Craig Simon, Senior Solutions Architect at AWS, introduces the AWS Parameters and Secrets Lambda Extension. This new feature simplifies and optimizes the retrieval and caching of parameters from AWS Systems Manager Parameter Store and secrets from AWS Secrets Manager for Lambda functions. The extension reduces cold start times and API calls, improving performance and cost-effectiveness. Simon demonstrates how to enable and configure the extension, explains its environment variables, and shows a practical example using Python code to access parameters and secrets.