The Accounting Technology Lab

Brian F. Tankersley, CPA.CITP, CGMA 00:00
Welcome to the Accounting Technology Lab, brought to you by CPA Practice Advisor, with your hosts Randy Johnston and Brian Tankersley.

Randy Johnston 00:10
This is the Accounting Technology Lab. I'm Randy Johnston with my co-host Brian Tankersley, and I got to tell you, we have been watching the technology merger and acquisitions in 2026. We don't often do a an episode that I'd call it newsy, for example, but this seems like there's enough big trends that we wanted to just discuss a few of these elements with you because I think it shows longer trends. So Brian, you know, I think what triggered us on this was probably the Stripe purchase of Open Router in the big picture. That was one, and we've got another episode recorded for you on AI routers. So you need to make sure that you listen to that because it's really a big thing in terms of of strategy. But you know, through the years, I've watched a lot of the hardware plays, and my theory has been that AI will run at the edge, not in big central data centers, because we can't get the central data centers to be anywhere near big enough and fast enough to do the job, and in a separate accounting technology lab, we're going to talk a little bit about the techlash the back, the pushing back on some of this technology. So you probably will want to listen to that as well. But frankly, I'm a fan of these AI and hardware innovators, and so if we just use traditional names, Intel and AMD and Nvidia and Qualcomm and AMI and there's more. These hardware creators, what they've done is pretty darn fascinating. So I wanted to spend a little bit of time with you. Brian concurred that yeah this probably made sense. Just talk about some of the acquisitions, and I am going to start with AMI. You know this is really a platform firmware. It allows you to build server cloud and AI infrastructure, and they were acquired by Lattice Semiconductor on may 4. Now the amount of the transaction was about 1.65 billion, but what we want you to begin to hear is consolidation is real. We're seeing it with accounting firms with PE acquisitions and other merger and acquisitions, but in this hardware space, normally what happens is somebody has built something that is out of the ordinary, and another vendor says, "Yeah, I want some of that. Now, a company that also made it public that I have watched since 2019, which I like very much, is the Cerabics folks. They have they build super large chips, and if you've attended our K2 sessions through the years, you'll notice that I've talked about that company repeatedly, and so you know much like Nvidia when they first hit the market, nobody really knew about them. Nobody really knows about those guys. So,

Brian F. Tankersley, CPA.CITP, CGMA 03:13
and I will say that most of you that have had computers in the past that were clones that weren't Dell, HP, whatever, AMI BIOS shows up when you're booting, so you know again most of if you've got a HP Lenovo Dell computer, the Dell logo shows up. Well, if you have a clone or something or a server, it usually shows up with AMI as the BIOS through the UFI, the Universal Extensible Firmware Interface. That is again the software that allows the hardware to understand how to talk to the operate how to load the operating system. So anyway,

Randy Johnston 03:50
yeah. So thanks for calling that out, Brian, because I should have done that. But you know the next call out is Fin. Now Fin was also known as Intercom, and what they produced was AI customer service agents. Now the buyer was Salesforce. They did that on June 15 for $3.6 billion, and Salesforce sees themselves as the orchestrator of AI agents of all kinds. So you know Salesforce through the years has made various acquisitions. For example, their the accounting product that they bought Force.com is how it's sold now, is really a pretty big acquisition that they did. But Finn, as a customer service agent, is a big deal. Brian and I had the pleasure of watching a Salesforce presentation at an AICPA meeting, and the lady who presented to us had lots of fascinating content statistics and so forth about Salesforce. But her claim was that agents are handling much of the transaction. Actions, and within the week prior to our recording this for you, I received multiple different reachouts from Salesforce that were agents. One of them said, "You know, I'm actually an agent, so they weren't trying to pretend that it was a human, but it was actually an agent. And Salesforce is doing much of their work today through agents, and Brian, correct me if I'm wrong, but I believe they said over 50% of the transactions were handled by agents today with Salesforce, and so when you start seeing,

Brian F. Tankersley, CPA.CITP, CGMA 05:34
it's very clear that there are a lot of platforms, them including Slack, many others, are starting to talk quite a bit about agentic use, you know. I'm not sure how effective they are, though. You know, that's the thing. Yet, you know, we hear that people are doing this, but usually when they're talking about we're doing this, and they're not talking about, and here's the financial impact of doing it. That means that it's still finding its sea legs is what I'm seeing.

