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Cyber-Attacke auf die Schweiz - Prorussische Hacker legen Webseiten in Zürich, Basel und Genf lahm - und loben die SVP

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Cyber-Attacke auf die Schweiz - Prorussische Hacker legen Webseiten in Zürich, Basel und Genf lahm - und loben die SVP

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Mehrere Kantone und Städte wurden Opfer von Cyberkriminellen. Diese begründen die Angriffe mit der Rede des ukrainischen Präsidenten im Schweizer Parlament.

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Cyber-Attacke auf die Schweiz - Prorussische Hacker legen Webseiten in Zürich, Basel und Genf lahm - und loben die SVP

Mehrere Kantone und Städte wurden Opfer von Cyberkriminellen. Diese begründen die Angriffe mit der Rede des ukrainischen Präsidenten im Schweizer Parlament.

Wer am Mittwochmorgen die Website des Kantons Basel-Stadt besuchen wollte, sah bloss die Meldung "Die Website ist nicht erreichbar". Auch die Seite von Genf Tourismus konnte nicht aufgerufen werden. In Zürich stockte das Webportal der Stadt sowie die Seite des Verkehrsverbundes VBZ. Auch andere Kantone und Städte sind betroffen, etwa Schaffhausen. Sowohl der Kanton Basel-Stadt als auch die Stadt Zürich bestätigten die Angriffe.

Verantwortlich dafür ist mit hoher Wahrscheinlichkeit dieselbe Gruppe, die am Montag bereits zahlreiche Webseiten der Bundesverwaltung und staatsnaher Betriebe wie der SBB und der Post lahmgelegt hatte. Zu all diesen Angriffen bekannten sich prorussische Hacker der Gruppe "NoName" auf ihrem Telegram-Kanal. (Lesen Sie dazu: "Wir haben DDoS-Raketen gegen die Website des Schweizer Parlaments geschickt")

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Am Mittwochmorgen verkündeten sie auf dem Online-Nachrichtendienst den Angriff auf die Website www.geneve.com. Diese bezeichnen sie fälschlicherweise als die Seite der Stadt Genf, obwohl sie zu Genf Tourismus führt. Am Dienstag hatten sie die Seiten verschiedener Schweizer Flughäfen angegriffen, der Flughafen Genf war bis Mittwochnachmittag online nicht erreichbar.

Als Grund für den Angriff gibt "NoName" die Rede des ukrainischen Präsidenten Wolodimir Selenski an, welche dieser am Donnerstag per Videoübertragung im Schweizer Parlament halten wird. Selenski würde dabei "um Geld betteln" wollen, schreiben die Cyberkriminellen. Um dann fortzufahren, dass "angemessene Schweizer" dies ablehnen würden. "NoName" verweist dabei auf den "Head of the People's Party of Switzerland", der die Rede harsch kritisiert habe. Dieser habe gesagt, dass die Ukraine versuche, "direkt Einfluss auf den parlamentarischen Entscheid betreffend Waffen- und Munitionslieferungen zu nehmen". Das Zitat stammt von SVP-Fraktionschef Thomas Aeschi, der sich so auf Twitter geäussert hatte.

Die Cyberkriminellen "NoName" greifen seit März 2022 immer wieder Websites in Ländern an, die sich im russischen Angriffskrieg auf die Seite der Ukraine stellen. Darunter waren bisher unter anderem die Seite der polnischen Regierung, der deutschen Aussenministerin Annalena Baerbock, des Hafens von Genua oder der französischen Staatsbahnen SNCF. Die Attacken erfolgten meistens kurz vor Reden des ukrainischen Präsidenten Wolodimir Selenski in den betroffenen Ländern - oder vor Abstimmungen zur Unterstützung der Ukraine.

Man kann "praktisch nichts" machen

Um die Webseiten zum Abstürzen zu bringen, verwendet "NoName" sogenannte DDoS-Angriffe. DDoS steht für "Distributed Denial of Service", was "verteilte Verweigerung des Dienstes" bedeutet. Dabei wird ein Computersystem mit unzähligen Anfragen gleichzeitig bombardiert. Ziel der Angreifer ist es, ein System zu überfordern, bis es abstürzt.

Grundsätzlich gehört die Verteidigung gegen DDoS-Angriffe zum Standard für Cybersecurity-Angestellte. Doch je mehr Anfragen die Angreifer gleichzeitig durchführen können, desto schwieriger wird es für ein System, standzuhalten. Ist der Angriff stark genug, gebe es "praktisch nichts", was man gegen einen solchen machen könne, sagt Cyber-Security-Experte Marc Ruef dieser Zeitung. Daten werden bei einem solchen Angriff jedoch keine gestohlen.

Dass die Rede von Präsident Selenski auf die gleiche Art gestört werden kann, sei laut Ruef theoretisch möglich. Dafür würde "NoName" jedoch Insiderinformationen benötigen, die normalerweise eher Geheimdienste besässen.
Cyberkriminalität in der Schweiz
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Cyber-Attacke auf die Schweiz - Prorussische Hacker legen Webseiten in Zürich, Basel und Genf lahm - und loben die SVP

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Mehrere Kantone und Städte wurden Opfer von Cyberkriminellen. Diese begründen die Angriffe mit der Rede des ukrainischen Präsidenten im Schweizer Parlament.

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Eines der höchsten Risiken für Unternehmen weltweit ist und bleibt Ransomware. Dass das auch für die Unternehmen in der Schweiz gilt, hat Sophos in seiner globalen Studie „State of Ransomware 2023“ festgestellt: 75 Prozent der befragten Organisationen in der Schweiz waren von Ransomware betroffen.

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Unternehmen in der Schweiz sind laut den jüngsten Ergebnissen der Sophos Studie „State of Ransomware 2023" für Cyberkriminelle ein beliebtes Ziel. Nicht nur dass die befragten Unternehmen in der Schweiz zu 75 Prozent von Ransomware-Attacken betroffen sind, es gelingt den Cyberkriminellen zudem bei 91 Prozent der Angriffe, die Daten zu verschlüsseln. Im internationalen Vergleich, der bei 76 Prozent liegt, fällt die Verschlüsselungsrate in der Schweiz damit überdurchschnittlich hoch aus.
„Nach einem Rückgang während der Pandemie sind die Verschlüsselungsraten wieder auf einem sehr hohen Niveau. Kriminelle haben ihre Angriffsmethoden verfeinert und ihre Angriffe beschleunigt, um die Zeit zu verkürzen, in der die Verteidiger ihre Pläne vereiteln könnten", ordnet Chester Wisniewski, Field CTO bei Sophos die Studienergebnisse ein.

Lösegeld zahlen ist nicht die beste Option
Eine Ransomware-Verschlüsselung fordert den betroffenen Unternehmen vieles ab, um die Hoheit über ihre Daten wiederzuerlangen. Die Zahlung von Lösegeld ist eine Option. Diese hat allerdings zur Folge, dass die Gesamtkosten für die Wiederherstellung in die Höhe schnellen. Aus weltweiter Sicht bestätigt die Studie von Sophos, dass Unternehmen, die Lösegeld für die Entschlüsselung ihrer Daten zahlten, ihre Wiederherstellungskosten zusätzlich verdoppelten (750.000 Dollar Wiederherstellungskosten gegenüber 375.000 Dollar für Unternehmen, die Backups zur Datenwiederherstellung verwendeten). Außerdem bedeutet die Zahlung des Lösegelds in der Regel eine längere Wiederherstellungszeit: 45 Prozent der Unternehmen, die Backups verwendeten, konnten die Daten innerhalb einer Woche wiederherstellen, verglichen mit 39 Prozent der Unternehmen, die das Lösegeld zahlten.

„Die Kosten steigen erheblich, wenn Lösegeld gezahlt wird. Die meisten Opfer sind kaum in der Lage, alle ihre Dateien einfach wiederherzustellen, indem sie den Entschlüsselungs-Code kaufen. Denn selbst wenn durch die Zahlung die betroffenen Daten widerherstellbar sein sollten - was nicht garantiert ist - müssen weitere Backups eingespielt werden", führt Wisniewski fort.

Damit nicht genug, denn durch die Zahlung des Lösegelds ist ein weiteres existenzielles Problem nicht gelöst: der Datendiebstahl, der mit Ransomware-Attacken häufig einhergeht. In 34 Prozent der Ransomware-Fälle mit Datenverschlüsselung in der Schweiz stahlen die Angreifer auch Daten - genannt „Double-Dip"-Methode (Datenverschlüsselung und Datenexfiltration). Damit haben die Cyberkriminellen nicht nur ein weiteres Druckmittel, das Lösegeld zu erpressen, sondern auch eine zusätzliche Möglichkeit, die Daten auf dem Schwarzmarkt zu verkaufen. Selbst wenn Unternehmen also ein Lösegeld bezahlen, haben sie keine Kontrolle darüber, was mit den gestohlenen Daten geschieht.

Schwachstellen entdecken, schließen und vorbeugen
Die Suche und Analyse von Schwachstellen ist ein elementarer Bestandteil einer funktionierenden Cyber-Resilienz. Die Studie von Sophos bestätigt, dass Ursache und Ausgangspunkt von Ransomware-Attacken in der Schweiz zu 27 Prozent (international 36 Prozent) ausgenutzte Schwachstellen waren. Erst an zweiter Stelle kommen kompromittierte Zugangsdaten mit 25 Prozent (international 29 Prozent).

Der effizienteste Schutz vor Ransomware-Attacken ist ein integriertes und intelligentes Cybersecurity-Ökosystem inklusive KI, das im Idealfall durch menschliche Security-Expertise in Form von MDR-Services vervollständigt wird. Der Schlüssel zur Reduzierung des Risikos liegt darin, sowohl die Zeit bis zur Entdeckung als auch die Zeit bis zur Reaktion drastisch zu verkürzen. Die von Menschen geleitete Bedrohungsjagd ist sehr effektiv. Erfahrene Analysten können die Muster eines aktiven Eindringens innerhalb von Minuten erkennen und sofort in Aktion treten. Diese zusätzliche menschliche Komponente im Verteidigungssystem ist mutmaßlich einer der wesentlichen Unterschiede zwischen dem Drittel der Unternehmen, die sicher bleiben, und den zwei Dritteln, die nicht sicher sind.

Mehr zum MDR-Service von Sophos erfahren.

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Eines der höchsten Risiken für Unternehmen weltweit ist und bleibt Ransomware. Dass das auch für die Unternehmen in der Schweiz gilt, hat Sophos in seiner globalen Studie „State of Ransomware 2023" festgestellt: 75 Prozent der befragten Organisationen in der Schweiz waren von Ransomware betroffen.

