TikTok Turmoil, Social Media regulations + Trump’s return

Episode Transcript (computer-generated)

Paul Spain:
Hey, folks, greetings and welcome along to the New Zealand Tech Podcast. I’m your host, Paul Spain, and great to be joined by Danu Abeysuriya from Rush Digital. How are you, Danu?

Danu Abeysuriya:
Good, thank you for having me.

Paul Spain:
Yeah, well, thanks for joining us. Looking forward to a great show today. Delving into, I think, some pretty interesting news. The world’s been a bit shaken up with a big election result.

Danu Abeysuriya:
Which country?

Paul Spain:
We’ll delve into that. There’s a few bits of local news as well that are well worth drilling into and as usual, some things on the global front. TikTok getting some interesting attention amongst others in the social media world, so we’ll tap into that. But certainly a mix of things that sort of impact us from a business and an organizational perspective, things that impact our personal lives as well, and other things that kind of have a fairly broad reach. So looking forward to hearing your thoughts and opinions, Dani.

Danu Abeysuriya:
Yeah, likewise. Should be an interesting conversation.

Paul Spain:
Yes. Now, big thank you, of course, to our show partners, One NZ, Spark, 2 Degrees, HP and Gorrilla Technology. We appreciate their support of the New Zealand Tech podcast and of the broader innovation ecosystems in New Zealand. So, first up, I was really fascinated reading about this New Zealand firm whose technology has really caught or catching on internationally. They’ve been going since 2011, Mind Hive Global, and they have a new partnership that’s going to see their AI technology being used in Brazil to sort of expand their business with grading cowhides, which is interesting. And I hadn’t realised that Brazil is apparently the world’s largest export market for beef. So it’s kind of interesting, these differing crossovers, but they’ve got something like 20 people and they’re backed by a range of investors, including the Flying Kiwi Angels, Triple M and Snowball Effect. This one.

Paul Spain:
Was this a company you were aware of before, Daniel? You come across them before this recent news?

Danu Abeysuriya:
Yeah, I hadn’t really heard about them until they sort of hit this sort of front page. Yeah, it is really interesting because there’s a flock of companies that were doing AI before it was cool. And I think, actually, interestingly, New Zealand, I don’t know if you remember a company called Compaq Sorting.

Paul Spain:
Yeah, yeah.

Danu Abeysuriya:
So New Zealand, actually, I think that ended up selling to Tomra, which is a big European firm, specifically in fruit sorting. So New Zealand has been doing computer vision related sorting and assessment for a very long time. And actually I remember early days of my career looking for jobs and Compaq was one of actually New Zealand’s kind of stalwart organizations. So it doesn’t really surprise me that there’s some kind of derivative AI that sits on top of agri tech. I think that’s a sweet spot for New Zealand. And Sir Paul Callahan talked about the power of weird niches for, you know, to the common person who’s not thinking about beef stock all day, this is probably a weird niche. Right. So there’s a lot of potential and I think maybe the future landscape of New Zealanders, the next Fisher and Paykel might be one of these AI companies in a weird niche.

Paul Spain:
Yeah, well look, that’s, that’s the opportunity, isn’t it? Because you know, we can all access ChatGPT and these varying tools, but those who can harness AI in a, you know, in a niche where it’s going to provide a whole lot of value and can get in and, you know, and dominate a space, they can do very well. As you know, as we’ve seen in other fields, sometimes it’s, you know, it’s quite niche, niche products that end up doing, doing very well. Of course we want there to be more zeros and you know, 10, $20 billion, I’m not sure. Yeah, probably north of 20 billion now in unicorn family dollars.

Danu Abeysuriya:
Yeah, multi unicorns.

Paul Spain:
Yeah, keep that. Right. But some of these sort of, you know, smaller ones that maybe, you know, fly a little bit more under the radar. There’s no reason we can’t have lots and lots of those. Particularly when you look at the way that, you know, Kiwis kind of think and often, you know, very creative in terms of finding solutions and we don’t necessarily always need the, you know, the big piles of cash that, that some of the Silicon Valley type of startups kind of need. And so, yeah, it’s really, really encouraging to see this.

Danu Abeysuriya:
Yeah, there’s also with artificial intelligence, I think the intellectual property of the future previously has been these things that you build with the way that artificial intelligence works now with these foundation models that are trained on public data sets. Your intellectual property now and probably in the future sits in your private data sets. And so I think these specialty firms that have access to private data sets start to form a unique competitive proposition. And if you think about New Zealand, we’re the largest dairy exporter in the world, I believe. So we have probably the best data set for preferences, Skus value add products as well as business process around dairy and agriculture. So I think, you know, with the commoditization of AI and commoditization of technology, the data sets are going to be the thing that really propels us forward. And I think this might be an example where, you know, even if you gave this image to chatgpt4v, I doubt it would be able to do as good a job because it just hasn’t got access to that many cowhides.

Paul Spain:
So, yeah, yeah, look, I think there’s also, when you think of it in that manner, it’s also a good reminder of how we need to make sure that our data is kept safe and secure. And so the cybersecurity challenges that have long existed and keep evolving and changing need to probably get more attention. Which brings us to, I guess the next news is we’ve learned that the GCSB and I guess, yeah, the New Zealand Security Intelligence Service, together with the Government Communication Security Bureau and the National Cybersecurity Centre, have been working together on security guidelines, particularly for tech startups. I see they’ve got an event coming up that’s targeting the aerospace sector here in New Zealand. So there’s a whole lot of work that’s going on there. And interestingly, this is tied back to New Zealand being part of the five eyes. So this is drawing from previous events and, and information being compiled kind of across Australia, Canada, uk, United States and New Zealand. So hopefully we get some really good results out of that collaboration and it helps give us a bit of an uplift on that front because often for smaller firms, including startups and, and the aerospace sector falls into this category too, there can be challenges with getting it right when it comes to cybersecurity and data privacy.

