AI Scaling Challenges, Market Shifts, Security Innovations, and Energy Supply Issues for Tech Firms
11/13/24 • 16 min
Significant challenges are being faced by companies like OpenAI as they encounter scaling plateaus in developing new large language models. Host Dave Sobel notes that AI researchers are advocating for innovative training techniques that mimic human reasoning, suggesting a shift in the competitive landscape. OpenAI's latest model, O1, employs a technique called test-time compute, which allows for real-time evaluation of multiple possibilities, potentially enhancing performance and altering the demand for AI hardware, particularly NVIDIA's chips.
The episode also delves into the mixed sentiments surrounding AI-capable PCs. Despite a notable 49% growth in sales, these devices only represent 20% of the market, with many channel partners expressing skepticism about their value. A significant portion of IT decision-makers remains hesitant to trust AI for autonomous decision-making, reflecting broader concerns about security and ethical implications. Sobel emphasizes the need for clearer value propositions and better education to promote AI-capable PCs, especially as the industry transitions from the hype phase to a more normalized adoption of AI technologies.
Sobel highlights the increasing focus on cybersecurity as CrowdStrike launches its AI Red Team services to protect AI systems from rising cyber threats. With the rapid adoption of AI, risks such as model tampering and data poisoning are becoming more prevalent. The episode also touches on Microsoft's recent issues with unexpected upgrades to Windows Server, which have left some users in a difficult position, and the company's efforts to enhance its update procedures.
Finally, the episode addresses the energy challenges faced by tech companies, particularly Amazon, which had its request for increased power supply denied by regulators. As demand for data center power is projected to rise significantly, Sobel discusses the potential for partnerships with nuclear and renewable energy providers to ensure stability and sustainability in energy supply. The episode concludes by emphasizing the importance of energy efficiency in data center operations as companies navigate regulatory pressures and seek innovative solutions to meet their energy needs.
Four things to know today
05:21 AI's Channel Opportunity Grows, But Skepticism Toward AI-Capable PCs Highlights Industry Trust Gap
09:01 CrowdStrike, Microsoft, and Box Drive AI and Security Enhancements Amid Rising Enterprise Demand
13:01 Amazon’s Power Request Denial Signals Rising Challenges in Data Center Energy Demands
Supported by: https://www.coreview.com/msp
https://getthread.com/mspradio/
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Significant challenges are being faced by companies like OpenAI as they encounter scaling plateaus in developing new large language models. Host Dave Sobel notes that AI researchers are advocating for innovative training techniques that mimic human reasoning, suggesting a shift in the competitive landscape. OpenAI's latest model, O1, employs a technique called test-time compute, which allows for real-time evaluation of multiple possibilities, potentially enhancing performance and altering the demand for AI hardware, particularly NVIDIA's chips.
The episode also delves into the mixed sentiments surrounding AI-capable PCs. Despite a notable 49% growth in sales, these devices only represent 20% of the market, with many channel partners expressing skepticism about their value. A significant portion of IT decision-makers remains hesitant to trust AI for autonomous decision-making, reflecting broader concerns about security and ethical implications. Sobel emphasizes the need for clearer value propositions and better education to promote AI-capable PCs, especially as the industry transitions from the hype phase to a more normalized adoption of AI technologies.
Sobel highlights the increasing focus on cybersecurity as CrowdStrike launches its AI Red Team services to protect AI systems from rising cyber threats. With the rapid adoption of AI, risks such as model tampering and data poisoning are becoming more prevalent. The episode also touches on Microsoft's recent issues with unexpected upgrades to Windows Server, which have left some users in a difficult position, and the company's efforts to enhance its update procedures.
Finally, the episode addresses the energy challenges faced by tech companies, particularly Amazon, which had its request for increased power supply denied by regulators. As demand for data center power is projected to rise significantly, Sobel discusses the potential for partnerships with nuclear and renewable energy providers to ensure stability and sustainability in energy supply. The episode concludes by emphasizing the importance of energy efficiency in data center operations as companies navigate regulatory pressures and seek innovative solutions to meet their energy needs.
Four things to know today
05:21 AI's Channel Opportunity Grows, But Skepticism Toward AI-Capable PCs Highlights Industry Trust Gap
09:01 CrowdStrike, Microsoft, and Box Drive AI and Security Enhancements Amid Rising Enterprise Demand
13:01 Amazon’s Power Request Denial Signals Rising Challenges in Data Center Energy Demands
Supported by: https://www.coreview.com/msp
https://getthread.com/mspradio/
All our Sponsors: https://businessof.tech/sponsors/
Do you want the show on your podcast app or the written versions of the stories? Subscribe to the Business of Tech: https://www.businessof.tech/subscribe/
Looking for a link from the stories? The entire script of the show, with links to articles, are posted in each story on https://www.businessof.tech/
Support the show on Patreon: https://patreon.com/mspradio/
Want to be a guest on Business of Tech: Daily 10-Minute IT Services Insights? Send Dave Sobel a message on PodMatch, here: https://www.podmatch.com/hostdetailpreview/businessoftech
Want our stuff? Cool Merch? Wear “Why Do We Care?” - Visit https://mspradio.myspreadshop.com
Follow us on:
LinkedIn: https://www.linkedin.com/company/28908079/
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Previous Episode
Managed Services Growth, PSA @ IT Nation Connect, PSA Competitors
With a significant increase in global demand for cloud services and data security, the managed services market is expected to reach an estimated $393.02 billion by 2025. Factors contributing to this growth include the need for specialized providers to manage complex IT infrastructures and the rising trend of Bring Your Own Device (BYOD), which necessitates enhanced data security measures. North America leads the market, but Europe and Asia-Pacific are also experiencing substantial growth driven by cloud adoption and digital transformation.