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Cyberattaque contre l'entreprise Xplain: les premiers résultats des analyses indiquent que des mesures sont nécessaires

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Cyberattaque contre l'entreprise Xplain: les premiers résultats des analyses indiquent que des mesures sont nécessaires

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Depuis la révélation de l'attaque par rançongiciel qui a visé l'entreprise Xplain, des examens approfondis sont en cours à l'administration fédérale. Les analyses effectuées jusqu'à présent montrent que les données dérobées comprennent aussi des données opérationnelles de diverses autorités et organisations. Le but est maintenant de comprendre comment ces données se sont retrouvées sur l'infrastructure de l'entreprise Xplain.

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La Confédération ne sait pas pourquoi ses données opérationnelles se sont retrouvées chez Xplain (update)

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La Confédération ne sait pas pourquoi ses données opérationnelles se sont retrouvées chez Xplain (update)

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Des cyberpirates ont mis la main sur des données de plusieurs offices de l'administration fédérale et les ont publiées sur le dark web. La cyberattaque a ciblé le prestataire IT alémanique Xplain et a entre autres touché Fedpol, des polices cantonales, l’armée, les douanes et les CFF. Des données opérationnelles sont touchées car elles se trouvaient sur l'infrastructure de Xplain, ce qui n'aurait pas dû être le cas.

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La Confédération ne sait pas pourquoi ses données opérationnelles se sont retrouvées chez Xplain (update)

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Des cyberpirates ont mis la main sur des données de plusieurs offices de l'administration fédérale et les ont publiées sur le dark web. La cyberattaque a ciblé le prestataire IT alémanique Xplain et a entre autres touché Fedpol, des polices cantonales, l'armée, les douanes et les CFF.

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Bundesrat stärkt den Schutz von kritischen Infrastrukturen

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Bundesrat stärkt den Schutz von kritischen Infrastrukturen

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Der Bundesrat will die Verfügbarkeit von wichtigen Gütern und Dienstleistungen weiter verbessern. Zu diesem Zweck hat er an seiner Sitzung vom 16. Juni 2023 die nationale Strategie zum Schutz kritischer Infrastrukturen gutgeheissen. Mit der Strategie werden Massnahmen umgesetzt, die das Risiko von beispielsweise gravierenden Stromausfällen, Unterbrüchen des Internets oder Störungen der Verkehrssysteme reduzieren.

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Der Bundesrat hat an seiner Sitzung vom 09.06.2023 den Bericht Informatiksicherheit Bund 2022 zur Kenntnis genommen.

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Une coalition de cybercriminels russes menace de paralyser le système bancaire occidental

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Une coalition de cybercriminels russes menace de paralyser le système bancaire occidental

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Après l'attaque ukrainienne qui a paralysé la banque centrale russe le 13 juin dernier, des hackers expérimentés veulent mettre le réseau bancaire mondiale Swift à genoux dans les heures à venir.

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Après l'attaque ukrainienne qui a paralysé la banque centrale russe le 13 juin dernier, des hackers expérimentés veulent mettre le réseau bancaire mondiale Swift à genoux dans les heures à venir.

Ce mercredi 14 juin, une coalition de hackers pro-russes composée de Anonymous Sudan, Killnet et Revil a diffusé une vidéo sur Telegram via le canal MASH qui réunit presque 2 millions de followers. Dans cette vidéo, les porte-paroles des trois groupes se lancent dans une diatribe anti-occidentale, en expliquant que l'argent y a remplacé dieu. Pour punir l'occident, les membres de cette coalition affirment qu'ils vont viser le système bancaire, et précisent qu'il ne s'agira pas d'une attaque DDoS mais d'une cyberattaque dont le but sera de mettre hors ligne le système Swift. Ce réseau relie l'ensemble des banques américaines et européennes et s'il était paralysé, la totalité des échanges bancaires serait rendue impossible. La coalition prévient qu'elle frappera dans les 48 heures.

Cette menace est à prendre au sérieux. Car si dans cette coalition se trouve un petit groupe plus célèbre pour des attaques DDoS, Anonymous Sudan, et un deuxième groupe qui a déjà vécu plusieurs restructurations, Killnet, le danger semble plutôt venir de Revil. Créé en 2019, il est connu pour avoir participé à l'attaque qui avait paralysé le pipeline Colonial aux Etats-Unis, allant du Texas à la Pennsylvanie, le 7 mai 2021. Le coupable était précisément Darkside, une filiale de Revil. Le groupe s'était targué d'avoir un butin de guerre à hauteur de 100 millions de dollars, juste pour une année de travail. Il a été officiellement démantelé par le FSB lors d'une vaste opération des forces de l'ordre russes contre les cybercriminels vivant en Russie en janvier 2022. Le fait qu'ils reviennent au grand jour est troublant. Les rumeurs vont bon train : leurs chefs ont-ils passé un accord avec les autorités russes, négociant la libération des membres arrêtés contre le fait de servir leurs intérêts ? Revil est sans aucun doute le fer de lance de cette coalition et le groupe possédant le plus de succès à son actif.

Revil est connu pour avoir participé à l'attaque qui avait paralysé le pipeline Colonial aux Etats-Unis

Cette opération s'inscrit en effet dans le cadre de la guerre russo-ukrainienne. Mardi 13 juin, des hackers ukrainiens de Cyber.Anarchy.Squad ont paralysé avec succès Infotel. Ce système permet à la Banque centrale russe d'interagir avec les autres banques du pays. La panne a durée au moins deux jours, paralysant les activités bancaires du pays et forçant les membres de la banque centrale à revenir au papier stylo. La coalition de hackers russes souhaite se venger de cette attaque en mettant hors-ligne Swift. A voir s'ils réussiront, car le système est très bien protégé par la CISA américaine (l'agence de cybersécurité américaine) et ses partenaires. La coalition de cybercriminels russes a ouvert un Telegram jeudi 15 juin, il sera entièrement dédié à l'opération à venir.

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Une coalition de cybercriminels russes menace de paralyser le système bancaire occidental

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Après l'attaque ukrainienne qui a paralysé la banque centrale russe le 13 juin dernier, des hackers expérimentés veulent mettre le réseau bancaire mondiale Swift à genoux dans les heures à venir.

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Le système bancaire russe paralysé par une cyberattaque

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Le système bancaire russe paralysé par une cyberattaque

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Des hackers soutenant l’Ukraine ont attaqué l’opérateur Internet russe Infotel. Problème, celui-ci gère l’essentiel des transactions interbancaires du pays. En conséquence, depuis hier, le secteur bancaire est paralysé par cette cyberattaque.

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Des hackers soutenant l'Ukraine ont attaqué l'opérateur Internet russe Infotel. Problème, celui-ci gère l'essentiel des transactions interbancaires du pays. En conséquence, depuis hier, le secteur bancaire est paralysé par cette cyberattaque.

Depuis hier, un élément crucial du système bancaire russe est paralysé par les conséquences d'une cyberattaque de hackers pro-ukrainiens. C'est le Cyber ​​Anarchy Squad, un collectif de pirates qui a annoncé le blocage d'un opérateur Internet russe appelé Infotel. Basée à Moscou, l'infrastructure de cet opérateur serait totalement " détruite " selon les dires des hackers sur leur canal Telegram. Le souci, c'est que cet opérateur est essentiel pour le système bancaire russe. Infotel gère en effet le système automatisé d'interaction électronique (ASEI) pour la Banque centrale de Russie. Autrement dit, le lien entre les banques commerciales, les coopératives de crédit et les entreprises qui utilisent ce procédé ASEI pour sécuriser les échanges et les contrats est rompu.

Le système bancaire russe est bloqué depuis hier en raison de la neutralisation de son opérateur Internet principal par des hackers. © @igorsushko

Un blocage qui dure

Par conséquent, les institutions peinent à se transmettre les informations financières sur les prêts et les transactions. Tout est bloqué ou extrêmement retardé depuis hier. Ce n'est pas tout, puisque les hackers affirment avoir récupéré les bases de données d'Infotel. Ils révèlent ainsi que l'opérateur gère 400 gros clients dont un quart d'entre eux sont des banques. Le reste est représenté par des sociétés de crédit, des concessionnaires automobiles et d'autres opérateurs Internet. Il faut noter que les services en ligne de la banque russe Sberbank sont également paralysés. Le groupe en a également profité pour " défacer " plusieurs sites d'institutions et d'entreprises russes, pour afficher des slogans à la gloire de l'Ukraine.

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Le système bancaire russe paralysé par une cyberattaque

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Des hackers soutenant l'Ukraine ont attaqué l'opérateur Internet russe Infotel. Problème, celui-ci gère l'essentiel des transactions interbancaires du pays. En conséquence, depuis hier, le secteur...

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A Russia-Based Hacking Rampage Hits US Agencies and Exposes Millions

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A Russia-Based Hacking Rampage Hits US Agencies and Exposes Millions

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UNITED STATES CYBERSECURITY officials said that a “small number” of government agencies have suffered data breaches as part of a broad hacking campaign that is likely being carried out by the Russia-based ransomware gang Clop. The cybercriminal group has been on a tear in exploiting a vulnerability in the file transfer service MOVEit to grab valuable data from victims including Shell, British Airways, and the BBC. But hitting US government targets will only increase global law enforcement's scrutiny of the cybercriminals in the already high-profile hacking spree.

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United States cybersecurity officials said yesterday that a "small number" of government agencies have suffered data breaches as part of a broad hacking campaign that is likely being carried out by the Russia-based ransomware gang Clop. The cybercriminal group has been on a tear in exploiting a vulnerability in the file transfer service MOVEit to grab valuable data from victims including Shell, British Airways, and the BBC. But hitting US government targets will only increase global law enforcement's scrutiny of the cybercriminals in the already high-profile hacking spree.

Progress Software, which owns MOVEit, patched the vulnerability at the end of May, and the US Cybersecurity and Infrastructure Security Agency released an advisory with the Federal Bureau of Investigation on June 7 warning about Clop's exploitation and the urgent need for all organizations, both public and private, to patch the flaw. A senior CISA official told reporters yesterday that all US government MOVEit instances have now been updated.

CISA officials declined to say which US agencies are victims of the spree, but they confirmed that the Department of Energy notified CISA that it is among them. CNN, which first reported the attacks on US government agencies, further reported today that the hacking spree impacted Louisiana and Oregon state driver's license and identification data for millions of residents. Clop has previously also claimed credit for attacks on the state governments of Minnesota and Illinois.

"We are currently providing support to several federal agencies that have experienced intrusions affecting their MOVEit applications," CISA director Jen Easterly told reporters on Thursday. "Based on discussions we have had with industry partners in the Joint Cyber Defense Collaborative, these intrusions are not being leveraged to gain broader access, to gain persistence into targeted systems, or to steal specific high-value information-in sum, as we understand it, this attack is largely an opportunistic one."

Easterly added that CISA has not seen Clop threaten to release any data stolen from the US government. And the senior CISA official, who spoke to reporters on the condition that they not be named, said that CISA and its partners do not currently see evidence that Clop is coordinating with the Russian government. For its part, Clop has maintained that it is focused on targeting businesses and will delete any data from governments or law enforcement.