Paul Spain:
And when we understand the value of the intellectual property and the data that’s being created and amassed, we need to make sure that it’s really, really well locked down.

Danu Abeysuriya:
Yeah, for sure. I think, you know, I would say better late than never on this one. We probably needed this about five years ago. And at Rush, we run a bunch of compliance frameworks like ISO and PCI and a few others, and it’s quite a challenge because they’re quite traditional compliance frameworks and you’re trying to. You’re up against AI bots and deep fakes and scale of automation that we’ve never seen before. And, you know, I think there’s. If you’re a startup or a small company and you have limited resources, you’re up against the same bad guy. And, you know, we struggle to, you know, stay on top of the types of threats and threat models that we have to engage with because we operate software at scale.

Danu Abeysuriya:
I can only imagine for small businesses how daunting it is, you know, even when I’m just using software in my personal life. So paranoid and I’m, I would consider myself relatively well informed, you know. And if you look at the cyber criminality trends, you know, I think New Zealand loses about $6 million a quarter to cybercrime directly in terms of what was published.

Paul Spain:
Right. Because that’s probably much, much higher than.

Danu Abeysuriya:
Exactly. Because there’s a lot of embarrassment and reporting if you get ripped off 100 grand. You might not want to tell anyone.

Paul Spain:
Well, businesses hit the walls, right, routinely after these things. You know, one business that I was asked to come and speak to at their sort of off site strategy day last year and one of the discussions with the GM was hearing around cyber incident that hit them, which as far as I’m aware was never public. That wasn’t the only thing that impacted them. But within 18 months of that they were gone and they’d been in business for, you know, I think a number of decades.

Danu Abeysuriya:
Yeah.

Paul Spain:
So yeah, it’s, it’s, it’s pretty serious what, what’s going on out there.

Danu Abeysuriya:
Yeah. And this cyber security has one of the worst profiles because in, in terms of business operations, because it’s, it’s called the defender’s dilemma. Basically, if you’re the attacker, you can attack a thousand times and be stopped 999 times and you just need to get through once. But if you’re the defender, you have to stop them every single time. So the odds are just stacked against everybody. And I think coming back to where we’re sitting in terms of policy and the GCSB sort of releasing this framework that doesn’t even touch the sides, I would love to see a lot more help. I’d love to see funding provided by the government. I’d love to see a shared national resource for small businesses.

Danu Abeysuriya:
New Zealand’s economy is 97% small businesses. So releasing an essential 8 like checklist. Yes, it’s helpful, but I’m not sure it’s enough.

Paul Spain:
Yeah, this is a challenging one in our economy for governments to understand the importance. And probably earlier on in the year we were sitting down and talking on the show about the difference between Australia and New Zealand and the bucket loads of investment that are going in from a government perspective, from a cybersecurity perspective in Australia, differences in their regulation. So, you know, the teeth that things like a cyber breach has from a regulatory perspective in Australia versus in New Zealand and the differences are really, really stark. And you know, we see that in the organisations even, you know, you look at our banks for instance and you look at what our banks in New Zealand are spending versus their Australian parent companies and it’s, you know, it’s very, very, it’s very, very different. Not just, you know, you compare the population and so on. You know that the regulation and yeah, the approach that’s being applied in Australia is quite different. So I agree there’s certainly a way to go on this front.

Danu Abeysuriya:
I think an Aussie ISO as the common practice framework for cybersecurity, the UK and Australia, I think they mandate it for certain business sizes and if you’re a supplier to government, I think it’s mandatory as well. I think something like that could be helpful for New Zealand because you might then kind of, I guess push businesses that can afford to do it into doing it rather than delaying it. But I don’t know, is that too heavy handed?

Paul Spain:
Well, it’s a hard one because as you mentioned there are, there are sometimes things that are more important that are outside of kind of a security, you know, a security framework which by its nature, you know, can’t be continually improving maybe in the same way that an organization’s security posture must be. So an organization needs to make a change, you know, today if there’s a new important and relevant threat then they need to make, you know, they need to make an immediate change. And yeah, sometimes the frameworks don’t cover for that. So it’s a bit of a balancing, a bit of a balancing act. And I guess one aspect is it sort of ties into the size and scale of organizations. Right. Because let’s say you said oh, we’re going to mandate a particular framework then that immediately changes who could be a government supplier. So you could drop in a framework that’s like, okay, that framework costs, you know, X million dollars to kind of put in place, slow down innovation.

Paul Spain:
You know, you’ve just cut a whole lot of entities out and so on. So yeah, it’s not easy like a lot of these.

Danu Abeysuriya:
No, it’s a tough choice. I think the world is now full of tough choices. Yeah, yeah.

