From theCUBE Studios in Palo, Alto and Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante.

Dave VellanteTechnology generally and big tech specifically are regularly cited by politicians, media, and governments around the world as the root of many societal problems today. Accusations like privacy invaders, fake news amplifiers, job destroyers, discriminators, and more are commonly lobbed at technology firms with little recognition for the substantial value large tech companies have delivered over decades. Moreover, many powerful government officials have rewritten the history of effective government oversight and are attempting to apply antitrust law in novel ways that have virtually killed M&A and threatened to stifle American exceptionalism and innovation. Hello and welcome to this week's theCUBE Research Insights powered by ETR. In this Breaking Analysis, we welcome CUBE alum and senior fellow at the Information Technology and Innovation Foundation, ITIF, David Moschella.

Moschella and Robert D. Atkinson have written a new book, parts of which we're going to unpack today. It's called Technology Fears and Scapegoats: 40 Myths About Privacy, Jobs, AI, and Today's Innovation Economy. Welcome Dave Moschella back on theCUBE. Good to see you my friend.

David MoschellaThanks, Dave. Good to be together.

Dave VellanteSo look, we've cherry picked seven of the 40 myths that we're going to dig into today. But before we do, let's take a look at some of the spending data from ETR just to frame the conversation. If you watch this program, you're familiar with the format of this graphic where net score or spending momentum is on the vertical axis and penetration into the dataset is on the horizontal axis. That red line at 40% indicates a highly elevated spending velocity. Now, ETR just focuses on the enterprise. So we've had to superimpose the logos of those firms that we don't track. And we've also put in the valuations. There are six with market caps in excess of a trillion dollars, as of this morning, Meta, Google, Amazon, Nvidia, Apple, and Microsoft. And the point is that these firms now dwarf to a large degree the valuations of past leaders like Dell, IBM, Cisco, and Oracle, whose combined value is under a trillion dollars.

And note, they're all above that 40% line, the trillionaires. Or, most of them anyway, are close to it. So they not only have scale and huge balance sheets, they also have momentum on their platform. So Dave, these six trillionaires, they take a lot of shrapnel and are often the targets of the vitriol. Now, we're not saying monopolies that break the law should be allowed to do so. Absolutely not. In your book, you and Robert Atkinson wrote... You wrote that you want to lay out the facts and a balanced view of the issue. But I'll let you describe in your own words why you and your co-author wrote this book.

David MoschellaThanks, Dave. And yeah, like you, I've spent my whole career in the technology business and for the vast majority of that time, people were very optimistic and favorable views of our business, particularly those of us who were up in Massachusetts where tech sort of revitalized the economy here and then later helped America defeat Japan in the electronics business and all the benefits and great things that have happened through the internet. But really starting around 2017 with both the election of Trump and the Brexit referendum in the UK, perceptions of our business started turning negative and it's actually been getting worse for the last six or seven years so that people want to ban things like facial recognition or something like AI comes out with all of its incredible potential and yet 90% of the stories are about the downsides and risks and what to so-called do about AI.

So Rob Atkinson and I really tried to take this head on. And we basically came up with a list of 40 things that people say all the time about the tech business and really have come to define pretty much today's conventional wisdom. And we wanted to just see how well they really hold up to a reasonable scrutiny. And we're not saying that these fears, these complaints, these scapegoats, they're wrong. But we are saying that often, they're more wrong than right. And in many cases they're highly, highly exaggerated. And so the book is really a way to walk through that. And the book is called Technology Fears and Scapegoats because sometimes that's sort of the generic fear that people have of the future.

And other times, people are just looking for scapegoats of who to blame for all the problems that we have in the world, be it polarization, misinformation, bias, discrimination, job loss, all these things and people looking for something to blame. And unfortunately, tech gets far more of its share than deserves. So yeah, the book basically tries to make that case and, as you say, give a more balanced perspective on really what's happening.

Dave VellanteSo like all your books, I don't read them on Kindle because I get my highlighter out. The pages are all dog eared because there's so much depth in them. So I really appreciate you sharing with our audience. There's 40 myths. We don't have time to go through even half of them. Now, the way it's structured, you wrote 20 and Rob wrote the other 20, and we're going to key in on seven of my favorites. So the first one we're going to explore is myth number two in the book, which technology is destroying individual privacy. I mean the premise you put forth here, Dave, is that despite the issues that the media often points to about privacy concern, it's kind of like you were just saying with AI, technology actually is built in a lot of privacy. I mean, iPhone, Apple is really making it a centerpiece of their marketing. They built that into their products and services and there's a lot of other examples that you wrote that technology has created far more privacy than it has destroyed. Yet the sentiment against big tech in this regard is kind of universal. So bring back the chart and ask you to sort of explain this myth in a little bit more detail.

