Now that everybody's wringing their hands over the risks of AI, I'm going to drill down on the cybersecurity plays I think could help mitigate the risk. Take Okta, a major player in identity verification that reported a phenomenal quarter in late August. Stock's now up 140%, 144 over the past six months, in part because it's no longer being held back by AI displacement worries. It turns out artificial intelligence was never going to make them obsolete or anything. Their security software is more essential than ever, now that you've got AI agents roaming around the internet. So let's take a closer look with Todd McKinnon, old friend of the show, co-founder and CEO of Okta. Learn more. Todd, welcome back to Mad Money.
It's great to be here, Jim.
All right. So Todd, I've got an interview that you did September 9th before what happened. Okay. These incidents — and you're very prescient. You predicted that this could happen, but you said that these things have identities. And basically, if you have an identity, I can stop you.
Well, here's the deal. AI agents, they're a powerful new identity type. So it used to just be you would have some software and you would integrate it together. And now these AI agents can make decisions on their own. And to make them more powerful, you have to do one key important thing, and that's give them access to more data, more tools, more actions that they can take. And that means that you have to give them an identity so that you can control and monitor and have visibility into that data and those actions. And that gives you insight into the potential negative repercussions. And so you can prevent it and control it.
Well, I think this is really important. We had a lot of people discussing in some pretty fiery language what could go wrong. And then when I read what you do, I think, wait a second, look, there may be a lot of these, they may seem nefarious, but as long as they have an identity, even if they are nefarious, they can still be stopped.
Yeah, we think the key is visibility and control. So OpenAI and Hugging Face — everyone's heard about this problem that happened where an AI model jumped containment and went after this company, Hugging Face. Now, OpenAI said that their model was not connected to the internet. Now turns out that it was connected to the internet. So by bringing visibility and control with something like Okta, you actually know what your AI is connected to. So it's not going to be a magic fix for all this. But the foundation of the fix is visibility and control. And once you have that in place, then you can take the right actions. Then you can have a good risk assessment of what's actually happening.
So you're offering, as you say, the blueprint for the secure agentic enterprise.
It's very important. When I talk to customers...
Which you probably talked to — how many customers?
Since I'm on a plane every week, getting out there in the world and talking to customers, and they ask about competition. Investors ask all the time about competition, what's your competition? And they expect me to talk about maybe a platform. Confusion. And confusion is the — yeah.
Your stuff, because every vendor is going to the customer and saying, we have the answer to everything. We can do it all. And to the customer's mind, it's a bunch of overlap and a bunch of confusion. So we're trying to work with the industry, everyone in the industry, and say, here are the elements you need to be successful. You need this plan for your real-time visibility, your plan for identity. And we're focused on the identity and we're going to fix it.
That universal director of identity. That's what every company needs.
You have to have a system of record of your AI.
You have to have a central repository of your agent so you can see what they're doing and see what they're connected to. It's the foundation for control.
Okay. So like many other people, this is one of those issues that transcends stocks. So I mean, for instance, I was telling my wife I was going to see you, and she knows that I talk to you and that you've got a real solid head. And she goes, well, I mean, unless everybody uses your friend, I mean, isn't everyone going to die? And I said, oh God, no. And she goes, well, then you just want your friend. I said, Todd — I've covered Todd for a long time, but maybe he's just a rational person offering a solution.
I think — one of the things we don't do is we don't oversimplify it. We know that there's tremendous potential in AI technology, and the way you make it more powerful is you give it more data, you give it more connections, you give it more power, you give it more capability. And I want that to happen. And I want the benefits to accrue to everyone's company and everyone's organizations. I want America to win. I want the world to win. But the only way to do that, while also mitigating the risks, is visibility and control. And we're in a perfect situation because the key to visibility and control is identity. You have to know where these agents are.