Paul Spain:
Now also on the New Zealand front, Microsoft have quietly turned on their Azure services in New Zealand. So you know those who are using hyperscale cloud services, which is usually most of us on one form or another. Yeah Will, but those that are in a business, we’ve had that choice of the likes of aws, Amazon, Microsoft, Google, IBM and others when it comes to these things. But it’s Microsoft who have really kind of landed first in New Zealand at scale. Although I Don’t think we’ve seen a formal press release or announcement from them saying really low ping time, it’s all turned on. But you can see those options are there and it’ll be a period of time before I guess everything’s fully turned on. And those that are, I don’t know, doing their teams calls or what other, there’s a whole gamut of things and some of those, it probably won’t make much difference to the average person when they’re in New Zealand versus being somewhere else from an experience perspective. But I think most of us would probably prefer let’s have our data on our soil if we can and you know, all the benefits that come from that in terms of, you know, response times, in terms of, you know, data sovereignty and security.

Paul Spain:
There’s some legal aspects there as well.

Danu Abeysuriya:
Yeah, totally. I think, you know, we work in professional services so we deal with a lot of medium and large enterprises and New Zealand by far is heavily Microsoft stack. I hazard a guess, complete guess, but I would say 85 to 90% of New Zealand businesses are almost exclusively on the Microsoft stack. So I think in terms of reliability and performance, we might see a little bit of an uptick. I think we’ve got a lot of work ahead of New Zealand in terms of sort of our responsibilities and the five eyes agreement. So I think that that might make things a little bit easier. But also we’ve got a lot of infrastructure to build and I think having New Zealand domicile data, for example, for healthcare providers and new innovative technology that’s trying to make the healthcare system a little bit better, but still dealing with legacy legislation that might improve things. And then obviously the transition from sort of on prem, there’s still a lot of businesses that run on prem.

Danu Abeysuriya:
It might be a little bit easier now knowing that, you know, there’s a New Zealand data center so that application performance isn’t immediately sacrificed by shifting your entire workload across a giant ocean.

Paul Spain:
Yeah, yeah, look, and obviously we’ve had varying data centers available, you know, locally for forever and you know, there have been options locally. But I think as you talk about with Microsoft’s dominance and then, you know, more globally, the dominance of Amazon and AWS and the role that Google play having those services available locally I think is something that a lot of organizations are pretty keen on. So well done Microsoft for getting out in front. And look, it’s also good to see though the competition that brings AWS and Google to New Zealand shores as well. Microsoft seem to often lead the way when it comes to launching these New Zealand regions. So I think it’s officially called New Zealand north nz. North one.

Danu Abeysuriya:
I like it. Sounds good. Rolls off the tongue. There’s probably secretly a whole bunch of gamers writing terraform scripts to get counter strike servers running in Azure. So I’m waiting for my very first low ping Azure counter strike server if anyone’s listening.

Paul Spain:
There we go. Yeah, yeah. So now onto sort of more the international front though all of these things usually have some sort of bearing on New Zealand as well. Look, we’ve been hearing about, I guess this has been going on for a while, but new guidelines and rulings and sort of legislation around who can and can’t use social media for instance. And really the noise has got pretty loud in Australia with the government saying there that they’re pretty set on a minimum age of 16 for social media use. And I think even here the national government indicating that they’d be, you know, open to considering something similar. And yeah, we’ve seen US states work down the same sort of track. Looks like in Australia that YouTube would be considered part of that.

Paul Spain:
So it was interesting discussing that with my teenage son and saying, how would you feel about that for New Zealand? Does this whole thing make sense? And of course youngsters, they don’t watch traditional broadcast TV like some of us might have when we were growing up. YouTube, Netflix and so on, these are the sorts of services where they’re consuming their content from. So a fair bit of pushback on that front, but also social media channels getting used for communications. Of course with all of these things there’s a good side and there’s a bad side to them. Malaysia moving to require platforms with over 8 million users to obtain annual licenses and a focus on data protection and child safety. So really quite a lot afoot on this front, but it does bring with it, I think, some significant complexities. Right, so if you, let’s say they switch this on in New Zealand tomorrow, how would it work? Okay, I’m older than 16, so I’m good, aren’t I? Oh, how do I prove I’m older than 16? Ah, okay, I’ve got to start feeding data in and then. Oh, the government needs to verify that.

Paul Spain:
So then you’ve got a whole lot of sort of mechanisms to think about. Does that mean next step? We’re kind of in a great firewall of China type scenario where you’ve got a whole lot of infrastructure that tracks and monitors and everything you do online. You have to verify your age because a lot of what we do online is going to be social media or considered social media in one form or another.

Danu Abeysuriya:
Yeah.

Paul Spain:
It’s not a light topic, is it?

Danu Abeysuriya:
No, it’s not. But it’s like, I guess we’ve been heading to this point for a long time in society, you know, like when, when did Cambridge Analytica happen? That was like 14, 15 years ago, possibly even. Yeah, yeah. And that we were talking about social media being used to directly influence an election outcome in not just one country, but many countries. And, you know, the Christchurch mosque attacks, you know, Facebook’s response to that, and knowing that a bunch of kids saw that and knowing that, you know, a lot of people saw that and it was a very, very, very challenging time to get that video removed. And it’s just the sprawling effect, you know, it’s the power and the curse of the Internet, which is absolute and utter freedom. Right. And so what can you do with absolute and utter freedom? You can do some wonderful things.

Danu Abeysuriya:
You can, you can create distributed education, you can commoditize, you know, accesses access to healthcare services. You can unfortunately also do some other stuff like, you know, 3D printed guns. We saw someone in Otago being, you know, finally prosecuted for doing, for printing a gun. So it’s like, what tools do we have to solve this problem? And legislation and regulation, they’re very broad. They’re broad swords. Right. And so we sort of have allowed it to get to a point where we’ve got no other great ideas. Because if we had great ideas and we could let the free market figure it out, it should have by now, is the theory.

