DarkTrace: A Cyber Security Star Makes an Analyst Bayes at the Moon

March 10, 2023

DarkTrace is a cyber security firm which used Sir Thomas Bayes’s math to thwart bad actors. “Fresh Clouds for Darktrace as New York Hedge Fund Claims Concerns Borne Out” states:

Quintessential Capital Management, which previously expressed its “fear that sales, margins, and growth rates may be overstated” today said: “Darktrace’s recent financial results are consistent with our thesis: growth, new customers, cash generation and profits are all shrinking fast.

Bayes works for some types of predictive applications. I think the disconnect between the technical methods of DarkTrace and the skeptical venture firm may be related to the distance between what smart software can do and what marketers say the smart software does. In that space are perched investors, stakeholders, employees, and customers.

What has caused a market downturn? The article says that it may be a consequence of ChatGPT? Here’s a statement I noted:

The cybersecurity business said ChatGPT “ may have helped increase the sophistication of phishing emails, enabling adversaries to create more targeted, personalized, and ultimately, successful attacks.” “Darktrace has found that while the number of email attacks across its own customer base remained steady since ChatGPT’s release, those that rely on tricking victims into clicking malicious links have declined, while linguistic complexity, including text volume, punctuation, and sentence length among others, have increased, the firm said.

Is this a case of DarkTrace’s smart software being outfoxed by smarter software? I still believe the marketers bear the responsibility. Knowing exactly how DarkTrace works and the specific results the system can deliver is important. Marketers rarely share my bias. Now the claims of the collateral writers are insufficiently robust to support the skepticism of tweeting analysts at Quintessential Capital Management.

Stephen E Arnold, March 10. 2023


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