Randy Johnston 06:04
Yeah, that is probably true, Brian. And when I consider these things, I know they're going to get better because here's another maybe statement of of direction, and it's pretty factual at this point. The AI frontier models, in other words, the anthropic clods and the OpenAI ChatGPTs and the Gemini's are all currently operating at an IQ level of about 130, and it's projected that the AI frontier models will operate at the IQ level of about 150 by the end of the year, well, that tells you that you know if you think about an IQ of 150, and that isn't us, but you know in the big picture of things, there's only about one in 3000 people that have an IQ of 150 and above. You know you think about Mensa and all those type of things, but the bottom line is today, AI is smarter or will be smarter than 99.7 percent of all humans. So the agents don't feel like a human yet, but it's clear that they're headed to become more human-like. And this whole idea about AI becoming artificial general intelligence or AGI, that's going to arrive a lot sooner than I thought. Brian has heard me talk about this before, where I think AGI would arrive by about 2050, and then it became 2040, and now it's even earlier as I'd see it. But you know, it reminds me of one of my favorite posters from the past, Brian. If one of our listeners has one of these, I'd love to have one. It's a picture of Einstein that basically says, "Don't trust anyone over 30. That's crossed out. Over 40. That's crossed out. 5060. crossed out. 70 crossed out. Well, I'm doing the same thing to our listeners here in reverse. I can't tell you exactly when this is going to arrive, but the really involved and smart people right now are suggesting 2035. Well, 2035 is not that far from today, but we got here because agents don't feel real today, but as AI becomes voice-oriented as the goes on, they're going to get better and better at feeling real.

Brian F. Tankersley, CPA.CITP, CGMA 08:32
But remember that knowledge and intelligence is not the whole equation here. Okay, know-how and relationships and being able to relate to people, you know, this is, you know, I want you to imagine that we've got a PhD candidate with no person, no interpersonal skills, that is this agent. Okay, so it can have the right answer, but if it hacks everybody off, it's not going to make any difference. So we have to again kind of keep this in perspective here, and again, don't panic because, well, first off, panicking is not going to do any good, and secondly, there there's a lot more to life than IQ points. Okay, there's eek, there's there's all kinds of other things, and so I want you to get that everybody's talking about this now, and it is absolutely amazing. But it doesn't mean humans are going to get are getting replaced tomorrow. Okay, so don't don't get too far ahead of the curve here.

Randy Johnston 09:32
Yeah, and you know, as Brian was talking about that, we have another accounting technology lab on advisory services, and advisory is a big thing, and the human element is what really drives advisory. Unfortunately, too many accounting professionals try to demonstrate that they're really clever and try to deliver professional services in a clever way. They believe that to be competitive, and that's that absolutely is doable. But in advisory services, those services are secondary and tertiary services, and the primary services are all around the human elements. So this ability to be human is a big deal, and that's where I think the agents are still struggling to find their legs. Well, speaking of something we do as humans, you know, a lot of us have streaming services, and in other podcast episodes, we've talked to you about reducing the amount of fees that you're paying to different services. Now, this is true on personal streaming services. The Roku's of the world are a platform that enable that, but you have Disney, and you have Prime and you have Hulu and you have YouTube and how many do you need me to name? But I thought it was a fascinating acquisition. Also, the middle of June, a $22 billion transaction where Fox bought Roku. Now we've recommended Roku's for a long time. I used Roku yesterday, for example, and we think that that's a wonderful way to build a whole home streaming service and to enable lots of these other pieces. And there's a lot of TVs that you buy in the marketplace that are Roku-based smart TVs. The thing that you should know is that Roku's provide first-party viewer data. So what you're watching is reported by Roku, and Roku traditionally had kept that data somewhat private. They probably were selling the data. I figure they were based on some of the changes that we saw in Roku, but post the june 15 acquisition, the amount of changes on the platform have been pretty stunning. Now, Brian, I know you've had you know sniffers, if you will, on your smart TVs in your home in the past, and you also noted as we were prepping for the podcast today another pretty interesting transaction.