Clop emerged in 2018 as a standard ransomware actor that would encrypt a victim's systems and then demand payment to provide the decryption key. The ransomware gang is also known for finding and exploiting vulnerabilities in widely used software and equipment to steal information from a variety of businesses and institutions and then launch data extortion campaigns against them.

Allan Liska, an analyst for the security firm Recorded Future who specializes in ransomware, says that Clop was "moderately successful" with the ransomware approach. It eventually differentiated itself, though, by moving away from encryption-based ransomware and toward its current model of developing exploits for vulnerabilities in enterprise software and then using them to carry out mass data theft.

And while there may not be direct coordination between the Kremlin and Clop, research has repeatedly shown ties between the Russian government and ransomware groups. Under the arrangement, these syndicates can operate from Russia with impunity so long as they don't target victims within the country and defer to the Kremlin's influence. So is Clop really deleting data it gathers, even incidentally, from government victims?

"We don't think US government agencies were specifically targeted. Clop simply hit any vulnerable server running the software," Liska says of the MOVEit campaign. "But it is highly likely that any information Clop collected from the US government or other interesting targets was shared with the Kremlin."

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A Russia-Based Hacking Rampage Hits US Agencies and Exposes Millions

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The ransomware gang Clop exploited a vulnerability in a file transfer service. The flaw is now patched, but the damage is still coming into focus.

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Russia’s Medvedev says Moscow could strike undersea cables linking Europe to U.S.

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Russia’s Medvedev says Moscow could strike undersea cables linking Europe to U.S.

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One of Russian President Vladimir Putin’s most hawkish allies has suggested damaging undersea communications cables between Europe to the U.S. amid allegations of Western involvement in the September attacks on the Nord Stream natural gas pipelines.

Russian President Dmitry Medvedev, deputy chairman of the Kremlin’s security council, said Moscow should consider taking out the West’s seabed communications cables.

“If we proceed from the proven complicity of Western countries in undermining the Nord Streams, then we have no, even moral, restrictions left to refrain from destroying the cable communications of our enemies, laid along the ocean floor,” Mr. Medvedev said Wednesday on his Telegram social media page.

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Russia’s Medvedev says Moscow could strike undersea cables linking Europe to U.S.

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One of Russian President Vladimir Putin’s most hawkish allies has suggested damaging undersea communications cables between Europe to the U.S. amid allegations of Western involvement in the September attacks on the Nord Stream natural gas pipelines.

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Désaméricanisation : Comment la Chine restructure son secteur des puces électroniques

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Désaméricanisation : Comment la Chine restructure son secteur des puces électroniques

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Sept mois après que Washington ait dévoilé de sévères mesures [dans le contexte de sa guerre commerciale contre la Chine, NdT], les entreprises chinoises redoublent d’efforts pour mettre en place des chaînes d’approvisionnement locales et reçoivent des milliards de dollars de Pékin et des investisseurs.

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Sept mois après que Washington ait dévoilé de sévères mesures [dans le contexte de sa guerre commerciale contre la Chine, NdT], les entreprises chinoises redoublent d'efforts pour mettre en place des chaînes d'approvisionnement locales et reçoivent des milliards de dollars de Pékin et des investisseurs.
Source : The New York Times, Chang Che, John Liu
Traduit par les lecteurs du site Les-Crises

En octobre dernier, les projets de construction d'une imposante usine de semi-conducteurs située dans le centre de la Chine et appartenant à une grande entreprise soutenue par l'État sont tombés à l'eau. L'administration Biden a intensifié sa guerre commerciale en matière de technologie, coupant l'accès de la Chine aux outils occidentaux et aux travailleurs qualifiés dont elle a besoin pour fabriquer les semi-conducteurs les plus sophistiqués.

Certains des employés, de nationalité américaine, ont quitté l'entreprise. Trois fournisseurs d'équipements américains ont presque immédiatement interrompu leurs livraisons et leurs services, et l'Europe et le Japon devraient bientôt en faire de même.

L'installation appartenait à Yangtze Memory Technologies Corporation, ou YMTC, un fabricant de puces mémoire que Xi Jinping, le président chinois, a présenté comme le porte-drapeau de la course à l'autonomie de la Chine. Aujourd'hui, le fabricant de puces et ses pairs s'empressent de revoir leurs chaînes d'approvisionnement et de réécrire leurs plans d'activité.

Près de sept mois plus tard, les barrières commerciales américaines ont eu pour effet d'accélérer les efforts de la Chine en faveur d'un renforcement de l'indépendance du secteur des puces. La technologie et l'argent occidentaux ont disparu, mais les fonds publics abondent pour favoriser la production locale de semi-conducteurs moins perfectionnés, mais néanmoins lucratifs. La Chine n'a pas renoncé à fabriquer des puces haut de gamme : les fabricants tentent de travailler sur le territoire national avec des composants plus anciens provenant de l'étranger et non bloqués par les sanctions américaines, ainsi qu'avec des matériels moins perfectionnés.

Les restrictions sévères imposées par les États-Unis découlent de l'inquiétude suscitée par ce que les autorités de Washington considèrent comme la menace que représente l'utilisation par la Chine de ses firmes technologiques pour moderniser son arsenal militaire. Jake Sullivan, le conseiller à la sécurité nationale, a récemment qualifié ce sentiment de " nouveau consensus " de Washington quant au fait que des décennies d'intégration économique avec la Chine n'ont pas été couronnées de succès, ajoutant que les nouveaux contrôles étaient " minutieusement adaptés " pour s'attaquer aux semi-conducteurs chinois les plus en pointe.

En vertu des règles adoptées en octobre, les entreprises et les citoyens américains ne peuvent plus aider les entreprises chinoises qui fabriquent des puces électroniques répondant à un certain seuil de sophistication. Ces mesures vont au-delà des restrictions commerciales imposées par l'administration Trump à certaines entreprises, comme le géant chinois des télécommunications Huawei.

Lors des tensions commerciales antérieures, Pékin a mobilisé des sommes considérables pour développer des alternatives locales face aux fabricants de puces occidentaux. Mais les composants étrangers étaient alors facilement disponibles et de meilleure qualité, ce qui a dissuadé de nombreuses entreprises chinoises de franchir le pas.

Ces réticences quant à l'utilisation de matériaux en provenance de Chine semblent vouloir se calmer. Les entreprises technologiques chinoises, en amont et en aval de la chaîne d'approvisionnement, étudient actuellement la façon dont on peut remplacer les puces occidentales et les composants connexes, même ceux qui ne sont pas concernés par les contrôles américains. Le Guangzhou Automobile Group, un constructeur public de véhicules électriques, a déclaré en février qu'à terme, il avait l'intention d'acheter la totalité des quelque 1 000 puces qui équipent ses voitures auprès de fournisseurs chinois. Il achète actuellement 90 % de ses puces à l'étranger.

" Dans de nombreux domaines, l'objectif de la Chine est de désaméricaniser les chaînes d'approvisionnement ", a déclaré Paul Triolo, vice-président principal pour la Chine au sein du cabinet de stratégie Albright Stonebridge Group.

Des dizaines d'entreprises chinoises spécialisées dans les puces électroniques sont en train de finaliser leurs plans pour lever des fonds par le biais d'offres publiques cette année. Parmi elles figurent Hua Hong Semiconductor, le deuxième fabricant de puces de Chine, ainsi qu'un fabricant d'outils pour puces soutenu par Huawei.

Les différends technologiques entre les deux plus grandes économies du monde ne montrent aucun signe d'apaisement. L'administration Biden a rédigé, mais n'a pas encore publié, de nouvelles règles qui limiteraient les investissements américains en capital-risque dans les entreprises de puces avancées en Chine. Les investissements étrangers dans le secteur chinois des semi-conducteurs ont déjà chuté cette année à 600 millions de dollars, leur niveau le plus bas depuis 2020, selon les données de PitchBook, qui suit l'évolution du financement privé. Les autorités envisagent de renforcer les contrôles sur des technologies telles que l'informatique quantique ou les équipements de fabrication de puces.

Les restrictions américaines ont incité Pékin à activer un fonds d'État qui était resté inactif en raison du gaspillage et de la corruption : Le " Big Fund " du gouvernement a injecté environ 1,9 milliard de dollars dans Yangtze Memory Technologies Corp (YMTC) en février pour renforcer son action face aux restrictions américaines. Le fonds a également investi récemment auprès de fournisseurs en matériel et en équipement de fabrication de puces, selon les médias d'État.

Grâce à ces nouvelles subventions, les chaînes d'approvisionnement chinoises doivent pouvoir se passer des composants occidentaux. La ville de Guangzhou, dans le sud du pays, a affecté cette année plus de 21 milliards de dollars à des projets relatifs aux semi-conducteurs et à d'autres projets technologiques, notamment ceux qui visent à supplanter les fournisseurs occidentaux d'équipements pour les puces. Selon des rapports d'entreprises et des communiqués de presse, les commandes de matériel fabriqué en Chine ont augmenté au cours des derniers mois.

M. Xi n'a pas mâché ses mots concernant ce qu'il considère comme une tentative des pays occidentaux d'imposer un " endiguement complet " de la Chine. Lors d'une importante séance législative en mars, le président chinois a interrompu les remarques d'un représentant de fabricant chinois de grues. L'échange a été largement rapporté par les médias d'État : " Les puces électroniques utilisées dans vos grues sont-elles fabriquées localement ? " a demandé M. Xi. Oui, a répondu le représentant.

Selon les estimations de Yole Group, un cabinet d'études de marché, jusqu'à présent, moins de 1 % de tous les semi-conducteurs en Chine sont des produits haut de gamme de l'industrie soumis aux contrôles américains. Le reste est constitué de semi-conducteurs moins avancés, ou " matures ", que l'on trouve dans les biens de consommation électroniques grand public et les voitures, et qui représentent " la majeure partie de l'activité ", a déclaré Jean-Christophe Eloy, directeur général de Yole Group. Ces puces, qui n'ont pas été affectées par les mesures de contrôle prises par l'administration Biden en octobre, bénéficient aujourd'hui d'un regain d'investissement, a-t-il ajouté.

Les deux plus grands fabricants chinois de puces, la Semiconductor Manufacturing International Corporation (SMIC), soutenue par l'État, et Hua Hong Semiconductor, ont chacun annoncé que des milliards de dollars seraient consacrés cette année à l'expansion de la production de puces matures, à en croire les communiqués.

Pourtant, à long terme, le manque d'accès de la Chine aux outils de classe mondiale nécessaires à la fabrication des puces pourrait freiner ses progrès dans de nombreuses industries de pointe telles que l'intelligence artificielle et l'aérospatiale, selon Handel Jones, directeur général de International Business Strategies, une société de conseil.

Selon les estimations de Yole Group, en août dernier, YMTC avait pour objectif de tripler sa part de la production mondiale de puces pour atteindre 13 % d'ici 2027, défiant ainsi les fabricants historiques de puces comme l'américain Micron Technology. Confronté à des difficultés pour construire sa deuxième usine, le fabricant chinois de puces mémoire devrait voir sa production décliner pour ne plus représenter que 3 % du marché en 2027.