Danu Abeysuriya:
But I also think there’s a step that’s been missed. Right. Where I believe that a lot of the regulations probably have been formed through consultation rather than first party knowledge. And if you think about the nuance of how businesses could implement a age verification system, it really does matter in how that legislation is worded. So if the legislation is worded, the age verification process needs to happen using existing, existing validated credentials and must occur entirely on an edge device. You can quickly bat away some of the majority of the privacy concerns from centralizing the data. Right. But we are yet to see a piece of regulation that would get that technical.

Danu Abeysuriya:
Right? So maybe the real question to ask is, do we just need a better mechanism of regulation that doesn’t just pretend technology isn’t complicated and kind of just says, hey, we’re just regulating the printing press over here and we just need to worry about ink, paper and distribution, but, you know, is a little bit more aligned with the world that we’re dealing with, which is we now live in an environment where border control is very hard, information border control is even harder. And we live in a society that’s growing in size. Eight billion people, I think this, this coming year, probably heading to 12 at some point. It’s the most people that we’ve ever had by a long shot, you know, and so you’re getting complexity of social interactions and all kinds of stuff. So maybe the real question is a little bit deeper than that and probably a little bit more technical, but that’s just my opinion.

Paul Spain:
Yeah, look, I think that there’s a fair degree of complexity to, to solving, you know, solving these sorts of problems. And whichever way things push, there are always going to be consequences. Right. And so, you know, we heard from Zuckerberg, you know, in recent months, sort of admitting that, you know, that they got in and kind of, yeah, messed with a bit of content during, you know, during COVID because they were being pushed by the White House, but it wasn’t actually something that was legally mandated to do. And, you know, in the light of day afterwards, they, you know, they felt we probably shouldn’t have actually done that. And so, yeah, we’re seeing all sorts of different things that are going on with sort of approaches to, you know, I think, by and large, try and do the right things and make good decisions. But it’s actually, it’s really, really hard to make great decisions that work well for everyone. And I think, you know, one of the challenges is, let’s say you put in an age issue.

Paul Spain:
Well, that doesn’t necessarily become effective. Right. Cause there are always sorts of mechanisms to, you know, to get around unless you go to real extremes. And, you know, of course, there’s a little bit of a balance with those things as well. But as we know today, people that aren’t supposed to access sort of certain bits and pieces of content, they usually figure out a way, whether it’s in a school network or somewhere else. And there are offline mechanisms and so on as well. So putting in a mechanism like this doesn’t actually necessarily entirely solve the issue that a legislator might think it does by saying, oh, now young people won’t be able to access this content. It’s like, well, they probably will.

Paul Spain:
It’s just going to access a different way or a different mechanism in one form or another.

Danu Abeysuriya:
Yeah. I think if you take a step back, what’s the problem we’re trying to solve? Right. Like, if you look at the social media age, young women, self Esteem anxiety through the roof, clinically proven, especially the UK studied this in depth. And young males forming echo chambers that are not healthy and toxic. And you also look at sort of just the general, the general effects that you wouldn’t say necessarily cause extreme end of societal or health problems, but they still do cause issues in people’s lives day to day. And you look at the imbalance potentially with the amounts of money that these social media companies generate from exploiting the use of their platform, and you kind of say, okay, well, they minimize their tax payments as well and they’re not domiciled in any particular country. So from a capitalist perspective, you can understand why they may not feel responsible for a group of people in some country out in the middle of nowhere. Right.

Danu Abeysuriya:
Because why should they? It’s not necessarily directly their concern.

Paul Spain:
Well, they’re in it to make money. Right. That’s not the focus.

Danu Abeysuriya:
Yeah. And I think where, where governments and society is struggling with is parents and organizations and governments are being left to pay for the reparations or the repairs that these side effects from social media are causing. Right. You look at the load on New Zealand’s mental health care system, to be. To look a social media platform in the eyes and say you have nothing to do with this is probably, I think most people would agree that’s not, you know, on the face of it, it’s unlikely. Right. So it’s, how do we balance that cost versus benefit? Because I think right now a lot of the social media companies are getting the pure capital benefit. They’re making a lot of money, but maybe they’re not, maybe they’re not contributing to all aspects that they might, that they should be because they’re slightly different from other software.

Danu Abeysuriya:
They impact society. Right.

Paul Spain:
100%. I mean, I’ve had a couple of people from Meta, from Facebook team in the studio here for a private chat outside of a podcast. And yeah, it was a really interesting discussion. They’d come wearing their PR hats to kind of promote whatever their latest thing was at the time. I hit them with a few questions around some of the harm and some of the issues and asked them to come back to me. That was the last I heard from them. So, you know, they’re willing to make the trip to New Zealand to sort of promote their latest thing. But yeah, there was very little response to some of the harm that they caused.

Paul Spain:
So, yeah, I mean, it’s pleasing to see companies get held to some account, but I also think there’s a really important role for families, for parents.

Danu Abeysuriya:
100%.

Paul Spain:
And you know, you can’t delegate, we can’t delegate everything to politicians to solve for us as well. But there is a balance there now onto TikTok, who probably fall in that or very much fall in the social media category as well as a few others. Yeah, along with the others. But I see that Canada have ordered TikTok to close their office in Canada due to security concerns, national security concerns. And this follows a review of TikTok sort of data practices. But at this stage they’re saying that Canadians can still actually use the platform. So I mean, we’ve seen so many of these little kind of nudges kind of pushing onto TikTok. Of course in the US they’re put under pressure to, to exit the US market or to sell to an American entity.