Brian F. Tankersley, CPA.CITP, CGMA 12:04
Yeah, so Walmart purchased Vizio as well. So the Vizio, the TV company, and Walmart purchased it to get the information out of it. And again, that was a multi-billion-dollar acquisition too for basically commodity low-end TV sets. And now you know we've got one of those at a company that I have some investment in the conference room, and one of the things that's cool about those things is they all come with a Roku device built in, so they're all smart TVs, and they're relatively inexpensive. I will say that my mother-in-law has a TCL Roku TV, and it I ran Wireshark against it, and north of 40, it tried to contact north of 40 websites in China, and I know this because I had the logs to prove it from my router, and so I had to actually, I had to actually set up a separate IoT network just for it to be separate, so that it could talk to all those places in China, because it creeped me out that I had north of 40 places that my TV, my mother-in-law's TV was trying to talk to. So it's you know it's there's a lot more data getting picked up than you may think.

Randy Johnston 13:11
Yeah, and as we spoke to you earlier in a separate accounting technology lab about some of the hardware develops developments in security, we remind you again that come March one of next year, the FCC is going to ban certain types of home routers, and we recommend that you consider products like the Ubiquiti Dream machines for every team member's home and possibly for your own office. Those things are trying to shut down and block some of this traffic. Further, we recommend those units because you can create multiple segments: one that is for your team member, one for their spouse, one for their kids and guests, and one for the Internet of Things. So you can run multiple segments on these, as providing more protection. And we think you should be doing that in your office too. And we will see more and more of these speaker devices because it's clear that Amazon has also changed the way the Alexas work, that Google's changed the way the home devices worked, and so forth. So all of these speaker devices and smart TVs are monitoring us. One of my friends called it out so beautifully this past week, and she basically said to me, "You know, I actually enjoyed when our devices weren't so smart because they worked all the time. And now that I have smart TVs and smart refrigerators and smart stoves and smart cars, this much of the time when they break, they don't work at all. But you know, on a smart washer, you know, if it doesn't want to work, wake up today and work, it doesn't. But an old washer, you turned it on and the water ran, and you got a clean set of clothes.

Brian F. Tankersley, CPA.CITP, CGMA 14:56
And I've experienced that with my 19 Forerunner where. It has apps that you can add to the. It had apps that you could add to the entertainment system that would do all kinds of other things, and the support for it has now been disabled because it was a 2019 product, and so it's, you know, it's more than seven years old, and so Toyota said bye bye. Hey, one quick thing I wanted to share with you all: there is a there is a GitHub site that has a lot of free streaming content. I've got a short link for it. It's cpa t e.ch cpa t e.ch forward slash ip tv, and that's the that is a site that is a GitHub site that literally has 1000s of IP streaming, you may have to watch them on VLC, which is an open source tool. But I found this one the other day, and I thought it was actually kind of interesting. Anyway, well, we've

Randy Johnston 15:50
we've got a few more for you, and there's another hardware one, Synaptics, who makes edge AI processors, and they were purchased by On Semi june 25 for about 7 billion, and so every time I see a hardware purchase, I realize that's one group that has been innovating that may or may not innovate more because the teams that are doing all that development work kind of get assimilated into the the company. And I won't go back and tell old history, but I've seen this story told over and over again. Now, an acquirer of a lot of different systems right now is Progress Software, and Progress bought an AI tool called Domo, which we've taught about in our K2 courses. Domo is a BI analytics data integration tool, and I'm watching progress by this. And they have obviously bought other products that you might be aware of, like ShareFile. And so this acquisition was like another interesting one in progress's approach. But there's also another database that we have Recommended traditionally Airtable, it's a no-code database that does workflow and helps with AI agent orchestration, and a group called Bending Spoons bought that in early August for about 1.2 billion, and in other sessions, particularly the AI router session and others we've produced for you over the past month or two. We've been talking about AI orchestration platforms. How everybody seems to be wanting to build one of these or wanting to have one of these. Now,

Brian F. Tankersley, CPA.CITP, CGMA 17:35
and I've seen a number of CAS practices in particular use Airtable to great effect. But again, it is a it is an automation platform, and you got to make a time investment like you do with anything where you're doing heavy automation. But I've seen again some folks be very successful with it.