Les entreprises internationales qui investissaient auparavant dans l'industrie chinoise des semi-conducteurs sont aujourd'hui en train de réorienter leurs investissements ailleurs. Les principaux fabricants de puces de Corée et de Taïwan, Samsung et Taiwan Semiconductor Manufacturing Company (TSMC), investissent des milliards de dollars dans une nouvelle production aux États-Unis. Le fabricant de puces taïwanais sollicite des subventions américaines pour son usine d'Arizona, ce qui va l'obliger à freiner ses investissements en Chine pendant une décennie.

Dans le même temps, selon les experts, le recul de l'influence étrangère sur le secteur chinois des puces crée des opportunités pour les entreprises nationales. Le mois dernier, un fabricant d'équipements de semi-conducteurs a fait son entrée à la bourse de Shanghai. Les actions de cette société, Crystal Growth & Energy Equipment, ont grimpé de 30 % depuis lors.

" C'est en raison des sanctions qu'il y a maintenant des opportunités sur le marché ", a déclaré Xiang Ligang, directeur d'un consortium technologique situé à Pékin, qui conseille le gouvernement chinois en matière de questions technologiques. " Désormais, il nous est possible de nous développer. "

Le récent afflux d'argent public pourrait accroître la part de la Chine dans la production mondiale de puces d'entrée de gamme. Selon un rapport rédigé conjointement par Rhodium Group, une société de conseil, et Stiftung Neue Verantwortung, un groupe de réflexion de Berlin, la Chine pourrait, au cours de la prochaine décennie, prendre en charge près de la moitié de la capacité de production mondiale de la catégorie de semi-conducteurs à technologie mature.

Cela pourrait créer de nouvelles vulnérabilités au niveau de la chaîne d'approvisionnement des entreprises étrangères, a déclaré Jan-Peter Kleinhans, coauteur du rapport.

" Mettre tous ses œufs dans le même panier est une idée stupide, a-t-il expliqué. Ce serait là un point d'étranglement qui pourrait être exploité. "

Ana Swanson a contribué à ce reportage.

Source : The New York Times, Chang Che, John Liu, 11-05-2023

Traduit par les lecteurs du site Les-Crises

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Désaméricanisation : Comment la Chine restructure son secteur des puces électroniques

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Sept mois après que Washington ait dévoilé de sévères mesures [dans le contexte de sa guerre commerciale contre la Chine, NdT], les entreprises chinoises redoublent d'efforts pour mettre en place d...

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Scientific and Technological Flows Between the United States and China

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Scientific and Technological Flows Between the United States and China

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Scientific and technological competition has emerged as a front on which strategic competition between the United States and China is contested. Scientific and technological dominance — the prize of this competition — has been recognized as a national priority by high-level leadership from both countries. This dominance can be attained in two primary ways: A country can rely on its domestic scientific and technology innovation resources and activities, or it can leverage foreign scientific and technological assets. The researchers focused on the second approach for this study; in this report, they describe the benefits and liabilities associated with U.S.-Chinese scientific research collaboration. Specifically, the researchers investigated three types of flows between the United States and China: the inflow of U.S. technology inputs into Chinese military technology, the bilateral movement of scientific researchers between the United States and China, and scientific collaboration between researchers based in the United States and those based in China.

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Scientific and Technological Flows Between the United States and China

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The objective of this report is to quantify and describe three types of scientific and technological flows between the United States and China to help assess the net effect of these types of flows on U.S. national security.

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China Is Doubling Down on its Digital Currency - Foreign Policy Research Institute

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China Is Doubling Down on its Digital Currency - Foreign Policy Research Institute

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China’s central bank continues to take aggressive steps toward assimilating the digital yuan within its domestic financial system. Despite these efforts, less than a fifth of the Chinese population have utilized it.

While China continues to be a pioneer in digital currency development, the United States is yet to even pilot a digital dollar.

China, the world’s largest bilateral creditor and leading trading partner, could use the digital yuan to elevate the status of the renminbi and challenge the dominance of the US dollar.

The United States is at risk of losing economic leverage and international financial power if Beijing continues to dictate the norms and regulations of digital currencies.

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Bottom Line

China's central bank continues to take aggressive steps toward assimilating the digital yuan within its domestic financial system. Despite these efforts, less than a fifth of the Chinese population have utilized it.

While China continues to be a pioneer in digital currency development, the United States is yet to even pilot a digital dollar.

China, the world's largest bilateral creditor and leading trading partner, could use the digital yuan to elevate the status of the renminbi and challenge the dominance of the US dollar.

The United States is at risk of losing economic leverage and international financial power if Beijing continues to dictate the norms and regulations of digital currencies.

Since 2014, the People's Republic of China has been developing a digital currency called the digital yuan-also known as e-yuan, e-CNY, digital renminbi, or digital RMB. This new technology provides an array of options for overseeing China's colossal and fragile financial system, as well as opportunities for economic influence abroad. Ultimately, the Chinese Communist Party seeks to make the digital yuan the go-to payment means for its 1.4 billion population, as well as advance China's technological prowess on the international stage.

The United States has enjoyed global economic influence in part thanks to the US dollar being the dominant currency for trade, foreign exchange reserves, and cross-border transactions. However, China's digital yuan has the potential to weaken the ability of the United States to retain trading partners, enforce sanctions, and monitor financial flows. Moreover, the digital yuan raises cybersecurity concerns related to data protection, espionage, and financial stability. With each year that China pilots its digital currency and the United States does not, Beijing becomes better positioned to dictate the norms and regulations of this new technology and Washington becomes a weaker competitor.

What Is the Digital Yuan?

China's digital yuan is a central bank digital currency (CBDC) issued by the People's Bank of China (PBOC) and valued the same as the standard renminbi (RMB). It is a legal tender since it is a digitized version of physical RMB. As FPRI Fellow Bob Murray has explained, CBDC transactions are "faster, cheaper, and theoretically more secure" than conventional methods such as e-payments or e-banking.

CBDCs function the same as withdrawing cash from an ATM. Transactions are completed instantaneously and at lower costs because intermediaries, namely banks, are not required to participate in the exchange. However, transactions are more secure than cash thanks to a "variety of technologies, including a digital certificate system, digital signature, and encrypted storage which make double-spending, illegal duplication and counterfeit, transaction falsification, and repudiation unfeasible," according to a PBOC White Paper. Today, the digital yuan is still in the pilot phases primarily in large coastal cities, but is progressing towards an official launch across all of mainland China.

CBDCs such as the digital yuan are not the same as cryptocurrencies. In fact, cryptocurrency exchange operations were banned in China in 2017 and transactions were banned in 2021, largely because they are difficult to regulate. Cryptocurrencies like Bitcoin operate on blockchain technology which, in basic terms, is a decentralized, immutable ledger designed to circumvent established financial institutions. Alternatively, CBDCs are fiat currencies and therefore subject to government control. The value of the digital yuan is predictable since it is pegged to the same currency basket as the RMB, whereas the value of cryptocurrencies is determined by relatively volatile supply and demand. For a centralized state like China, a CBDC is far more attractive than a cryptocurrency.

Cryptocurrency transactions can be entirely anonymous, making it ideal for illegally moving money. Alternatively, the digital yuan is formulated to minimize financial crime and identify troublemakers. However, this raises questions about surveillance and privacy. According to a PBOC press release, the digital yuan provides "anonymity for small amounts, legal traceability for large amounts," and the central bank guarantees the "reasonable personal information protection needs of the public." Users' data will not be shared with government officials "unless stipulated otherwise in laws and regulations," according to a PBOC White Paper. Article 28 of the Cybersecurity Law already allows the government to acquire data from any Chinese entity in the name of "national security," so in reality, anonymity is actually conditional and ambiguous.

China was the first major economy to test a CBDC when it began pilots in April 2020. The government rolled out the currency in just four cities: Shenzhen, Suzhou, Xiongan, and Chengdu. Last fall, the PBOC vice president announced that the digital yuan trial program will expand, bringing the total number of pilot areas to fifteen provinces and twenty-three cities. The addition of Chongqing and Guangzhou, two megacities, means that China's top five largest cities are now offering the digital yuan as a payment option to a combined population of 98 million people. Moreover, six cities in Zhejiang were added because the province is hosting the 2023 Asian Games and the PBOC wants to test the digital yuan with foreigners attending the festivities.

Increasing Domestic Consumption

In January 2022, the PBOC published a report stating that 261 million people had set up a digital yuan wallet. On one hand, this figure is equal to the combined populations of Russia, Germany, and Canada, so this is a solid achievement for only two years of pilots. On the other hand, approximately 903.6 million people utilize mobile payments in China, so a 28.89 percent uptake rate is less than impressive. Plus, having a wallet does not mean there is any money inside, so it is unclear how many of those 261 million people are actually putting it to good use.

Many digital yuan wallet-holders probably created them in hopes of winning free cash. Over the course of 2022, eleven pilot cities, including Beijing and Shanghai, launched digital yuan lotteries giving away a total of ¥340 million RMB ($50.47 million). In the summer of 2022, Meituan, a major online shopping platform, launched a ¥30 million RMB lottery, and then Fuzhou's official app organized another lottery worth ¥20 million RMB. To welcome the Lunar New Year- a notoriously high-spending holiday in China-the digital yuan app offered a multitude of discounts and promotions as well as red envelopes containing digital yuan for gifting to friends and family.

Giveaways are enough to persuade consumers to start using digital yuan, but not enough to guarantee sustained use. To ensure the adoption of new technology, it has to seamlessly integrate into established norms. The vast majority of Chinese people purchase everyday goods with their smartphones, so the digital yuan app went live in fifteen pilot cities in January 2022. The central bank's next move was to partner with popular commerce platforms in order to reach those pre-existing shoppers. Tenpay (WeChat) and Alipay (Ant Group) facilitate about 93 percent of mobile payments in China so in order to compete, the digital yuan will need to be just as, if not more, ubiquitous.

Last summer, the Chinese government was still enforcing strict COVID-19 restrictions, so many households were still reliant on food delivery and the economy was struggling. In response, Meituan, the most popular delivery service in China, and Shenzhen, the sixth-largest city in China, rolled out a digital yuan lottery in which 67,000 merchants and 2.6 million customers participated. Coinciding with the lottery, Meituan also collaborated with five banks to issue digital yuan coupons worth ¥35.2 million RMB ($5.27 million). This was an explicit effort to popularize the digital yuan as well as boost consumption during an economic downturn.