Paul Spain:
Nothing’s closed on that front. And similar things in the US going back to when Trump was last president. So this is not Trump’s president again. Nothing. Nothing new.

Danu Abeysuriya:
I’m kidding.

Paul Spain:
So, you know, there we go. These things kind of come round in their varying cycles. Of course, you know, in New Zealand where, you know, you know, those in Parliament are sort of banned from having TikTok, you know, on their, on their.

Danu Abeysuriya:
Devices, I think that was more productivity than anything.

Paul Spain:
Maybe, maybe so. Probably will, you know, help boost New Zealand’s economy hugely by not having TikTok.

Danu Abeysuriya:
I check the screen times on all the minister’s phones. Yeah, yeah, this one’s really weird actually. Cause it’s like a half measure. It’s like a Homer Simpson piece of legislation because it’s like you can’t operate a marketing and corporate office that has nothing to do with data out of Canada. But then we’ll let all our citizens supply you with all our data which you can store on Chinese servers. So I would like to give the benefit of the doubt and say that there’s something else going on where it’s, you know, if a full ban would have caused some kind of reaction from China, maybe it is just balancing geopolitics a little bit. But it also seems really ridiculous that a short form video platform that predominantly features consumerism and dancing has anything to do with geopolitics. I did find the, you know, in the US when they were sort of pushing for the legislation for the sale of the U.S.

Danu Abeysuriya:
assets. And then TikTok, you know, it was all about like being able to have undue influence and propaganda on the population of a certain segment. And then TikTok’s response was to send a push notification to influence using undue propaganda and influence. And I was like, this is the weirdest, you know, this is the weirdest response to hey, we can’t control the demographic is to like send out a.

Paul Spain:
Message to try and control the demographic.

Danu Abeysuriya:
Because they asked them to write to the senators and stuff like that. Yeah. It was just like. I think you guys are. This is called Foot in mouth. Yeah. So I don’t know what’s going on with this. I’m treating as an as entertainment right now.

Paul Spain:
Well, that’s certainly one lens that we can look at all of these things through. Right. Because some of them are certainly stranger than fiction. So also on the front of TikTok, we understand that their founder is now China’s richest person. Founder of ByteDance. Net worth 82,82 billion. So yeah, this is interesting to see that sort of keep growing despite sort of pushback from US and other countries. So there’s certainly a lot to be made when it comes to the world of social media for the most dominant platforms.

Paul Spain:
Although. Yeah, interesting. If you sort of break them down, they do have their ups and downs and they can come and go from a success standpoint. So it’d be really interesting in 10 years time to kind of have a look and then kind of look back and see how that whole world has changed. And I’m sure some of it will just be sort of through trends. Different people in different ages and demographics will take interest in one platform and then they’ll lose interest maybe in that platform over time. Obviously there’s sort of legislative challenges and other issues that can be geopolitics related, can be security related and the like. Yeah, that will play in.

Paul Spain:
So yeah, interesting times ahead. Now just sort of looking into other topics, I guess. Probably the, the big one and you’ve joked about not being aware of it, but the don has scored a few more votes than some expected and seems to be coming back in the U.S. ken, just to hear your thoughts on what this means and how this plays out, you know, for I guess the tech sector from a security perspective, there’s all sorts of aspects. A couple of the most immediate things I see, bitcoin has jumped over the last week. Certainly if we look at that just in the last five days in terms of New Zealand dollar, it’s jumped nearly 18%. So it’s up around 100 and well just under 150,000 New Zealand dollars for a bitcoin, which for those people that bought their bitcoins at 5 or $10 each, well done. But also we’re seeing A whole range of other step ups in terms of tech stocks, I guess, very relevant to us.

Paul Spain:
In New Zealand Rocket Lab, they’re up 30% over last five days. Tesla up 41% and so on. So, yeah, a lot of stocks doing rather well. But there’s a bit more to the story. What are your thoughts?

Danu Abeysuriya:
Yeah, I mean, it’s pretty well known through history that if a Republican president gets in, Trump won. Right. The markets tend to, tend to go bullish. The interesting thing is, I mean, when you’re talking about a country that represents about 30% of the world’s GDP and is the dominant force in equities, before a major event like an election, it’s not unsurprising for the big money to go into a holding pattern, switch out of their stock positions and keep some powder dry. So when you get a result that’s favorable, to see that money flow back in is not really surprising. The question is, will it last? And the longer term question is, are some of the policies that he’s promised famous ones being drill, baby drill and Chinese tariffs and a few other things. And especially the one to watch I think is the lower corporate tax rate. So in America, we’ve seen job numbers steady and very strong.

Danu Abeysuriya:
We’ve also seen wage increases kind of keep up or beat inflation in a lot of instances. You saw Boeing, you know, a large part of US military industrial complex contracts that last 150, 200 years on some of the aircraft that they sell to the military. You know, stalwart player. You’re seeing their unions rejecting 35% pay increases. Yeah.

Paul Spain:
Over a period of years.

Danu Abeysuriya:
Yeah.

Paul Spain:
Yeah.

Danu Abeysuriya:
But it’s still, it’s still a significant bump. When you, when you’re, when you’re looking at a, you would think that Boeing has the upper hand in that situation. Right. But that’s not the case.

Paul Spain:
Right.