David MoschellaYeah, it's a classic. And what people often forget is that before technology and before the internet, most people had no privacy whatsoever. And that if you lived in a small town, basically everybody knew your business at the local pharmacy, the local shop or the local bookstore or whatever. And if you wanted to look up some sensitive issue about health or sexuality or gender or beliefs, there was very few places and often times no cases where you could do that in any sort of confidential manner. And so the internet has essentially brought massive amounts of privacy to virtually every American.

And how many of us have never searched on something that you did because you'd rather not talk about it with someone else and you wanted to get some information. And we all do that. And when we do that, we're essentially making a bet and we're betting that, all right, the servers at Google or Amazon or whatever, they might in some ways know what we've asked, but the odds of that coming back to embarrass you or hurt you in any way are very, very small. So people make that bet, and by and large, it's been an overwhelmingly winning bet. And that isn't to say that there aren't real privacy risks with today's technology. We all know this. Cameras are everywhere, there's lots of surveillance, we're profiled, we're targeted.

Our locations are tracked. Data is retained forever. China shows us every day what a surveillance state could look like. But if you compare those and you say, "All right, hundreds of millions, virtually every American and really billions of people around the world benefiting from the confidentiality of a standard search versus a smaller number, it's hard to say exactly how many, but in my view, at least one order of magnitude, probably two orders of magnitude of people actually hurt in any serious privacy way, you see that the balance is overwhelmingly positive." And yet you almost never read a positive story about the Internet's ability to increase privacy. And the organization I work with, the ITIF, they spend a lot of time...

They're a digital policy organization and we spend a lot of time in Washington. And when you listen to the way, say a congressional hearing talks about privacy, they treat a Musk or a Zuckerberg or Google folks, treat them like criminals of basically abusing people's privacy to make money and almost never a good word. And I like to say, well, if just once they might start one of those hearings by saying, we're really grateful for all the privacy that technology does create in our lives, the ability to read something without everybody knowing what you're reading or to watch something rather than go to a video store and rent a DVD. That all of these forms of privacy that are created, people should appreciate those.

And then, okay, let's focus on, we don't want to be like China. We don't want to surveil everything. We don't want to keep data forever and have it so that the worst thing you've ever done, it might be what shows up on a Google search about you and those sort of real issues. But they're manageable as long as we keep in context that the overall situation is not just positive but overwhelmingly positive.

Dave VellanteSo a couple follow ups, am I correct in asserting that credit card companies have a lot of information even prior to the internet that they collect on us? And I've always felt like somehow that seeps out there. Are the sort of restrictions on credit card companies or even I just don't recall that kind of animus toward those companies and the financial institutions, do they not have similar data on us and how is that protected and why do you think that that's not been as much of an issue?

David MoschellaYeah, I mean that's clear that the information business is a really complex ecosystems of banks, credit card companies, governments, healthcare organizations, insurance organizations, law enforcement, all kinds of people with all kinds of data out there. So why does tech get signaled out? I think it's pretty clear. They get signaled out because they have the money and they have the power. They have the visibility. But those other firms that you mentioned, they're really in the business of trading that data. The big tech companies, yeah, they want to sell ads, but their primary business is to get people to use their services. So I think they get way more of the blame than they really deserve.

Dave VellanteWell, I mean you're right. In front of Congress, a lot of finger wagging at Zuckerberg and of course they make all their money by essentially appropriating our data and targeting us-

David MoschellaSure....

Dave Vellantewith ads. But that's quid pro quo of all the value that they provide.

David MoschellaYeah. And even if you ask people, would you pay for this service or would you rather get it free for ads, the overwhelming share of people say, "I want it for free." And people who've tried to make a $20 a month service or this or that, it's tough going. And that may change. There are certainly people out there who want to take on the advertising model and that's part of the tech competition and business. But thus far, consumers really like free and who doesn't.