Partnering with online shopping platforms is not a new strategy. In July 2022, JD.com, China's largest online retailer, announced that it had processed more than 4 million transactions worth ¥900 million RMB ($133.5 million) since it began accepting digital yuan as tender in 2020. Ant Group incorporated the digital yuan into its platform starting in May 2021 and WeChat recently followed suit in March 2023. This is critical because prior to these developments, Ant Group only accepted Alipay and JD.com exclusively took Tenpay. The digital yuan can undermine the duopoly with interoperability, because it can be spent anywhere and merchants avoid transaction fees, according to FPRI Fellow Bob Murray.

China's central bank has delegated many digital yuan rollout responsibilities to China's state-owned banks, the backbone of China's financial system. For instance, last year, the Industrial and Commercial Bank of China added a "smart exchange function" to its mobile banking app so that customers can automatically convert digital CNY wallet balances into bank deposits. More than forty employers in Hainan province used Bank of China's (BOC) digital yuan service to pay wages. China Construction Bank began accepting digital yuan to purchase wealth management products. Agricultural Commerce Bank announced that it had issued the first-ever digital yuan loan worth ¥500,000 RMB ($73,986). These banks hold leverage over millions of individuals and thousands of companies both inside and outside of China, so they offer a clear path to widespread adoption of the digital yuan.

Local governments are integrating the digital yuan into everyday public programs. For example, starting in April 2022, residents of Zhejiang province could spend digital yuan to pay for taxes, stamps, and social security. The digital yuan was also accepted as payment for public bus rides for ten routes in Guangzhou and for public subway rides at 125 stations in Ningbo. In April 2023, all government employees in Changshu city will receive salaries in the form of digital yuan. If the goal is to make the digital yuan the go-to payment method across China, incorporating it into daily transportation and regular paychecks is the obvious strategy to follow.

In December 2022, a former PBOC research director surprised observers by publicly stating that "the results are not ideal ... usage has been low, highly inactive." This could be because consumers are simply not convinced that their entrenched payment methods are inadequate and they should go through the trouble of adopting a new one. Furthermore, China is still recovering from the pandemic, intrusive public health policies, and an uptick in government surveillance. Although the PBOC states that the digital yuan will respect individual privacy, it is as traceable as they design it to be. Therefore, it is not unreasonable for a Chinese citizen to assume that the digital yuan is just another lever for control and repression. On the other hand, the Chinese government devotes plenty of resources to developing this new technology and is unlikely to jeopardize success during the pilot stages by breaking promises.

The Digital Yuan Outside of China

The target market for the digital yuan is domestic, but the PBOC is exploring foreign use as well. Foreign athletes and tourists accessed it for the first time during the Beijing Winter Olympics in February 2022. A PBOC official told reporters that 2 million digital yuan ($315,761) was being spent every day at the Olympics, which is probably less than originally envisioned since attendance was limited due to COVID-19. Foreigners can test the digital yuan again later this year when they attend the 2023 Asian Games in Zhejiang province.

In September 2022, Hong Kong was added to the list of digital yuan pilot regions in order to experiment with cross-border payments; an ideal venue since the city is a separate legal entity but still firmly controlled by Beijing. If successful, this could contribute to the broader goal of strengthening the renminbi in the global financial system. In 2020, the RMB was the fifth largest asset in official foreign exchange reserves, and by the end of 2022 it was the third largest, according to data from the International Monetary Fund. The US dollar is still the most popular currency in reserves by far. This can be a problem for any actors looking to move money on financial infrastructure that is intertwined with the United States and Western-imposed sanctions.

In addition to piloting the digital yuan, the Hong Kong Monetary Authority is also engaged in the multiple central bank digital currency bridge project, also called mBridge or mCBDC bridge project. Under this scheme, China, Hong Kong, Thailand, United Arab Emirates, and the Bank of International Settlements are aiming to establish a multilateral system that can accommodate different digital currencies and legal regulations. FPRI Fellow Bob Murray depicts the current US-led financial system as analogous to mailing a paper check whereas mBridge, with its instantaneous transfers across any time zone, is analogous to Venmo. The first-ever mBridge pilot started in September 2022. According to a Hong Kong Monetary Authority press release, the banks completed 160 payment and foreign exchange transactions totaling more than HK$171 million, the largest cross-border CBDC pilot to date. If pilots demonstrate viability, mBridge could be a potential workaround to SWIFT and sanctions.

There are further opportunities for internationalizing the renminbi via the Belt and Road Initiative (BRI), an overseas development program intended to foster connectivity across the Global South. In very general terms, a typical BRI project involves a foreign borrower signing a loan agreement with a Chinese bank in order to finance an implementation contract with a Chinese state-owned enterprise. The Chinese side could take advantage of these agreements by mandating digital yuan payment for all of those debtors, borrowers, and contractors. In exchange for a new power plant or road network, borrowers could be forced to adopt the digital yuan. However, the requirement may be unnecessary. Many countries in the Global South lack the financial infrastructure to accommodate the dollar system, so transfers are costly and delayed. If China were to promote the digital yuan under the Digital Silk Road-a complement to the BRI which exports Chinese technologies to countries looking to leapfrog-recipients may jump on the opportunity to voluntarily decrease reliance on the dollar and replace it with the digital yuan.

That being said, PBOC President Yi Gang explicitly stated in October 2021 that there are "no plans to promote the digital yuan in countries along the Belt and Road," so these are merely options on the table that the PBOC is apparently choosing not to pursue at this time.

Future of the Digital Yuan

Today, the PBOC is one of twelve central banks piloting a CBDC and is a leader in terms of applications and scope. In fact, by the end of August 2022, the value of all digital yuan transactions had reached ¥100.04 billion RMB ($15.06 billion). This still seems to be below the Chinese Communist Party's expectations because senior officials set new key performance indicators for Suzhou city officials to accomplish by the end of 2023, including the facilitation of ¥2 trillion RMB ($300 billion) digital yuan transactions in Suzhou alone-which is twenty times greater than the total value of digital yuan transactions across China just six months prior. Clearly, the Chinese government is committed to elevating the digital yuan to the currency of first resort. Just this year, the PBOC counted digital yuan in the official measure of cash in circulation for the first time.

On the other hand, the United States has no plans to develop a CBDC and faces plenty of opposition. Federal Reserve Governor Michelle Bowman recently delivered a speech at Georgetown University hesitating to commit to a CBDC rollout. Republicans have taken legislative action citing surveillance concerns and government overreach. Sen. Ted Cruz has introduced two bills banning CBDCs, and Gov. Ron DeSantis just signed a bill in May 2023 banning some uses of CBDC payments in Florida.

Despite public backlash, there are still some research initiatives exploring the possibilities for a digital dollar. The Federal Reserve and the Massachusetts Institute of Technology's Digital Currency Initiative collaborated under Project Hamilton to test the feasibility of a digital dollar platform. In March 2022, President Joe Biden signed an executive order which articulated an "urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest" in an effort to "[ensure] U.S. leadership internationally to promote CBDC development that is consistent with U.S. priorities and democratic values."

In other words, the US government is aware that other actors are dictating the development of cutting-edge technology, but is still uncommitted to piloting or authorizing a CBDC. China is doubling down on its digital yuan for the foreseeable future and could be a decisive voice in CBDC standards around the world.
The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.
Image: Adobe Stock

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China Is Doubling Down on its Digital Currency - Foreign Policy Research Institute

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Since 2014, the People's Republic of China has been developing a digital currency called the digital yuan-also known as e-yuan, e-CNY, digital renminbi, or

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The US Is Openly Stockpiling Dirt on All Its Citizens

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The US Is Openly Stockpiling Dirt on All Its Citizens

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A newly declassified report from the Office of the Director of National Intelligence reveals that the federal government is buying troves of data about Americans.

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Wyden had pressed Haines, previously the number two at the Central Intelligence Agency, to release the panel's report during a March 8 hearing. Haines replied at the time that she believed it "absolutely" should be read by the public. On Friday, the report was declassified and released by the ODNI, which has been embroiled in a legal fight with the digital rights nonprofit the Electronic Privacy Information Center (EPIC) over a host of related documents.

"This report makes it clear that the government continues to think it can buy its way out of constitutional protections using taxpayers' own money," says Chris Baumohl, a law fellow at EPIC. "Congress must tackle the government's data broker pipeline this year, before it considers any reauthorization of Section 702 of the Foreign Intelligence Surveillance Act," he said (referring to the ongoing political fight over the so-called " crown jewel " of US surveillance).

The ODNI's own panel of advisers makes clear that the government's static interpretations of what constitutes "publicly available information" poses a significant threat to the public. The advisers decry existing policies that automatically conflate being able to buy information with it being considered "public." The information being commercially sold about Americans today is "more revealing, available on more people (in bulk), less possible to avoid, and less well understood" than that which is traditionally thought of as being "publicly available."

Perhaps most controversially, the report states that the government believes it can "persistently" track the phones of "millions of Americans" without a warrant, so long as it pays for the information. Were the government to simply demand access to a device's location instead, it would be considered a Fourth Amendment "search" and would require a judge's sign-off. But because companies are willing to sell the information-not only to the US government but to other companies as well-the government considers it "publicly available" and therefore asserts that it "can purchase it."

It is no secret, the report adds, that it is often trivial "to deanonymize and identify individuals" from data that was packaged as ethically fine for commercial use because it had been "anonymized" first. Such data may be useful, it says, to "identify every person who attended a protest or rally based on their smartphone location or ad-tracking records." Such civil liberties concerns are prime examples of how "large quantities of nominally 'public' information can result in sensitive aggregations." What's more, information collected for one purpose "may be reused for other purposes," which may "raise risks beyond those originally calculated," an effect called "mission creep."

Most Americans have at least some idea of how a law enforcement investigation unfolds (if only from watching years of police procedurals). This idea imagines a cop whose ability to surveil them, turn their phone into a tracking device, or start squeezing records out of businesses they frequent, are all gated behind evidentiary thresholds, like reasonable doubt and probable cause.

These are legal hurdles that no longer bother an increasing number of government agencies.

Access to the most sensitive information about a person was once usually obtained in the course of a "targeted" and "predicated" investigation, the report says. Not anymore. "Today, in a way that far fewer Americans seem to understand, and even fewer of them can avoid, [commercially available information] includes information on nearly everyone," it says. Both the "volume and sensitivity" of information the government can purchase has exploded in recent years due to "location-tracking and other features of smartphones," and the "advertising-based monetization model" that underlies much of the internet, the report says.

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The US Is Openly Stockpiling Dirt on All Its Citizens

# data[].attributes.attachment_link.description
A newly declassified report from the Office of the Director of National Intelligence reveals that the federal government is buying troves of data about Americans.

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TikTok ban on federal devices formalized with update to Federal Acquisition Regulation

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TikTok ban on federal devices formalized with update to Federal Acquisition Regulation

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Three major federal agencies on Friday issued an interim rule to implement a controversial ban on the use of TikTok on the devices of government employees and contractors.

The Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) issued the interim rule for implementation of the No TikTok on Government Devices Act applicable to any contract solicitations the agencies issue on or after June 2.