Danu Abeysuriya:
So when you say the US economy is then, you know, going to drop corporate taxes, taxes, and what are those companies naturally going to do with those extra retained earnings and stronger balance sheets and P&Ls? They’re probably going to go on acquisition sprees. They’re going to start experimenting and start innovating. And that’s a significant movement in, you know, business performance that will have a side effect on the rest of the world. And if you also look at tariffs, you know, if he does implement tariffs, we’ve known through the Cold War and many other situations, the us, China, Russia, all of these large, large population bases, more than sufficient to create domestic economies that thrive. So I think the Real challenge for New Zealand, little old New Zealand is how do we not get embroiled in some of these tariffs or how do we decide which position we’re going to play in. The world’s a big place. You know, India is having a similar boom to China. National government’s kind of working on free trade agreements.

Danu Abeysuriya:
I think for New Zealand tech companies there’s probably some huge value in accessing that market. A company called Velocity that does valuation, property valuations, recently broke into India, which is a New Zealand based company, you know, so I don’t know, I think probably remaining flexible and agile is probably pretty important. My Trump impersonation is going to come out here. I love the New Zealand people. I love New Zealand tech. We’re the best technology small country in the world. We’re right here with Paul. He’s a fantastic person, one of my favorite people.

Danu Abeysuriya:
I’m so sick of hearing his voice that I think I’m going to turn off notifications for a while.

Paul Spain:
Classic. Interestingly on that basis. And I’ll come back on the stocks as well because there is an element of those closely aligned with Trump doing better. Right. So, so I think Musk’s stocks have. Well, I guess it’s. Tesla has done exceptionally well actually. If we compare Apple and some of the other ones, maybe not so much, but just in terms of the US’s role for new Zealand, they’ve recently moved to be our number two export market.

Paul Spain:
So it used to be Australia was our biggest export market. It was always our biggest export market. Then China sort of took over and became so, so big for us that I think to some degree it’s kind of controlled how we respond and push back on China, sometimes on things that we don’t agree with. Interesting to see the US now becoming more important and more dominant. And that’s obviously something that’s happened over time. But if you put together the value of our US and our Australian exports, the last numbers I saw those together are actually bigger than China. I think there is a great opportunity for New Zealand to continue, particularly our tech and I guess our varying broader kind of tech and startup ecosystems. Really continuing to tap into the US market I think is really important.

Paul Spain:
So I am curious how this plays out and how, you know, our New Zealand firms find that they have to operate Rocket Lab. You know, we talked about, you know, 30% increase in their share price on top of the massive gains that we probably talked about, you know, a month or so back. So, you know, they’re probably up maybe, you know, 200% over, you know, whatever period last year or so. But you know, they took that approach to become Rocket Lab usa. Right. And they’ve taken a very, very particular approach. Now when you stand back and look at that, seems like a very, very smart decision from their perspective. But I love that their place in New Zealand is still absolutely a really, really key part of Rocket Lab and how they operate.

Paul Spain:
So I think there’s some lessons to be learnt sometimes from our biggest and boldest tech innovators. Xero is another interesting one. When you look at how they’ve kind of, you know, still have a, have a really important, you know, base in New Zealand, but they’re not listed on the New Zealand, you know, stock exchange these days and haven’t been for a number of years. But yeah, often it’s maybe those that are, that are earlier stage that might be worth, worth looking to for our younger companies and startups to get, you know, a bit of a watch on, on what they’re doing and how they’re tackling it. Because if you’ve got to pay a tariff to export into the US market, in some cases that might be enough to make a business completely unviable.

Danu Abeysuriya:
Yeah, totally. And I think there’s probably a few things like we just talked about how from the capital markets perspective and business perspective this election result is probably going to make some money. But I think we’re also living in a world where long term decision making matters a lot. You know, like Trump’s drill baby drill policy, absolute disaster if he pulls out of the Climate Change accord and the consequences of that again, you know, the thing that doesn’t sit well with me and it shouldn’t sit well with any other, you know, non American citizen, is that one country gets to decide the outcome. For a lot of other countries we get dragged along and that’s probably something to think about. You know, in business planning as well in business you always need to be able to do business with people who have different values. Right. But you need a couple of things where you vehemently agree and there’s probably a couple of things that, where you, you just don’t agree.

Danu Abeysuriya:
Right. And I think remaining in an undecided state, you know, I think you’ll start to see if he starts implementing policies or changes or America starts making moves like pulling out of the Climate Change Accords, you know, that’s probably going to take about 12 months to really action and then flow through. And in my mind, you know, that’s sort of the period where I’m Thinking about, okay, well, if I have to deal with tariffs, I’ve probably got that clock ticking now. But also, like, what aspects of doing business in America am I okay with? Do I agree with and which aspects don’t I? And I would encourage everyone to be thinking hard about that. The world is a big place as well. Like, you know, maybe the American market’s locked out for a little while because of these tariffs. What are your alternative options? You know, we mentioned India, but you know, a lot of places in the world that need our food, they need our technology or want our technology. New Zealand has such a trusted brand, it doesn’t matter where you go in the world.

Danu Abeysuriya:
If you say you’re a Kiwi, you get a smile, almost guaranteed, unless you’re in Australia, then you get a side smile. But that does carry in everything we do. So if you were to proposition a piece of software that came out of New Zealand that was AI based, for example, I genuinely think people would trust that software more than if it came out of a lot of other countries. Right. So I think just changing thinking on plan B’s and C’s. If, you know, doing business in America doesn’t necessarily go your way or you disagree with some of the changes that might get implemented, thinking about the other options is probably worthwhile right now.

