wrong.
As a reliability engineer, I said the worst thing you can be is well known. And and you know it only gets worse, right? Because um you know there's a report uh the e safety commissioner had a report I don't know who that is but uh e e safety commissioner reports that 80% of 8 to 12 year olds um trying to use platforms like YouTube and Tik Tok uh found a loophole a way of getting around these ban these before the ban even started. So, I guess this is like parents proactively restricting stuff, using software, whatever.
80% figured out ways to circumvent these bans, uh, these these things. And this isn't without AI, right? Who do you who do you think is going to be better at using AI to get to access to something they really want to get access to that their friends are on or whatever? Who do you think is going to be better at that?
the 80 year olds who were litig leg legislating this stuff or the 16 year olds who had AI involved in their life since they were born. >> I it's not even it's not even close. Um and and and those kind of workarounds there's tremendous motivation to make those workarounds. So so there'll always be there and um and then it gives people a false sense of security that that's the real challenge here is the false sense of security that this provides.
So then you become less vigilant. You become less active. >> I don't have to parent because this thing is got this thing's got my back, right? >> Yeah.
Um so you you you you are actually enabling the bad behavior because you get people to to lose their sensitivity to it thinking that everything's fine because I turned on this monitoring thing. And no, it's it's um >> you know what the best long-term pain >> the best the best system was? The best system was um growing up when I had one computer in my house and it was in the freaking living room and there was always somebody walking past my shoulder who could see what I was doing, right?
I mean, that was or or the or the telephone thing. I told my kids this week, I'm like, you know, when I was a kid, if I wanted to call a girl, I had to call her dad on the only telephone that they had in their house and talk to him before she would he would put me on the phone with the girl that I liked. >> Well, and then it was it was a hardline phone on the wall in the >> They knew what room you were in, right? in the kitchen with a 20 foot long extension cord so you can sit at the far end of the dining room table and you're, you know, you're talking to your girlfriend while, you know, mom's making dinner 10 feet away.
I mean, >> hear at least half the conversation and and use her own uh internal algorithm to figure out what was on the other half of the conversation. >> I that, you know, I had the wooden spoon spoon smacked up against that headset more than once. So, yeah, I mean, it's active participation. It's um this is when we're talking specifically about children.
We can't treat children like they're a Birkinbag. They're they're not there for content on Instagram. They're your kids, right? And you have a responsibility to raise them.
The uh it shouldn't be easy. It shouldn't be convenient. It should require attention and effort. Um and things that take away from that and give a false sense of security.
I It's just a recipe for disaster. >> Yeah. Crazy. Crazy.
Well, good show, Chris. >> There'll be a AI babysitters coming out any day now, and it it'll be fine. Don't worry. >> We won't even have to talk to your own kids anymore.
That's okay. >> Uh interesting stuff. I thought this was a very interesting topic. It hits business, it hits technology, it hits humanity.
Uh so, I think it's interesting. We'll keep an eye on these uh these regulations and uh how they play out. If you know of any tools or technologies out there or you have any feedback on how they're being used in your particular location, uh definitely let us know. Um if you're looking for help or advice, uh uh Chris and the team run really great workshops and uh uh feedback sessions, advice sessions.
Uh so uh let us know. And if you're on the vendor side and you're looking to promote something that you're doing, uh we've got a bunch of uh vendor uh subscriptions available. uh herai.org.
In the meantime, we'll see you next Wednesday. Thanks, Chris. >> Take care, everyone. Thanks for having me.
>> Week take care.
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