Randy Johnston 17:53
Now we have admired the work of good quality value added resellers and integrated software providers, those the ISPs that are out there, and one of those that was acquired recently was a group called Bangor. Now they had Sage Intacct construction implementation workflow and some AI technology that they developed, and Sage purchased those that company august 18. Now the amount involved was undisclosed, so it's not clear how much that was, but we rarely see a VAR purchased by a publisher unless there's a tool that they think they can extend the platform worth. So I think Bangard had actually built some of those types of tools. We've seen other ones like that, but the last few that we want to cover with you today, and the one that really started this whole discussion was the open router acquisition. Around $8 billion on August 19th was spent by Stripe to get this AI token access gateway, also called AI routers, and this will let you choose your token consumption from hundreds of models. Open Router had at least 400 models that they were accessing as of May, and at various times I've checked Open Router and seen maybe 900 of these models or more. So as part of your AI strategy, you're going to have most assuredly some sort of an AI router capability. Now, it might be provided by your provider. It may be orchestrated by you doing some various activities to get different router models. You may continue to use Open Router and feel good about Stripe, you know, charging you a little percentage a bip on the token costs, but we encourage you to look at and listen to our podcast on AI routers. So, Brian, any comment in this area?

Brian F. Tankersley, CPA.CITP, CGMA 20:03
You know, I think the I think you know again the business model here is they're really buying. If you think about setting up API keys and these relationships and everything, once stuff gets embedded in the all these embedded systems with the API keys and tools like Open Router, it's very expensive and difficult to switch. And so, really, I see Stripe really just buying revenue streams where they're going to get a piece off of this, and they're going to be able to jack the margin that they're getting on the tokens and still retain the relationship. So it's a, it's an interesting thing here. You know, the Hugging Face one is also interesting that has OpenAI model data sets and application platforms. The reason that one's so interesting is, first off, OpenAI's most recent model seemed to have accidentally hacked Hugging Face. But again, it's a. I think it's an important platform in here. I also think it's important for us to acknowledge that NVIDIA is the acquirer here, and times aren't going to get any better for Nvidia. I mean, you look at their you look at their stock price. What's their market cap right now? Last I heard, and again, this is not authoritative, but last I heard, their market cap was like four and a half trillion dollars. Which at the point you're talking about four and a half trillion dollars, I'm wondering, is this a real number or not? You know, it's it kind of makes me think that we have, we don't have dollars, we have pesos, you know, yen.

Randy Johnston 21:27
Anyway, so interesting on your comment there because Nvidia has become at various times the most valuable company in the stock market, and I think 5.3 trillion was the last number I heard, Brian. Just so you've got that number in mind, and the stock has really cratered. It's down to $219 or so, and you know it peaked much higher.

Brian F. Tankersley, CPA.CITP, CGMA 21:53
So, what does the stock price of 219 put the market cap at?

Randy Johnston 21:57
About 535, 3 trillion, so you know that's

Brian F. Tankersley, CPA.CITP, CGMA 22:03
amazing.

Randy Johnston 22:04
Yeah, it really is. But you know, Nvidia has been as high as 240 over the past year, and

Brian F. Tankersley, CPA.CITP, CGMA 22:11
maybe we need Jensen Huang to run the Treasury Department for the government.

Randy Johnston 22:14
It could be, but you know, Brian properly calls out the agents inside OpenAI. What should I say? Clandestinely hacked Hugging Face.