Paul Spain:
Yeah, interesting thoughts. Yeah, I guess there will be a mix in other markets in terms of tariffs and so on. Right. Because we don’t necessarily have complete free trade agreements with every place in the world. And yeah, I think it is important to sort of think about that values alignment and who you’re doing business with. And yeah, this sort of time is a change in place, is as good a time as any to think about that just coming back to the stock. So Apple in the past five days up 1% and Nvidia up, according to this, about 5.7%. So not all doing quite as well as Rocket Lab and Tesla on their fronts, but yeah, certainly some pretty good uplift for those that might be sitting on some of those stocks.

Paul Spain:
So well done, listener, if that’s you. Now, I’m keen to hear a little bit around what’s been going on in the world of Rush Digital. You know, a lot of people will have, you know, seen you and the media, you know, come across some of your developments. Covid Tracer app I think was, you know, most commonly known for, was something that, you know, probably every single person in our audience, you know, would have had an experience with. And that, you know, I guess an example of something that was needed to be developed at pace and, you know, was iterated on quite quickly. But you’ve been talking recently also around tackling global AI challenges in this Shapeshifter series. Can you talk a little bit about that?

Danu Abeysuriya:
Yeah, for sure. For those that don’t really know Rush, we’re a digital product design studio. So we’re about 100 odd people based in Parnell, and we’ve started to develop some capability around the world as well. We typically deal with larger enterprises in New Zealand, so stalwart names, you know, Z Energy, Kiwi Rail, Water Care, Ministry of Health, et cetera, et cetera. And we sort of believe in this philosophy of nudging giants. So our mission statement is to design and build technology to better serve humankind. And that’s basically an acknowledgement that technology has created a lot of problems for society, but it also has the ability to fix a lot of those problems or create new opportunities. And it has much more to do with the wielding or the intention of the person holding the technology than it does the technology per se.

Danu Abeysuriya:
So the analogy is a hammer can be used to create something. It can also be used to do damage. Right. And so we have this sort of philosophy. We like to implement change and see it reach scale. And so we believe in sort of nudging giants, so working with larger organizations that have large market share or ministerial influence to try and enable digital products to do a better job of serving a beneficial outcome there. And that could be good business, it could be entertainment, it could be social good. But the idea is try not to move the needle backwards.

Paul Spain:
Definitely, definitely want to be going in the right direction.

Danu Abeysuriya:
Yeah, exactly. So when you have a mission statement like that and you talk about, you know, the intention, we can’t look past AI and how it’s going to sort of influence the world. And, you know, democracy is obviously a fun topic to talk about, but I think the conversation is just as important because if you wind the clock back to the start of the Internet boom, I don’t think people necessarily understood the side effects that the Internet would have. And I would say that when social media or Facebook started taking off, we probably weren’t having what I would call healthy conversations like we are now about, hey, should we ban kids from social media? Hey, should we consider cybersecurity frameworks for small businesses? So I think the conversations matured a lot. It feels doom and gloom, but it’s probably more because we’re intentionally leaning into difficult conversations, which I think, if you think about it, is generally a good thing. Right. But it can feel a bit down.

Paul Spain:
Yeah, well, I mean, I guess technology has been a big enabler for different ways of communicating and having conversations. Right? Yeah. This podcast for instance. This wouldn’t have been a practical thing when I was growing up, but it is now and creates that opportunity. Varying forms of technology, including social media, enable that. But yeah, of course there’s always a flip side to it. And yeah, these things are. Yeah.

Paul Spain:
Probably easier said than done to, to navigate. Right. And you, you could argue that there’s been a lot of good from a perspective of, you know, democracy in, in recent times from our, you know, technological advances. I think what was the. Some stats I was reading the other day of, you know, Jeff Bezos came out as the owner of the New York Times and was kind of lamenting and highlighting the fact of how little that we sort of trust media or mainstream media today. And there’s that sort of aspect of some of that can be due to misinformation online, but some of that also coming from media really leaning into technology and clickbait type headlines and things and their content genuinely not being that good. And so there is an aspect of balance that our online platforms give and that ability to have maybe discussions in a broader way than what we were able to in years gone by.

Danu Abeysuriya:
Yeah, for sure. The Salon series that we ran, we sort of invited a few people who, you know, it’s actually being co organized with the Institute of Design in Chicago. And so a couple of the directors came down. We had a guest, Albert Schum, who used to be a VP of design at Microsoft, dealing with AI user interfaces and was there around the time they were working with OpenAI. So the topic of conversation was really around exactly what you’ve sort of articulated there. And it was to really get people around a table and sort of see how proactive design thinking, which is a process that we run internally to figure out if you think the technology is the hammer. The design thinking process that we apply is the figuring out where the nail is. And I think we have come a really long way and we should probably not just carry on on the pathway that we’re going, but like do a bit of self reflection and kind of go, hey, from the last 25 years, 30 years of the Internet, what do we do right? What do we really nail and what didn’t we quite get right and what did we really screw up? Because I think AI, generally speaking, turbochargers, it’s like lighter fluid, it’s going to make any mistakes we make way Bigger, but it also will make any improvements.