Dave VellanteAll right, moving on to the next myth. It's number three in the book. Social media is polarizing America. I mean the conventional wisdom here is that social media certainly amplifies our divisions and creates this flywheel effect that exacerbates polarization. Is that not the case? Maybe you could explain your thinking on this one.

David MoschellaYeah, I mean the privacy one is sort of a fear issue of people are worried about that. This is, to me, overwhelmingly an issue of scapegoating that, when people try to say, why is America so polarized, it's so easy to blame it on social media. But the reality is, we're polarized for real issues. Donald Trump is a uniquely polarizing figure, whether you like him or not. The country is deeply divided over abortion and guns and immigration and climate change. Our political system is a 50-50 tribal system that clearly leads to a polarization built into that. You have the mainstream media, whether it's Fox News or CNN, they're polarized themselves and contribute to this.

So there's all these real sources of polarization. And to me, they're actually extremely similar to what America was like in the '60s. In the '60s, America was incredibly polarized again by a war, unpopular war, by assassinations, by riots, by protests, by drugs, by the counterculture, and all of these things. And all of those polarization happen without any social media whatsoever. You look at Trump, Trump was polarizing whether he was on Twitter or kicked off of Twitter. It made no difference really at all. And so I think a lot of it is scapegoating, but as you say, yes, social media amplifies it. People say more harsh things sometimes when they can be anonymous and do it.

Filter bubbles and algorithms and these things have their place and there's propaganda and fake news. All the things are out there, but to me they really are sort of drops in the bucket compared to the main issues. And so why are we so focused on social media? I think it's primarily a question of scapegoating and convenience. What's more appealing to politician or mainstream media than saying, "Well, the problem isn't us. The problem is this new stuff." And in fact, you could easily title this section, Mainstream Media Agrees that New Media is the Problem. It's basically just shifting the blame to the newcomer or the new way. And that's a familiar pattern, but I don't really think it really holds up to scrutiny.

Dave VellanteWell, it's interesting. I mean, I've never been on Truth Social, but it's got I guess a millions of followers. But I hear as much about Trump as I ever have. And while it's true that the big four: China Russia, North Korea and Iran will use social media to foment dissent, it's almost like people complained about crypto because ransomware use crypto to commit fraud, but a lot more fraud is created or perpetrated with actually hard currency than with crypto. And of course then there's the TikTok piece, which is quite interesting and we'll see what happens there. You've always been a proponent of approaching that from the standpoint of, hey, if you're going to not allow our platforms to participate in an open way in China, then you can't here. Start there on those grounds versus some of the other rhetoric that we hear. Any thoughts on those points?

David MoschellaYeah, two things here. The TikTok thing, as you say, although I'm generally in favor of all kinds of free speech and open platforms, in this case where the situation is so unbalanced that Google and Facebook and X cannot operate in China. So why on earth would we allow TikTok to operate here? It's a simple matter of fairness and reciprocity. And see to me, you don't even have to get into all these national security and things that do, which in many cases, I think are exaggerated. You mentioned the Russia and China and Iran and North Korea and yeah, they try to interfere with elections, but I've got news for you, we try to interfere with people's elections all time around the world. And to me, this whole storyline goes back to the election of Trump where so much of it was blamed on Facebook and Cambridge Analytica and Russian bots and all of these things.

And I think most of that, the impact of those efforts has been largely debunked, but the myth lives on. I just give you one fact on it. By most estimates, people think that Russia may be spent 100 or $200,000 on bots and various propaganda efforts that they made. Well, the campaigns each spent over a billion each with their getting the message out. So you either have to assume that it's a drop in the bucket or Russia's so much smarter and somehow is using things so much more effectively. And there's no reason to think that. I think, again, this was primarily a way for, in this case, the people on the losing side of the election to find this scapegoat. Why did we lose? We lost because of Cambridge Analytica and Facebook and Russian bots and all of these things. And I think that is just people just kidding themselves.

Dave VellanteWe just came off of three shows this week, two of which were cyber related, the Mandiant mWISE, it's now... Mandiant's part of Google. It was a cybersecurity show. And then CrowdStrike, I was out there. And of course these big four come up. I feel as though election interference is not the big issue with those. It's really protecting our critical infrastructure.

David MoschellaYeah, absolutely.

Dave VellanteStealing secrets and ransomware and those are much, much bigger problems.