“The rule revises the Federal Acquisition Regulation (FAR) to implement the prohibition on having or using the social networking service TikTok or any successor application or service developed or provided by ByteDance Limited or an entity owned by ByteDance Limited (“covered application”),” the rule titled ‘Federal Acquisition Regulation: Prohibition on a ByteDance Covered Application’ says in the Federal Register.

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Three major federal agencies on Friday issued an interim rule to implement a controversial ban on the use of TikTok on the devices of government employees and contractors.

The Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) issued the interim rule for implementation of the No TikTok on Government Devices Act applicable to any contract solicitations the agencies issue on or after June 2.

"The rule revises the Federal Acquisition Regulation (FAR) to implement the prohibition on having or using the social networking service TikTok or any successor application or service developed or provided by ByteDance Limited or an entity owned by ByteDance Limited ("covered application")," the rule titled 'Federal Acquisition Regulation: Prohibition on a ByteDance Covered Application' says in the Federal Register.

All contract solicitations issued before June 2 but awarded after that date must amend their solicitation to comply with the interim rule by July 3, 2023.

Under government contract law, an interim rule impacts acquisition from the date it is listed in the Federal Register, and has the force of a Federal Acquisition Regulation requirement. The FAR is the set of rules that governs U.S. government procurement.

The TikTok prohibition applies to the presence or use of any covered application on any information technology owned or managed by the Government, or on any IT used or provided by a contractor including equipment provided by the contractor's employees, unless an exception is granted in accordance with Office of Management and Budget (OMB) Memorandum M-23-13.

The OMB in February published a memo that gave all federal agencies 30 days to ensure Chinese-owned video app TikTok is no longer present on government devices.

The memo requires government IT leaders within 30 days to "identify the use or presence of a covered application on information technology" and to establish an internal process to adjudicate limited exceptions.

IT departments can enforce such measures by remotely removing the TikTok application across selected devices, which can also require the use of "allowlists" or "blocklists" when targeting a specific piece of software.

Nevertheless, three senior officials told FedScoop earlier this year that the OMB policy document poses significant technical and definitional questions and challenges for agencies working to implement the new guidance.

Some critics of the TikTok ban, both inside and outside of the government say it is unconstitutional because it violates the First Amendment. Others say that all social media platforms, including those headquartered in America, take a dragnet approach to collecting users' data.

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TikTok ban on federal devices formalized with update to Federal Acquisition Regulation

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The new rule follows a White House memo in February that gave government IT leaders 30 days to identify the presence of the app on agency devices.

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AI, China ‘Defining Challenges of Our Time’: CISA Director

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AI, China ‘Defining Challenges of Our Time’: CISA Director

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The head of the Cybersecurity and Infrastructure Security Agency warned on Wednesday about the security risks posed by generative artificial intelligence technologies and an increasingly bellicose China, calling them “the two epoch-defining challenges of our time.”
During an event hosted by Axios, CISA Director Jen Easterly outlined her concerns about Beijing’s aggressive cyber posture and the rise of largely unregulated generative AI tools and called for tech firms and critical infrastructure operators to prioritize enhanced security practices.
Easterly cited, in part, the intelligence community’s 2023 annual threat assessment — which was publicly released in March — and noted that it outlined how “in the event of a conflict, like an invasion or a blockade of the Taiwan Strait, we will almost probably see aggressive cyber operations here in the U.S.” She said that these cyberattacks would likely be designed “to delay military deployment and to induce societal panic” and would rely on digital intrusions “capable of disrupting transportation, oil and pipelines.”

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AI, China ‘Defining Challenges of Our Time’: CISA Director

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Jen Easterly outlined her concerns about Beijing’s aggressive cyber posture and the rise of largely unregulated generative-AI tools.

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NATO and strategic competition in cyberspace

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NATO and strategic competition in cyberspace

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NATO’s 2022 Strategic Concept reaffirmed its commitment to NATO’s founding principles and to its core mission of collective defence and security in a Euro-Atlantic zone definitively ‘not at peace’.
It also reiterated its long-held view that cyberspace, the global domain of interconnected information technologies and data, is ‘contested at all times’ by a range of state and non-state actors. Set against the backdrop of widespread competition in cyberspace between military and intelligence agencies, firms, criminals, hackers, hacktivists and assorted adventurers, this assertion is hard to deny.

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NATO's 2022 Strategic Concept reaffirmed its commitment to NATO's founding principles and to its core mission of collective defence and security in a Euro-Atlantic zone definitively 'not at peace'.

It also reiterated its long-held view that cyberspace, the global domain of interconnected information technologies and data, is 'contested at all times' by a range of state and non-state actors. Set against the backdrop of widespread competition in cyberspace between military and intelligence agencies, firms, criminals, hackers, hacktivists and assorted adventurers, this assertion is hard to deny.

Russia's ongoing war on Ukraine has demonstrated the stakes of strategic competition in cyberspace, as Russia seeks to degrade and disrupt Ukraine's military, government and civilian networks and all that depend upon them.
Picture courtesy of the Foreign Policy Research Institute

Awareness of this situation is heightened by the cyber campaign integral to Russia's ongoing war on Ukraine. This war has demonstrated the stakes of strategic competition in cyberspace, as Russia seeks to degrade and disrupt Ukraine's military, government and civilian networks and all that depend upon them. That Russia has so far failed to achieve strategic effect in Ukraine through cyber means should not distract from the potential to do so, nor from the friction introduced into the Ukrainian war effort and wider society by Russian military-intelligence cyber operations. Russian attempts to derail Ukraine's military defence and to disrupt civilian life have demonstrated the limited utility of cyber operations to strategic coercion, but we should remain mindful of the resources and resolve necessary to rebuff Russian cyber operations over long periods of time. The possibilities for miscalculation and horizontal escalation also remain pertinent to our long-term assessment of Russian offensive cyber operations in Ukraine.

NATO has been vocal in its political support for Ukraine, and for the provision of bilateral military assistance by individual Allies. However, NATO is not a direct party to the war, and Ukraine is not a member-state. NATO will need to think beyond the war in Ukraine as it determines its future role in strategic cyber competition. We suggest that beyond deterrence and warfighting, an alternative lens through which to view NATO's possible contribution is stability, a founding tenet of Alliance purpose since 1949.

What does NATO need to do to enhance Alliance stability on cyber issues, ensure the international system is not destabilised further by hostile cyber operations, and guard against the internet itself becoming destabilised by the misuse of technologies? These are big tasks and will define the success or otherwise of NATO as a cybersecurity actor. Our view is that if NATO does want to compete in cybersecurity, it should compete to be at the forefront of providing cyber stability.

NATO's internal stability as an alliance has, despite occasional low points, been remarkably consistent since its inception. This is partly due to committed American leadership but also to the desirability of membership: NATO's security guarantee is worth paying for and maintaining over extended periods, for both small and large Allies. Arguably, despite ongoing calls for European strategic autonomy and the ruptures in transatlantic security politics during the Trump administration, NATO's internal stability is greater now than in many years, not least as a result of solidarity engendered by Russia's war on Ukraine.

In terms of cyber defence, a myriad of NATO capacity-building initiatives has served to bolster Alliance stability, including training and education programmes, exercises and war games, and joint doctrine and strategy allied to clearly articulated visions like the Cyber Defence Pledge. Whilst internal stability can never be taken for granted, and while there are ongoing adversarial efforts to cause intra-Alliance divisions between NATO member states through digital subversion and disinformation, our broader concern here is with NATO's role in fostering cyber stability in two other areas: the international system, and cyberspace itself.

As the world's premier military alliance, what NATO says and does influences international stability, even if the interpretations of those actions often differ markedly. NATO's designation of cyberspace as an operational domain, for instance, fed Russian and Chinese narratives of Western 'militarisation' of cyberspace. Some may also look askance at NATO's Cyber Operations Centre (CyOC) and the integration of offensive cyber capabilities into mission planning and operations through the Sovereign Cyber Effects Provided Voluntarily by Allies (SCEPVA) framework. In peacetime, however, NATO does not undertake cyber operations outside of the defensive space, and it is individual Allies whose activities affect strategic cyber competition. The US, through its persistent engagement doctrine, for example, stresses the need to take the fight to the enemy in 'out of area operations' in contested digital space, a view broadly shared by the UK. The aim is to shape adversarial behaviour and the norms of 'agreed competition' in cyberspace, rather than wait for diplomats to agree on global terms of state behaviour that are likely to be ignored anyway.

A myriad of NATO capacity-building initiatives in cyber defence has served to bolster Alliance stability, including training and education programmes, exercises and war games, and joint doctrine and strategy allied to clearly articulated visions like the Cyber Defence Pledge. Picture: NATO Cyber Coalition Exercise © NATO

This presents a challenge for NATO. It has treaty-based obligations to peace and stability, yet the actions of individual major Allies may undermine international cyber stability. If they do, how does NATO position itself with respect to influential Allies and with its legal and normative stance in other domains? How might it counter the inevitable accusations that NATO is itself contributing to net international cyber instability? If, however, the US and its close partners are correct and they achieve a reduction in hostile cyber activities, how might NATO adjust its doctrine and peacetime activities to support a more interventionist and proactive posture in cyberspace in pursuit of international stability? Returning to internal stability for a moment, how will it square away emerging disagreements between allies as to the proper balance of defence and offence in cyberspace? Resolution of these issues will require deft and responsive political management.

With respect to cyberspace stability, NATO has traditionally had little reach into the technical, policy and civil society communities of the global multi-stakeholder community that maintains cyberspace as, effectively, a common good. The standards, protocols, norms, laws and regulations of cyberspace are, whilst sometimes fragmented, the product of cooperative frameworks within which military alliances usually have little influence. NATO's own cybersecurity ambitions, though, require that it engage directly with national cyber authorities, industry and other supranational organisations like the European Union.

Its commitment to the cyber resilience of Allies, for example, means that its overlapping membership with the EU brings it into close contact with European cyber resilience agendas and initiatives. NATO's 2022 Strategic Concept recognises explicitly the need for closer EU-NATO partnership in defence and security, as does the EU Cybersecurity Strategy (2020). Arrangements exist to share cyber threat intelligence and best practices, as well as cooperation on training and research, but more joint work is required. NATO can help not only with the development and implementation of cyber defence and cyber resilience measures that improve the stability of cyberspace overall, but also by bolstering the normative aspects of these forms of regulation and governance. That is, by demonstrating the importance of shared values and approaches in improving cyber stability beyond the narrow, military concerns of NATO alone.

NATO has also committed to improved engagement with industry and academia through the NATO Industry Cyber Partnership (NICP). This is primarily an information exchange mechanism, sharing non-classified cyber threat intelligence between the Alliance and firms in NATO countries. The NATO 2030 Reflection Group recommended that NATO look beyond its 'classical' partners in the defence industry to leverage the skills and expertise of the wider private sector, academia and non-governmental organisations. In other words, these types of partnerships should not be restricted to client-vendor relations but find new sources of creativity and relevant experience. How this translates into cyberspace stability remains uncertain, but there are openings for increased cyber threat intelligence sharing, cyber resilience, technical assistance, policy development, and other forms of productive engagement that will improve domain stability.

