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Chris Boos, one of the country's best-known tech entrepreneurs and star of the local artificial intelligence (AI) scene, is selling his Frankfurt-based company Arago to Wisekey AG in Geneva, a specialist in IT security.
For the first time, Boos and Wisekey founder and CEO Carlos Moreira comment on the reasons why they decided to merge and why Artificial Intelligence (AI) has a trust problem.
WORLD:
Mr. Boos, you have decided to sell your Arago company.
Business has been sluggish recently, you posted losses.
Now you are selling your foundation to Wisekey.
Were you in need of support or what is behind it?
Chris Boos: The
fact that the AI industry is developing more slowly than expected is a global phenomenon and not a special problem for Arago.
Many companies are reluctant to use AI, many for security reasons, and this is of course also reflected in the business of AI companies like Arago.
In short, artificial intelligence has a trust problem.
And that's precisely why what Carlos and I want to do here together is pretty ingenious: Because the merger of Arago and Wisekey will establish this trustworthiness.
Arago stands for KI, Wisekey for IT security and digital certificates.
Together we offer a secure platform: Our customers retain control of their data and do not need to work with American cloud providers such as Amazon.
Wisekey boss Carlos Moreira (left) and Arago founder Chris Boos want to develop solutions for artificial intelligence together
Source: Matt Greenslade / photo-nyc.com
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WORLD:
Many people distrust AI.
Some worry that it will become independent, for others it is intricately complicated, and for others it is too expensive to use.
Boos:
Many people, especially in Europe, are afraid that AI will rule the world in the next year.
This is utter nonsense, but the fears are real.
Managers, for example, try to have complete control over the AI in their companies and predict each of their decisions.
But of course that doesn't make sense, because then you might as well do the work yourself.
No, it's about being able to trust the AI!
And this is exactly where the Wisekey security certificate comes in: because it guarantees that incoming and processed data cannot be manipulated.
WORLD:
But that doesn't take away people's fear of a possibly overpowering AI.
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Boos:
It should, because machines have an “I” or “self”.
This means that everything a machine “knows”, it knows either through direct communication with people or through the analysis of data in the system.
If you can trust this communication and this data, then you can also trust the machine that it doesn't develop a life of its own.
Chris Boos, founder of Arago: You have to be able to trust the AI
Source: picture alliance / Geisler-Fotopress
WORLD:
Wisekey takes over the Arago majority in the course of a capital increase and then buys the rest. With the merger, you will become the second major shareholder alongside Wisekey founder Carlos Moreira.
Boos:
Oh yeah sure.
Carlos and I will be the major shareholders.
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WORLD:
Will the “Arago” brand be retained?
Boos:
We don't know yet.
It is possible that we will also give the new company a new name.
Carlos Moreira:
Yes, that is conceivable.
We either combine the two names or choose a new one, which may also indicate the type of technology we offer.
WORLD:
The combined company has its headquarters in Geneva.
All Arago jobs in Frankfurt will be retained?
Surely you hope that the merger will also result in savings.
Boos:
We are a growing company.
That is why we cannot do without our German engineering team.
It would be just stupid to fire a team that produces this software.
Of course we are also looking for synergy effects, but since we are a growing company in a growth market, there are more opportunities than disadvantages for everyone.
Moreira:
I assume that we will expand our workforce.
Our team in France, which develops semiconductors and the only European microchip, will, for example, forge very close relationships with our Arago colleagues in Frankfurt.
Because Germany is a leader in the digitization and automation of production processes, i.e. in the Internet of Things.
And we will concentrate teams in Germany because this is the first market we want to conquer.
The fact that we have our headquarters in Switzerland naturally also ensures trust.
Switzerland is a good country for trust because it is neutral.
And then of course we have our American team, which is now growing very quickly.
Carlos Creus Moreira, founder, CEO and Chairman of the Board of Directors of the Internet security company WISeKey: Switzerland is a good country for trust
Source: picture alliance / KEYSTONE
WORLD:
Your data center is located in bunkers in the Swiss Alps?
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Moreira:
Yes, there are three bunkers.
They are from WWII and are great for our purposes.
These bunkers are available to IT security companies like ours, among others.
Switzerland invests a lot in this industry because it wants to become a digital center of trust, just as it is a center of bank secrecy and bank anonymity.
This is a new vision for Switzerland of the future: to be a trustworthy repository for data.
WORLD:
Mr. Boos, in future you will be bound by the instructions of CEO Carlos Moreira.
Boos:
Yeah, good.
No problem.
Moreira:
Formally, that's correct.
But we're not a particularly hierarchical company, Chris and I see each other as equals.
As the CEO, I take care of the finances, Chris, as the chief technology officer, looks after the products.
This combination is a guarantee that the company will be very successful.
Boos:
That's a really important point: Carlos and I have known each other for seven years and are very similar personalities in terms of corporate governance in general.
We try to tackle the big problems and not just get rich quick.
Running a public company is something Carlos can do better.
And when it comes to tech, you won't find many people better than me.
One and one is much more than two because there is no overlap.
WORLD:
Chris Boos is the most prominent AI entrepreneur in Germany, Wisekey is almost unknown in this country.
They sell security software.
Who needs that and what for?
Moreira:
I'll give you an example: Daimler uses our technology to protect the operating system of its vehicles.
Because if someone breaks into such an operating system without authorization, they can access your accelerator pedal or steering wheel.
That is life-threatening.
In short, we make it difficult for a hacker to break the security mechanisms of your car, cell phone, computer, email address and countless other applications.
And with our software we also ensure, for example, that employees cannot simply upload data from companies, be it car manufacturers or banks, into a data cloud.
Boos:
The interesting thing is that with our security software you could theoretically even put data in the Amazon, Microsoft or Google cloud.
Even there, they are secured against access and are not accessible to Amazon, Microsoft or Google.
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WORLD:
When you protect operating systems, you gain and generate large amounts of data.
Moreira:
Yes, and this is where Arago comes in.
Your car and your router at home work in the data cloud.
Together with Arago, we can now analyze this data and, for example, make repairs, maintenance or safety decisions at an early stage.
WELT: It
seems logical to base such evaluations on data, but how can something like this be made accessible to smaller companies with smaller amounts of data?
Moreira:
In order to make AI decisions available for every company, we will be the first publicly listed company to launch a blockchain-based token for AI transactions with “Wisecoin”.
This means that the use of AI in companies can be paid for directly from the process.
This makes high investment costs for medium-sized and small businesses superfluous, and artificial intelligence can be used as required without intermediaries.
WORLD:
Wisekey currently has a market capitalization of around 85 million euros.
Arago was valued at 93 million euros in the merger.
Where do you see the company value in the coming year?
Moreira:
The revaluation is based on the huge upside potential of the market.
While security companies like ours are valued at four times their sales on average, in the US it is 55 times.
We are therefore aiming for an IPO of our combined company on the Nasdaq in New York.
If our total sales are $ 50 million in 2021, I expect a market cap for Wisekey plus Arago of $ 500 million to $ 750 million.
This is the goal of our IPO planned for the end of 2021.
Cyber security is becoming increasingly important.
China and the US are investing billions here, and many security companies are supported by the governments, for example Palantir, which works for the CIA and the Pentagon, among others.
But Europe cannot afford to be dependent on China or the US.
We need our own secure AI platform and we are building it together with Arago.
Boos:
You know that I have always talked about the need for a European platform that enables secure automation and can act as a trustee for the data and data usage of the industry.
That is exactly what we are providing with the merger of Wiesekey and Arago.
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