Business of Tech: Daily 10-Minute IT Services Insights

Cyber Budgets Shrink, GPT-5 Faces Backlash, FedRAMP Speeds Up, Vendors Squeeze MSPs

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Aug 13, 2025

State and local governments are facing daunting cybersecurity funding challenges as federal support dwindles. A lack of investment leaves many vulnerable to cyberattacks from nation-state actors. Meanwhile, the rise of GPT-5 brings backlash, prompting new security measures from NIST to safeguard AI systems. Additionally, the podcast discusses shifts in payment policies and workforce adjustments at ConnectWise, underlining the need for IT service providers to adapt and streamline operations.

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INSIGHT

Federal Cyber Support Is Wobbling

Federal cybersecurity support is shrinking, leaving many state and local governments underfunded and exposed.
Dave Sobel warns MSPs to sell a fixed-price minimum viable cyber bundle under $100,000 and document applicable grants.

INSIGHT

NIST Moves To Standardize AI Security

NIST will issue AI security guidance covering securing models, adversarial AI, and using AI for defense.
Legislative efforts and more NIST funding indicate a push to standardize AI hardening and third-party evaluation.

INSIGHT

FedRAMP Approvals Now Move In Weeks

FedRAMP cut cloud authorization times from over a year to roughly five weeks with the 20x program.
This accelerates government cloud adoption and pushes vendors and MSPs toward FedRAMP stacks.

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The Cybersecurity and Infrastructure Security Agency (CISA) is facing significant criticism from state and local officials who feel abandoned due to diminishing federal support for critical cybersecurity programs. Many officials are concerned about their increasing reliance on self-driven initiatives, especially after cuts to the Multi-State Information Sharing and Analysis Center, which has been a crucial source of cybersecurity intelligence for over two decades. A recent survey revealed that a substantial portion of state and local governments lack adequate funding for cybersecurity, with 22% allocating no funds and 42% operating with annual budgets of less than $100,000. This situation raises alarms about the potential for increased vulnerability to cyberattacks, particularly from nation-state actors.

In response to the evolving landscape of artificial intelligence, the National Institute of Standards and Technology (NIST) is developing new security guidance aimed at addressing the associated risks. This initiative will clarify how AI interacts with cybersecurity, focusing on securing AI systems, the adversarial use of AI, and leveraging AI to enhance cybersecurity measures. Additionally, a bipartisan bill known as the Validation and Evaluation for Trustworthy Artificial Intelligence Act has been reintroduced in the Senate, aiming to establish guidelines for the responsible development and testing of AI systems. House appropriators are also proposing a significant funding increase for NIST, reflecting a commitment to bolster cybersecurity and innovation.

The Federal Risk Management and Authorization Program (FedRAMP) has made strides in streamlining the approval process for government cloud services, achieving a significant reduction in wait times from over a year to approximately five weeks. This shift is part of a broader trend toward more efficient cloud authorization processes, with FedRAMP already approving more than twice as many services in fiscal year 2025 compared to the previous year. This development presents an opportunity for businesses to leverage FedRAMP-authorized stacks for government-related buyers and to build migration strategies accordingly.

OpenAI has recently updated its ChatGPT platform, introducing new models and third-party tool connectors while facing scrutiny over the performance and security of its latest model, GPT-5. Despite the introduction of various user-focused options, security assessments have revealed significant vulnerabilities in GPT-5, prompting concerns about its safety and reliability. As companies like ConnectWise implement new credit card surcharges and adjust their workforce in response to market demands, the overarching theme emphasizes the need for operational discipline and strategic planning in navigating the evolving technology landscape.

Four things to know today

00:00 Shrinking Cyber Budgets, Emerging AI Rules, and Streamlined FedRAMP Signal Shifts for IT Providers

06:43 From Security to SaaS Management, Vendors Roll Out Agentic Features for IT Service Providers

10:25 OpenAI Expands GPT-5 Options, Adds Connectors, but Faces Early Security Backlash

13:41 ConnectWise Adds Credit Card Surcharges, Trims Staff in Strategic Realignment

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