These comments about the stability of the international system and cyberspace in no way exhaust their possible dimensions and futures. They also interact in various important ways, as they do with the internal stability of the Alliance itself. Internal stability is the foundation upon which effective activity within an alliance is built: without internal agreement on key cyber issues, NATO will be slow to develop meaningful courses of action that affect international and cyberspace stability in a beneficial way. Disagreement may even engender negative effects, which will undermine NATO coherence and its stability mission. Even more importantly, what NATO's strategic adversaries do creates constraints and opportunities for the Organization's policy and action. In terms of strategic cyberspace competition, Russia and China in particular pose distinct political and technological challenges that NATO will have to work hard to counter. Russia presents the more immediate threat, as exemplified by its cyber operations in Ukraine and elsewhere, but China is the more persistent long-term competitor and is experimenting and investing in a wide range of deleterious cyber operations on a global scale.

One avenue for NATO to pursue is to strengthen and redefine its international partnerships in this policy field. While there is more talk of the partners in the Indo-Pacific region (Japan, South Korea, Australia and New Zealand) in NATO's Strategic Concept, there are opportunities to further develop these as global partnerships for cybersecurity. It is noteworthy that the UK, France, the US and EU are all deepening their partnerships with these countries (including through such mechanisms as AUKUS, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP). NATO needs its own processes and mechanisms to engage with these partners further on cybersecurity.

NATO Secretary General Jens Stoltenberg engages with students and young leaders on their ideas and vision for NATO, as part of the event "New Ideas for NATO 2030", organized by NATO and Chatham House. © NATO

Just as importantly, deepening and strengthening ties with the tech sector will be fundamental to the global stability of cyberspace. The war in Ukraine has demonstrated the impact of non-state actors in cybersecurity and the importance of civil-military cooperation; from the technical assistance provided by firms like Mandiant to Ukrainian engineers, and the initiatives by Microsoft and others to ensure their platforms remain available and functional in the face of Russian cyber aggression, to efforts by Elon Musk to provide Starlink satellite internet access to Ukraine. Doubling down on engagement with these sectors will be important as NATO continues to fulfil its role to provide peace and stability in the North Atlantic area and beyond.

It is clear too that NATO's cyber defence will be impacted significantly by emerging technologies, such as cloud computing, artificial intelligence and machine learning, the military Internet of Things, and hybrid human-machine systems. Operational flexibility and strategic weight depend on the adoption of these novel technologies, but all have cybersecurity implications, both in terms of their defence and resilience to external interference, and in their possible effects on the stability of cyberspace, the stability of the Alliance, and indeed the international system. NATO is working to integrate these technologies into its planning and operations, including through the creation of the Defence Innovation Accelerator for the North Atlantic (DIANA) and the development of the NATO AI strategy. A focus on the ways such technologies can be used to stabilise or destabilise the Alliance will need to be maintained.

NATO has always been in the stability business. Its opportunity now is to rethink how it can provide stability in a new strategic environment characterised by the simultaneous and convergent challenge of geopolitical aggression and technological revolution. NATO could become a cornerstone of cyber stability, both internally and externally, but it has to remain agile and innovate. NATO's cyber policy and doctrine - whether in the area of deterrence, resilience, or persistent engagement with adversaries - need to keep pace with challengers and with technological change, but also provide a bulwark against inadvertent escalation of cyber conflict and further destabilisation of the global internet.

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NATO Review - NATO and strategic competition in cyberspace

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NATO's 2022 Strategic Concept reaffirmed its commitment to NATO's founding principles and to its core mission of collective defence and security in a Euro-Atlantic zone definitively 'not at peace'.

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Digital Watch newsletter – Issue 80 – June 2023

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Digital Watch newsletter – Issue 80 – June 2023

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AI is the name of the game. In the spirit of the front page illustration of the grand game of addressing AI for the future of humanity, an essential question arises: Who holds the dice? Is it mere coincidence, the divine, or vested interests?

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Digital Watch newsletter – Issue 80 – June 2023 | Digital Watch Observatory

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The June issue of the Digital Watch Monthly is out! Here are the highlights:

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Patientendaten in Gefahr: Cyberschutz im Gesundheitssektor mangelhaft

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Patientendaten in Gefahr: Cyberschutz im Gesundheitssektor mangelhaft

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Fälle wie der Datenklau beim Gesundheits-IT-Dienstleister Bitmarck und beim Klinikverbund Gesundheit Nord haben in den vergangenen Monaten deutlich zugenommen. Eine aktuelle Analyse des Cybersicherheitsanbieters Check Point bestätigt diesen Trend: Der Gesundheitssektor war demnach im ersten Quartal 2023 durchschnittlich 1.684 Angriffen pro Woche ausgesetzt - ein Anstieg von 22 Prozent im Vergleich zum Vorjahr. Die IT-Sicherheitsforscher prognostizieren, dass das Gesundheitswesen im Jahr 2023 die am dritthäufigste angegriffene Branche sein wird, noch vor dem Finanz- und Versicherungssektor und der Kommunikationsbranche.

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Fälle wie der Datenklau beim Gesundheits-IT-Dienstleister Bitmarck und beim Klinikverbund Gesundheit Nord haben in den vergangenen Monaten deutlich zugenommen. Eine aktuelle Analyse des Cybersicherheitsanbieters Check Point bestätigt diesen Trend: Der Gesundheitssektor war demnach im ersten Quartal 2023 durchschnittlich 1.684 Angriffen pro Woche ausgesetzt - ein Anstieg von 22 Prozent im Vergleich zum Vorjahr. Die IT-Sicherheitsforscher prognostizieren, dass das Gesundheitswesen im Jahr 2023 die am dritthäufigste angegriffene Branche sein wird, noch vor dem Finanz- und Versicherungssektor und der Kommunikationsbranche.

"Solche alarmierenden Zahlen erklären sich damit, dass der Gesundheitssektor eine Goldgrube an Daten über Verbraucher bietet, die von Cyber-Kriminellen kaum anderswo gemeinsam abgegriffen werden können", kommentiert Itai Greenberg, CSO bei Check Point Software Technologies, das Ergebnis. Zudem werde ein großer Teil dieser Daten mit veralteten IT-Systemen verwaltet, die Kriminellen leichtes Spiel bieten.

Laut einer Umfrage der Non-Profit-Organisation HIMSS (Healthcare Information and Management Systems Society) verwenden 73 Prozent der Organisationen im Gesundheitswesen alte IT-Systeme, die häufig Sicherheitslücken aufweisen und schwer zu warten sind. Dadurch werde die Branche besonders für Ransomware-Banden attraktiv, die ihre Opfer mit Datendiebstahl erpressen. "Diese Anfälligkeit ist jedoch nicht nur auf Software und Systeme zurückzuführen, sondern auch auf die Art und Weise, wie Daten und Geräte in den einzelnen Organisationen verwaltet werden", ergänzt der Check-Point-CSO.

Check Point zufolge befinden sich in einem durchschnittlichen Krankenhaus mit 500 Betten inzwischen bis zu 10.000 vernetzte IoT-(Internet-of-Things)-Geräte zur Überwachung, Speicherung und Übertragung von sensiblen Daten und Patienteninformationen. Greenberg moniert, dass trotz des erhöhten Sicherheitsrisikos durch die zunehmende Vernetzung und Digitalisierung nicht immer eine adäquate Sicherheitsstrategie umgesetzt werde.

So fehlt es nach Meinung des Check-Point-Experten häufig an präventiven Schutzmaßnahmen: "Genauso wie es besser ist, einen Patienten zu impfen, um ihn vor einer Infektion zu schützen, ist es besser, Cyberangriffe zu erkennen und zu verhindern, bevor sie ein Netzwerk erreichen".

Ein weiteres Problem seien flache oder nicht segmentierte Netzwerke sowie veraltete Sicherheitskontrollen. "Um wirksam zu sein, müssen Sicherheitskontrollen mit dem Innovationstempo Schritt halten", so Greenberg. Diese nachträglich in bestehende Anwendungen zu implementieren, bedeute, dass die Sicherheit immer einen Schritt hinter der Innovation zurückbleibt. "Um diese Lücke zu schließen und kontinuierlich Risiken zu minimieren, sollten Sicherheitskontrollen so früh wie möglich in den Entwicklungsprozess von Anwendungen integriert werden."

Zudem bemängelt der Experte, dass die Endgeräte nicht ausreichend geschützt werden. Er ist davon überzeugt, dass die Implementierung einer Zero-Trust-Architektur unerlässlich ist, um die Sicherheit von Patientendaten und kritischen Infrastrukturen zu gewährleisten. "Daten müssen auch klassifiziert werden", so Greenberg, "um auf die richtige Weise geschützt zu werden. Die Sicherung unstrukturierter Daten wie Text-, Foto-, Video- und Audiodaten oder die Fernchirurgie mit Robotersystemen wie 'Da Vinci' erfordern alle ein unterschiedliches Maß an Schutz und Kontrolle."

Organisationen im Gesundheitswesen könnten sich den Cyberrisiken stellen, indem sie eine kontinuierliche Identitätsüberprüfung implementieren und präventive Sicherheitsmaßnahmen in Echtzeit einführen. Das zugrundeliegende Prinzip sollte, so Greenberg, "Never trust, always verify (Vertraue niemals, überprüfe immer) lauten. "Wenn Gesundheitsorganisationen den kommenden Sturm überleben wollen", da ist sich der Sicherheitsexperte sicher, "müssen sie diese Cyberkultur übernehmen".

Lesetipp: Wie Healthcare-CISOs die Cyberresilienz verbessern können

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Patientendaten in Gefahr: Cyberschutz im Gesundheitssektor mangelhaft

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Cyberangriffe auf Gesundheitseinrichtungen nehmen immer mehr zu. Die Täter haben es dabei vor allem auf Patientendaten abgesehen.

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EU-Kommission verbietet Huawei und ZTE von internen Netzen

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EU-Kommission verbietet Huawei und ZTE von internen Netzen

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EU-Kommissar Thierry Breton kündigte (15. Juni) Massnahmen der Kommission an, um Huawei und ZTE von ihren internen Netzen auszuschliessen. Zudem forderte er die Mitgliedstaaten auf, die Vorrechte der 5G-Toolbox zu nutzen, um Anbieter mit hohem Risiko einzuschränken oder auszuschliessen.
Der zweite Bericht über die Umsetzung der 5G-Sicherheits-Toolbox, auf den sich die Mitgliedstaaten am Donnerstag stellt fest, dass bisher nur 10 der 27 Mitgliedsstaaten die Befugnisse des 5G-Toolkits genutzt haben. Es soll dazu dienen, um Anbietern mit hohem Risiko Verpflichtungen aufzuerlegen oder sie von ihren 5G-Netzen auszuschliessen.