The episode highlights a recent report indicating a slowdown in managed services revenue growth, returning to pre-COVID levels, despite strong profitability for managed service providers (MSPs). The average adjusted EBITDA for MSPs stands at 13.2%, with private equity-backed MSPs reporting even higher figures. In contrast, value-added resellers (VARs) have seen significant revenue growth, particularly in Europe, which experienced a 6.9% increase in managed services revenue. The discussion emphasizes the need for MSPs to adapt to changing client spending patterns as the market normalizes.
Host Dave Sobel also covers the competitive landscape, noting several key announcements from major players in the industry. ConnectWise has launched a Professional Services Automation (PSA) initiative aimed at enhancing MSP success through streamlined processes and improved efficiency. Meanwhile, NineMinds has introduced Alga PSA, a free open-source platform designed to compete with established PSA providers, and SuperOps has unveiled Monika, an AI-powered companion for MSPs that offers personalized insights and solutions. These developments signal a shift in the market as new entrants challenge traditional providers.
The episode concludes with a focus on the growing importance of cybersecurity and the need for human expertise in addressing complex threats. As the demand for AI services continues to exceed supply, the global cloud market has reached an impressive $84 billion, with major players like AWS, Microsoft, and Google Cloud holding a significant share. Solt encourages listeners to consider the implications of these trends for the future of managed services and the evolving landscape of IT solutions.
Four things to know today
Supported by: https://www.huntress.com/mspradio/
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Support the show on Patreon: https://patreon.com/mspradio/
Want to be a guest on Business of Tech: Daily 10-Minute IT Services Insights? Send Dave Sobel a message on PodMatch, here: https://www.podmatch.com/hostdetailpreview/businessoftech
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Next Episode
Cybersecurity Threats, Microsoft Price Hikes, AI in Consulting, and Password Trends Explored
We start focusing on the resurgence of the state-sponsored cyber espionage group Volt Typhoon. This group has been targeting critical infrastructure, particularly outdated devices like Cisco and Netgear routers, and has successfully compromised a significant percentage of these devices in a short time frame. The episode highlights the vulnerabilities in the energy sector, where third-party breaches account for a substantial portion of incidents, emphasizing the need for improved vendor responsibility and proactive security measures.
Host Dave Sobel also covers the progress of the Secure by Design initiative led by CISA, which has seen over 100 companies commit to adopting secure development practices. This movement is gaining traction as organizations recognize the importance of reducing vulnerabilities in software. Additionally, the Transportation Security Administration has proposed new cybersecurity regulations aimed at protecting high-risk pipelines and railroad operators, mandating the establishment of cyber risk management programs and timely reporting of incidents.
The episode shifts focus to Microsoft, which is implementing a price hike on various services, including a 25% increase for Teams Phone and up to a 40% increase for Power BI. This move is part of Microsoft's strategy to align pricing across its services, reflecting the growing usage of premium features among enterprise customers. Sobel notes the significance of these changes in the context of the broader IT landscape, particularly as Windows 11 ISO media for ARM64 PCs becomes available, allowing for clean installations on compatible devices.
Finally, Sobel discusses the evolving role of IT consultancies, which are increasingly focusing on artificial intelligence, data governance, and platform integration as they prepare for 2025. The episode highlights the importance of clean and accessible data in leveraging AI technologies and the need for organizations to modernize their legacy systems. Sobel concludes with reflections on the ethical implications of AI in creative industries, citing a controversial AI-generated interview by a Polish radio station and the positive use of AI in restoring the voice of country music legend Randy Travis.
Four things to know today
00:00 Volt Typhoon Resurfaces with Advanced Attacks on Critical Infrastructure, Exploiting Legacy Routers
02:48 CISA and TSA Cybersecurity Efforts as Secure-by-Design and NIST Framework Gain Ground
06:14 Microsoft's Price Hike Targets Monthly Subscriptions and Premium Services, Teams Phone to Rise 25%
09:32 IT Consultancies Double Down on AI, Data, and Integration as Organizations Modernize for 2025
Supported by: https://timezest.com/mspradio/
All our Sponsors: https://businessof.tech/sponsors/
Do you want the show on your podcast app or the written versions of the stories? Subscribe to the Business of Tech: https://www.businessof.tech/subscribe/
Looking for a link from the stories? The entire script of the show, with links to articles, are posted in each story on https://www.businessof.tech/
Support the show on Patreon: https://patreon.com/mspradio/
Want to be a guest on Business of Tech: Daily 10-Minute IT Services Insights? Send Dave Sobel a message on PodMatch, here: https://www.podmatch.com/hostdetailpreview/businessoftech
Want our stuff? Cool Merch? Wear “Why Do We Care?” - Visit https://mspradio.myspreadshop.com
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