Brian F. Tankersley, CPA.CITP, CGMA 22:29
And you saw my air quotes, those of you watching on video. And the reason is that the the computer security capabilities that were in Claude Mythos were so high that I don't really trust that it was really that much of an accident, and again, I don't mean to be mr. Black Helicopter out here, but it just seems very odd that right after a significant breakthrough that improves computer security and pen testing on Claude, who has been eating the coder eating lunch, the OpenAI coder lunch for months. It's odd that it suddenly came out and did that.

Randy Johnston 23:06
And there were other reports that earlier in the year, other companies were hacked by OpenAI's agents, and so the reporting that's been coming out on that has been fascinating. Now it's not for today's merger acquisition piece, but it is clear that the warning bells are out on these AI platforms. You know, with Jacob Coxon resigning two months before he had his stock holdings completely vested, you know, said I just can't do this, and others are coming out. But we know that the AI security risks are great, and the AI attacks are great. And approximately a week before we recorded this session for you, I, I am still thinking I was attacked and hacked by an AI attack vector because it was fascinating. I'd never seen anything like it, and I know that I you know did all of the good hygiene and all that. Something happened to me, and I'm very cognizant about how I work, and it just smelled like an AI attack, but I can't confirm it.

Brian F. Tankersley, CPA.CITP, CGMA 24:25
I will say that I've used Pen Test GPT, which is a which is a container you can run that will try to do pen testing, penetration testing, or security testing of a system, and it's there. I also want to remind you here that the you know the hallucinations and problems you have tuning very capable AI models. You've heard me compare that previously to mental illness, and if you think about the antisocial things that are done by human beings who are mentally ill, you know where they harm other people or they steal things, take things that aren't theirs or other things. Like that, I want to remind you here that if we have mentally ill models, they're going to do things like try to hack people, and so this, I think, part of this again is us just getting used to having these new actors in the marketplace that have their own set of problems, and those problems sometimes do things that are not acceptable in our space because you know they don't have to worry about going to jail.

Randy Johnston 25:26
Well, and one more acquisition that's kind of of that ilk, you know, SpaceX has their Grok engines and purchased the AnySphere Cursor product on June 16 for 60 billion. Now, what was interesting about that is that OpenAI stopped supplying their models to Cursor after that acquisition, and that was about a billion-dollar partnership that OpenAI walked away from. So, you know, when you think about the coding tools, it is clear that it's one thing to use AI for chats and agents. It's another thing to use AI to create code, the vibe coding that we recorded an episode for you on about six months ago or more. Probably about time to update that, probably Brian, based on the changes. But you know, bottom line here is these acquisitions are all pointing towards future trends, and we're seeing consolidation of the AI engines. We're seeing consolidation of the hardware engines, hardware platforms that things can run on. So you know, merger and acquisitions can help predict the future, and that's we wanted to call out a few that we thought could affect you directly. So, Brian, any final parting thoughts for our listeners today?

Brian F. Tankersley, CPA.CITP, CGMA 26:48
We live in interesting times, and stay tuned. You know, if you look at the amount of capital that's out there right now, and the high market values that we have, high historical market values that we have in both stock market and the amount of capital that's getting moved around right now, we're going to see a lot of silly season coming up here. And so, just kind of pay attention here. I think you do need to you need to watch the news, and when a tool you have gets acquired by somebody, you need to start. You need to revise your contingency plans for what you're going to do if this product is discontinued, because that happens more often than I think a lot of us care to admit. And you know, again, or they, or the price gets raised 20% a year for seven years in a row. You know, it either becomes physically unavailable or financially unavailable in many situations, and so you need to, you know, when this happens, you need to know that something big's changing, and you need to get ready.

Randy Johnston 27:47
A beautiful summary thought, thank you, Brian. And I would just say, and this is not a liability limitation from our side, none of the acquisitions that we talk about are financial or investment advice. We're just trying to make you aware of what's happened in the market, and we'll keep making you aware of what's in the market in the accounting technology lab. We look forward to having you listen again in the near future. Good day.

Brian F. Tankersley, CPA.CITP, CGMA 28:13
Thank you for sharing your time with us. We'll be back next Saturday with a new episode of the Technology Lab from CPA Practice Advisor, have a great week.