Established in 2011, CrowdStrike (CRWD 0.14%) became a trailblazer in developing and employing traditional AI-powered cybersecurity solutions on its Falcon platform over the last decade. However, when OpenAI introduced ChatGPT in late 2022, it introduced fantastic possibilities into virtually every industry, including cybersecurity.
ChatGPT is a chatbot based upon generative AI -- a system that can generate new audio, visual, or textual creations based on examples it has seen before. For example, a generative AI trained on a dataset of human conversations could produce discussions that sound like they were between real people.
Think about the potential benefits of cybersecurity companies training generative AI systems on data collected from previous security incidents. With this advanced AI, they could identify new malicious code and methods of breaching security that humans may not have thought of yet, and automatically block these threats when they appear. Adding generative AI-based systems could allow them to create a new level of virtually impenetrable cybersecurity.
As CrowdStrike investors ponder the future of cybersecurity, one crucial question emerges: Will the company be the first to implement an advanced generative AI solution in its arena and use that to solidify its position as a leader in the industry? Or will this new technology level the playing field, allowing other cybersecurity platforms to overtake its position? Informed investors will bet on CrowdStrike becoming even more dominant in its space. Here's why.
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Introducing Charlotte AI
On May 30, CrowdStrike introduced Charlotte AI, a new cloud-based generative AI platform focused on cybersecurity. The company describes the product -- currently in beta testing -- as a "new generative AI cybersecurity analyst that democratizes security and helps every user of the CrowdStrike Falcon platform -- from novice to security expert -- become a power user."
Charlotte AI operates similarly to ChatGPT, except it only answers Falcon platform-related questions. The company trains Charlotte on massive datasets of text and code, giving it a deep understanding of organizations' real-world threats. Charlotte AI can do a variety of things, including:
- Identify and classify threats
- Generate new ideas and insights
- Automate tasks
Additionally, this AI's expert analysis could help solve the growing problem of a global shortage of cybersecurity professionals. According to a 2022 workforce study conducted by (ISC)2, even though 4.7 million people work in cybersecurity globally, to fully meet the cybersecurity needs of the world's organizations, another 3.4 million professionals in the field would be required.
Heavy competition in the cybersecurity space
CrowdStrike is only one of many companies participating in the gold rush to use generative AI in cybersecurity.
Microsoft introduced Security Copilot in March. It is a large language model, a form of generative AI designed to generate human-quality text and code. The product is still in private preview, meaning it is only available to beta testers, and its features are only partially complete. Still, it could eventually be a valuable tool for enhancing the skills of security professionals.
In early May at its annual I/O developer conference, Alphabet's Google introduced Sec-PaLM -- a security-focused version of its PaLM 2 language model. The Sec-PaLM model powers many new Google security products, including Google Cloud Security AI Workbench, and can perform similar tasks to those performed by Charlotte AI. It, too, is still under development.
In addition, there are companies like Palo Alto Networks, a significant competitor to CrowdStrike, which signaled its intentions to launch a proprietary security-focused large language model within a year on the company's fiscal Q3 earnings call in May. SentinelOne, another competitor, released a threat-hunting platform based on its proprietary large language model in late April.
Eventually, every cybersecurity-related company could have its own large language model, so what will differentiate CrowdStrike from its peers?
Charlotte AI's most significant advantage
The limiting factor of generative AI is that it's only as good as its training data, so cybersecurity companies will need to use high volumes of quality data to achieve great results. Low-volume, incomplete or poor-quality data will lessen the effectiveness of a generative AI and cause it to make mistakes.
Many believe that Crowdstrike has one of the most extensive and highest-quality datasets in the industry, something Michael Sentonas, co-president of CrowdStrike, alluded to in a blog post:
The models powering the bevy of security chatbots, co-pilots and workbenches hitting the market will always be only as good as the data they utilize. Large language models (LLMs) are built to incorporate knowledge from external data stores, as well as data generated from technologies like the Falcon platform. We believe CrowdStrike has the industry's best and highest-fidelity security data and human expertise to augment LLMs for security use cases and for powering the future of generative AI in security. While LLMs will be commoditized over time, the data the models use will not. This is why CrowdStrike customers are positioned to benefit now and in the future from new services built with the Charlotte AI engine.
There is a reason to believe its bold claims about having the best data. Before this emerging generative AI era, its proprietary dataset helped its traditional AI rise to the top of the cybersecurity industry. Most experts rank it today as the best security solution. For instance, in 2022, Gartner rated the Falcon platform as a leader among endpoint protection platforms for a third consecutive year -- a difficult feat in a competitive market. Based on how effective its products currently are, you might conclude that its data is a competitive advantage.
Suppose you believe the data used to train the large language model powering Charlotte consists of the best and most diverse dataset. In that case, its generative AI will likely perform better than most competing cybersecurity company offerings and would help CrowdStrike become even more dominant in the years ahead.