David MoschellaOh yeah, without question. And we're not very good at that. And we do change the subject matter onto things that inflame people for little reason without taking actions on the things that really matter. And I totally agree with that.

Dave VellanteAll right, next, let's move on to myth number 11 in the book. This one was interesting. The pace of technology change is accelerating. You said that's a myth. It was kind of surprising to me when I read this, but of course I read deeply your logic. But I mean, today, we're seeing new LLMs come out daily. The number on Hugging Face, I think, is nearing a million. It might even be over a million. But your angle on this comes from one of user and societal adoption. So walk us through this slide in your analysis.

David MoschellaA standard way of looking at the pace of change for any particular technology is just ask how long does it take for half of the people to have this device? And if you look at that over all the things you see, starting with electricity and phones and going up to the 3D goggles, what you see is a very consistent pattern. And the first two there, electricity and telephones, it took a long time because you had to wire the nation and that was very complicated and very difficult and took many, many years. But since then, if you look at radios and televisions, they were adopted extremely quickly. Within less than 10 years, over half of Americans had them once they were commercially a viable product. Much faster than PCs, roughly the same as the internet, a bit faster than mobile phones. And so if you look at that data, you can't make really any case that the pace is accelerating and that is strengthened when you look at sort of all the new stuff, home robots, Fitbits, 3D printers, smart watches, blood pressures, thermostats, not one of which has reached the 50% adoption.

So the rate of adoption is not accelerating. But there's some other ways to look at this question too. Sometimes the sort of companion argument here is that the impact is greater, is accelerating. And that's not true either, that the tech industry is roughly 60 years old, from the 1960s to today. If you just look at the 60 years before then, the technologies of those 60 years are far more impactful on people's lives. Electricity and lighting and heating and cooling and air conditioning and movies and telephones and planes and cars and trains and all of these. And you could go on and on and on. Many of us, as it gets hot in the summer, we wouldn't trade the entire internet for our air conditioners.

And so those innovations of the physical world are clearly more important. So I don't think it's accelerating and I don't think the impact is getting greater. And I'll just throw one other thing out there and another way of looking at sort of the speed of change, and that's to look at the so-called eras, you know the mainframes, minis, PCs. Each of those eras, mainframes came out in the '50 and '60s, the minis in the '60s and '70s, the early '80s, and PCs in the '70, '80s, and the '90s. And mobile in the 2000s and tens and social in the '20s and now AI in the '20s and '30s. And those eras are all roughly a dozen years each. So even within the IT sector, the pace of major shifts in paradigms is actually remarkably consistent.

And so why do people think that it's getting faster? Well, one of the reasons is they sort of conflate applications with platforms. So sure, ChatGPT get 100 million people in a couple of months. But why is that? Well, they didn't have to buy anything. I didn't have to install anything. I could just go use it. And to me, that's no different than saying that the Milton Berle show on TV went from no users to 50 million users in a year because all you had to do was turn on the station. And so the applications, whether it's Facebook or Google or ChatGPT, it's much easier to put an application on top of a radio program, a television or a computer or the internet than to buy a new platform.

And so when people throw those numbers around, it's like, yeah, that's great. 100 million is unbelievable, but it's because it's so easy. It was no more difficult than doing a Google search. So billions of people already knew how to do that rather than having to go buy something and learn how to use it. So all of those things, I think, are basically just loads of exaggeration.

Dave VellanteSo-

David MoschellaThe pace of change is remarkably consistent as far as I can see.

Dave VellanteSo my follow up is, do you think that'll change? I mean what's the fundamentally... Because electricity and telephony, you had to put in all this infrastructure, the power grids, the phone lines. Do you think that that will change given that we do have the internet, that we do have all this computing power to leverage? Do you think that the pace will change or will it underline factors?

David MoschellaI'm not sure I want to make a prediction whether it will or won't. I'm pretty comfortable saying it hasn't. And when I look at AI, AI itself, the basic logic of neural networks and machine learning is 60 years old. People understood these concepts in the '50s and '60s. It's taken all that time to become a usable, powerful thing. And now it's in its growth phase like an iPhone and everything is flying around it. But it doesn't mean that AI is a year old and everything's happened in a year. It took forever to get to this point. And like all of these eras, it has its run of 10 years, and I don't make any pretense to look beyond that. But I would say this, that as amazing as AI is, and we may get to this later in the talk, the needs and challenges and demands and importance of the physical world is still far more important.