The Tech Reshoring Revolution: How AI will be Transforming the Tech Industry and the Importance of Data Privacy and Security

The technology industry is on the cusp of a significant shift, driven by the rapid advancement of generative AI (GenAI) tools. As these tools mature and become more sophisticated, they are poised to revolutionize the way software is developed, with far-reaching implications for the global tech supply chain. You should not be surprised to see an AI Center of Excellence (CoE) around the corner. With the US domestic knowledge workers beefing up on AI literacy, expect to see a reduction of US companies relying on their offshore vendors for managing knowledge capital and business critical outcomes.

One of the most notable changes we can expect to see is a wave of tech reshoring. US companies, which have long relied on offshore development models to reduce costs and access a broader talent pool, will increasingly find it attractive to train their domestic workforce on AI copilots being offered as part of MS Copilot, Google's Workspace Gemini (on sale for almost 1/2 off per seat at the time of this writing :-), and Amazon's Bedrock. These using OpenAI, Bard [i know, whatever], and Claude; respectively. These tools will significantly increase efficiency and productivity, enabling US-based teams to deliver high-quality software faster and more cost-effectively without the same risks when a knowledge capital supply chain is super glued to vendors. Once token size allows for an entire code base, reshoring will increase another magnitude of order.

However, this shift towards domestic AI-assisted development also presents new risks and challenges. As companies bring more of their software development in-house, they will need to ensure that their data governance and data privacy controls are robust and up to date. The use of AI copilots requires access to vast amounts of sensitive data, including proprietary code, customer information, and other confidential assets. Even companies with very thourough onboarding and offboarding practices, find it almost impossible to keep up with access creep as people change roles internally and get promoted. A VP should never have root access to anything. Am I right? Without proper safeguards in place, this data could be vulnerable to breaches, leaks, or misuse. Last Thursday I was informed of an incident at a colleague's employer whereby fine tuning of an internal LLM had ingested company confidential salary data and could be exposed via prompting methods.

To mitigate these risks, US companies must prioritize security and AI governance as they embrace the reshoring trend. This means investing in strong access controls, encryption, and monitoring tools to protect sensitive data at every stage of the development process. It also means establishing clear policies and procedures for data handling, as well as regular training and awareness programs to ensure that all employees understand their responsibilities when it comes to data security. It's not uncommon today that employees might get an email about using GenAI, but structured training is extremely rare in the US workplace. It was reported recently in LinkedIn's top news by Jake Perez that 85% of Gen Zers BYOAI to work. More than three out of four millinneals and Gen Xers are doing the same.

But the importance of AI governance goes beyond just data protection. As AI implementations become more sophisticated and use agents (autonomous), there is a risk that they could make decisions or generate outputs that are biased, unethical, or even harmful. To prevent this, companies must develop robust governance frameworks that ensure AI systems are transparent, accountable, and aligned with human values. Let's save this discussion for later. Did you know there is a white house blueprint for the AI bill of rights?

This will require close collaboration between technical experts, legal professionals, and ethical advisors to develop standards and best practices for responsible AI development. It will also require ongoing monitoring and auditing of AI systems to identify and address any issues that arise.

The benefits to US employers of tech reshoring with AI are clear: increased efficiency, faster time-to-market, and a more agile and responsive development process. The same outcomes that made Coca-Cola commit $1.1 billion for Microsoft Azure OpenAI services. "...to help employees improve customer experiences, streamline operations, foster innovation, gain a competitive advantage, boost efficiency and uncover new growth opportunities". But to fully realize these benefits, US companies must prioritize security and AI governance as they make the transition. By doing so, they can not only protect their data and reputations, but also position themselves as leaders in the responsible development and deployment of AI technologies.

The technology reshoring revolution is coming, and it will be driven by the power of AI copilots, solutions, and platforms already integrating to GenAI. US companies that embrace this trend while also prioritizing security and AI governance will be well-positioned to excel. But those that fail to adapt and address these critical issues risk falling behind in an increasingly competitive and rapidly evolving industry.