Danu Abeysuriya:
We make a lot better. I think about, you know, challenges as we, as we come up, like universal healthcare, you know, we have to. Globally, we’re trying to lift a lot of people out of poverty. It’s well known that primary healthcare is like one of the key contributors to that. And if you look at AI models from Google, like Med Palm 2, you know, they’re hitting around 90% of the US medical bar. They’re actually outperforming most medical professions in that structured exam. Imagine having a triage doctor in your pocket in a society like rural India, where connectivity is delivered via technology like Starlink and, you know, Cupid, which is the AWS satellite network. And you’ve got a doctor that can at least help you with, you know, maybe not everything, but some things.

Danu Abeysuriya:
I mean, if you compare that to what could be happening on the ground there right now, which is no access to healthcare, no connectivity, that future looks a lot brighter for the people that are involved in that situation. Right?

Paul Spain:
Oh, 100%, yeah. I was in India last year and you know, one of the things that I looked at was an AI solution to, you know, blindness in babies and yeah, the way that that was sort of being utilised and it needed to scale out a lot more broadly. But yeah, you know, something have a really, really big impact and make a big change on people’s lives. Right, yeah, for sure, yeah. No, I think it’s, yeah, it’s really good to have these opportunities to get together and to understand things and I think looking at those differing perspectives is really, really key because, look, without that we can sort of make all sorts of, with assumptions and land in places that might be a bit unexpected. There was one of the headlines that came through this week was around the fact that in the US a lot of health related entities are leaning in on AI transcription tools, but actually those tools are making some significant mistakes.

Danu Abeysuriya:
100 milligrams or 1,000 milligrams.

Paul Spain:
Yeah, you don’t really want to get these things wrong. And so, you know, this is kind of that, I guess that balancing act and also we’ve been told about sort of, yep, this is going to keep improving exponentially. But yeah, maybe, maybe not. So these things are interesting to watch in terms of which areas we’re kind of getting, you know, we’re getting those steps up and where we’re getting the challenges so we can, you know, we can make those sort of right calls. And I think at the moment, yeah, we’re probably seeing a lot of scenarios where we’re getting the message that AI is very, very useful as an assist to humans. Right. Not as a throw it all over the fence to the AI systems and let it do the job. Right.

Paul Spain:
You know, AI soldiers and things like that, making executive decisions. It’s important for us to recognize that there’s not yet in most cases an ability just to hand completely over to the AI.

Danu Abeysuriya:
Yeah. And I think it’s probably important that we don’t head down that path. We don’t want to devalue human contribution. The risks are real. Like I genuinely believe the risks are real. I think we’re at a point in time, probably for the next five years, to actually influence what the outcome of these risks will be. But we need to be proactive about it. You know, in our business we’ve implemented AI thoroughly through the business.

Danu Abeysuriya:
So proactive training, we brought in experts rather than just turning on a tool. And we’ve seen huge benefit, absolutely huge benefit to being proactive and kind of owning the conversation. And our staff becoming really vigilant about the risks of AI because instead of kind of letting them discover it on their own, we’ve sort of front footed it, we’ve explained it, we’ve given them space and time to adjust and think. That’s because it’s a huge threat to our business. Because you think about code generation, design, thinking, system design, all of that stuff. Theoretically one of these AI systems eventually might be able to do that completely comprehensively. The question is, is that still something customers want? And if you have a scarcity mindset, you might say, actually there’s not enough work or problems in the world that would make all of our jobs redundant. But the truth is, if you think about any business, you’ve got an infinite list of problems and you’ve only got resources to go after the top two or three that are really important.

Danu Abeysuriya:
So if you say AI systems can double my output from my workforce, that means you can go after six things instead of three. Right. So I think the way it’s heading the world is not short of problems. And I think there’s a real opportunity, if we grab it by the horns, for AI to allow us to tackle the very complex world that we’re living in, which a lot of us are struggling with, to find the truth and figure out what a contradiction, like Elon Musk’s stock value going up as an electric car owner when a president has just come in who literally is against electric cars. Right. These weird contradictions. I think AI is going to allow us to navigate that world a little bit better if we’re proactive about it. The thing I’d hate to see is us leaving it too late.

Danu Abeysuriya:
That’s when you get really disruptive societal change where people are forced into changing their skill set or entire industries get disrupted because they were caught napping effectively. And I think that’s the thing we’re trying to do in trying to stimulate and try and help large organizations navigate.

Paul Spain:
Yeah, and certainly something we really want to encourage for New Zealand and you know, it’s something that, you know, my team at Gorilla and through the, you know, the varying things that I do around the country, we’ve, you know, we really tried to, you know, encourage a lot of organisations of all sizes to be looking at what’s the uplift that we can get from artificial intelligence and what are the flip side issues, what are the risks and address those. So, yeah, hopefully as a whole, as a country we can do pretty well and, and have some good global impact on that front. Well, great to have you on the show, Danu. Really appreciate it. For folks that are interested in tracking you down, what’s the best way to get in touch?

Danu Abeysuriya:
I’m quite bad on social media, but you can search up Rush Digital. Rush Digital and we’re on LinkedIn. Very, very prolific on LinkedIn and Instagram and not so much Twitter or X or what do you call it again, who’s president?

Paul Spain:
That’ll do. Excellent. Well, thanks everyone for joining us. Big thank you of course to our show partners to One NZ, Spark, 2degrees, HP and Gorilla Technology. And if you’ve been watching our livestream, be sure to look us up on your favourite audio platform as well. We’re across the likes of Apple, Podcasts and Spotify. And of course, if you’re listening to the audio, make sure you follow us on your favourite video platform. Alright, that’s us.

Paul Spain:
We’ll catch you on the next episode. See ya.