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EU-Kommissar Thierry Breton kündigte am Donnerstag (15. Juni) Maßnahmen der Kommission an, um Huawei und ZTE von ihren internen Netzen auszuschließen. Zudem forderte er die Mitgliedstaaten auf, die Vorrechte der 5G-Toolbox zu nutzen, um Anbieter mit hohem Risiko einzuschränken oder auszuschließen.
Der zweite Bericht über die Umsetzung der 5G-Sicherheits-Toolbox, auf den sich die Mitgliedstaaten am Donnerstag einstimmig geeinigt haben, stellt fest, dass bisher nur 10 der 27 Mitgliedsstaaten die Befugnisse des 5G-Toolkits genutzt haben. Es soll dazu dienen, um Anbietern mit hohem Risiko Verpflichtungen aufzuerlegen oder sie von ihren 5G-Netzen auszuschließen.

„Das ist zu langsam und stellt ein großes Sicherheitsrisiko dar und gefährdet die kollektive Sicherheit der Union, da es eine große Abhängigkeit für die EU und ernsthafte Schwachstellen schafft", erklärte EU-Kommissar Thierry Breton auf der Pressekonferenz.

„Wir fordern, dass unsere Konnektivitätsdienste und -anbieter frei von Huawei und ZTE sind, was für neue und bestehende Verträge gilt. Dies gilt für alle Räumlichkeiten der EU-Kommission, und wir fordern andere EU-Institutionen auf, diesem Beispiel zu folgen", fügte Breton hinzu.

Der Begriff „Hochrisikoanbieter" wird normalerweise verwendet, um Anbieter von Informations- und Kommunikationstechnologie-Ausrüstung (IKT) zu bezeichnen, bei denen die Gefahr besteht, dass sie mit einem feindlichen Staat zusammenarbeiten. Westliche Länder wurden zunehmend misstrauisch gegenüber Huawei und anderen chinesischen Unternehmen, weil Chinas Sicherheitsgesetze die Unternehmen zwingen könnte, Daten an Peking weiterzugeben.

Doch nicht alle EU-Länder haben sich dem angeschlossen. Vor allem Deutschland zögert, Maßnahmen zu ergreifen, die seine Handelsbeziehungen zu China gefährden könnten.

Der Ausschluss der Kommission bedeutet, dass nicht nur die EU-Kommission diese risikoreichen Anbieter nicht mehr nutzen wird, sondern dass auch die Unternehmen, die ihnen Dienstleistungen anbieten, nicht mehr auf chinesische Anbieter zurückgreifen sollten.

Wie sehr die Lieferkette dadurch beeinflusst werde, bleibt abzuwarten. Breton möchte, dass auch andere Institutionen diesem Beispiel folgen, so wie es die Kommission mit dem Verbot von TikTok auf Diensthandys getan hat.

5G-Werkzeugkasten

„Die Sicherheit der 5G-Netze ist von entscheidender Bedeutung. Sie sind kritische Infrastrukturen für sich selbst und für andere Sektoren, die von ihnen abhängen, wie Energie, Verkehr, Gesundheit und Finanzen", erklärte Breton.

Die EU hat im Januar 2020 einstimmig eine Toolbox für die Sicherheit von 5G-Netzen verabschiedet.

Teil der 5G-Toolbox ist es, dass die Mitgliedsstaaten „Hochrisiko-Anbieter" identifizieren und ihnen den Zugang zu Kernelementen der EU-weiten 5G-Netze verbieten oder beschränken können.

Der Grund für diese Einstufung ist, dass einige ausländische Telekommunikationsanbieter „sehr einschneidenden Gesetzen von Drittländern über nationale Geheimdienste und Datensicherheit" unterliegen. Dazu gehören chinesische Anbieter wie Huawei und ZTE.

Die Maßnahmen gegen Huawei waren auch Teil eines breiter angelegten Handelskriegs, der von der Trump-Regierung initiiert wurde und darauf abzielte, Chinas wachsenden Technologiesektor zu lähmen.

Da 5G-Netze ein wesentlicher Bestandteil der technologischen Entwicklung sind, beispielsweise bei der Anwendung des Internets der Dinge, ist die EU auch bestrebt, ihre Abhängigkeit von Drittländern zu verringern, die wirtschaftliche Sicherheit zu gewährleisten und ihre technologische Souveränität zu wahren.

Weitere Sicherheitsanforderungen notwendig

Der zweite Bericht über die Umsetzung der 5G-Sicherheits-Toolbox, der bei der gleichen Gelegenheit veröffentlicht wurde, ist eine Überarbeitung des ersten Fortschrittsberichts vom Juli 2020.

Darin wird festgestellt, dass 24 EU-Länder zwar Gesetzesmaßnahmen in Bezug auf die EU-Toolbox verabschieden oder vorbereiten, kritische Elemente jedoch nicht umgesetzt wurden.

„Diese Situation birgt das eindeutige Risiko einer anhaltenden Abhängigkeit von Hochrisikolieferanten im Binnenmarkt, mit potenziell schwerwiegenden negativen Auswirkungen auf die Sicherheit von Nutzern und Unternehmen in der gesamten EU und EU-kritischen Infrastrukturen", heißt es in dem Bericht, der die Mitgliedstaaten auffordert, unverzüglich zu handeln.

Der Bericht unterstreicht auch die Notwendigkeit der technischen Umsetzung und der besonderen Aufmerksamkeit für die Anwendung grundlegender Sicherheitsanforderungen. Dabei sollen die Sicherheitsstandards durch solide Beschaffungsbedingungen erhöht werden, um ein Mindestmaß an Sicherheitskriterien zu erfüllen.

„Für den Fall, dass die Mitgliedstaaten nicht tätig werden, wird die Kommission weitere Maßnahmen zur Stärkung der Widerstandsfähigkeit des Binnenmarktes prüfen, einschließlich der Erkundung möglicher legislativer Wege in Absprache mit der NIS-Kooperationsgruppe [Gruppe für ‚Zusammenarbeit im Netz und Informationssysteme']", so der Bericht.

Nächste Woche wird die Europäische Kommission eine wirtschaftliche Sicherheitsstrategie vorlegen, die weitere handelspolitische Maßnahmen gegen chinesische Unternehmen beinhalten könnte.
[Bearbeitet von Luca Bertuzzi/Alice Taylor/Kjeld Neubert]

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EU-Kommission verbietet Huawei und ZTE von internen Netzen

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EU-Kommissar Thierry Breton kündigte am Donnerstag (15. Juni) Maßnahmen der Kommission an, um Huawei und ZTE von ihren internen Netzen auszuschließen.

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U.S. Cyber Envoy Warns That European AI Rules Could Stymie Sector

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U.S. Cyber Envoy Warns That European AI Rules Could Stymie Sector

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If more nimble regulation were adopted, ‘little Silicon Valleys’ could sprout across the democracies of Europe, says Nathaniel Fick, whose comments come amid rising tensions with China.

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European proposals on regulating artificial intelligence could stymie technological development at a time when data risks from China and other countries are a threat, the U.S.'s top cyber diplomat warned on Monday.

Draft European Union legislation that would limit the use of AI applications is concerning in part because it was drafted before the current explosion of interest in generative AI, said Nathaniel Fick, ambassador-at-large for cyberspace and digital policy, on a call with reporters. Regulation needs to be nimble given the accelerating pace of technology, he said.

European lawmakers are set to vote on a version of the law on Wednesday, and officials say they hope to finalize the rules by year-end.

Fick also said the proposals could lead to a clustering of AI efforts in the U.S., as opposed to endeavors in several countries.

"I have a concern that the impulses of some European political leaders will create a scenario where all the globe-leading AI companies will also be American as the cloud-computing companies are," he said.

It isn't clear yet which countries will have more leading AI companies, Fick said, noting that greater distribution of AI development in "little Silicon Valleys" across the democratic countries in Europe would have long-term political and economic benefits.

U.S. officials working with companies on voluntary AI guidelines will likely agree on an initial position within the next month, Fick said, and will then seek international support.

Despite divergent regulatory approaches on issues like data privacy, the U.S. and Europe are increasingly collaborating on cybersecurity, spurred by the war in Ukraine and tensions in Taiwan, said Philip Reitinger, chief executive of the Global Cyber Alliance, a nonprofit group that provides free cybersecurity tools for businesses and individuals. Officials are also focusing on joint approaches to emerging technologies to stay ahead of other regions, he said.

"The urgency to increase trans-Atlantic cyber cooperation has increased considerably," Reitinger said.

The U.S. and Europe have stepped up efforts to stop allied countries from using Huawei Technologies' products to build infrastructure for 5G mobile networks. Officials on both sides of the Atlantic say Huawei products come with cybersecurity risks because the company is required to provide data to the Chinese government if requested. Huawei didn't respond to a request for comment.

Last year, American and European officials said they were working on a plan to jointly fund digital infrastructure in developing countries to stop them from otherwise accepting Chinese funding.

The Financial Times reported that EU officials are considering a mandatory ban on Huawei products in 5G networks. EU guidelines from 2020 recommended security safeguards such as using several suppliers, but not an outright ban on Huawei products.

Fick said there will likely be more policies in the U.S. and Europe that reflect a growing awareness of the risks of using products made by Huawei and other Chinese telecommunications firms.

Write to Catherine Stupp at catherine.stupp@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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U.S. Cyber Envoy Warns That European AI Rules Could Stymie Sector

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If more nimble regulation were adopted, 'little Silicon Valleys' could sprout across the democracies of Europe, says Nathaniel Fick, whose comments come amid rising tensions with China.

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Your Data Strategy Needs to Include Everyone

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Your Data Strategy Needs to Include Everyone

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An entirely new “management paradigm” for data is needed. As used here, a “management paradigm” embodies a common language, a holistic vision of the ways data should contribute, a clearly defined organizational structure showing how data integrates across the organization, along with clear roles and responsibilities for all involved. Eventually, it needs to incorporate corporate culture, relationships with universities and vendors, policy, and anything else that advances, or holds back the effective use of data. The new paradigm employs a more pervasive and integrated approach to using data, analytics, and AI in the business.

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A more pervasive and integrated approach to using data, analytics, and AI.

An entirely new "management paradigm" for data is needed. As used here, a "management paradigm" embodies a common language, a holistic vision of the ways data should contribute, a clearly defined organizational structure showing how data integrates across the organization, along with clear roles and responsibilities for all involved. Eventually, it needs to incorporate corporate culture, relationships with universities and vendors, policy, and anything else that advances, or holds back the effective use of data. The new paradigm employs a more pervasive and integrated approach to using data, analytics, and AI in the business.

If the past few decades have confirmed anything, it is the power of data, broadly defined to include activity involving small data, big data, statistics, analytics, and artificial intelligence by employees at every level of sophistication, to help companies improve their performance, in many ways. On one end of the spectrum, artificial intelligence (AI), especially generative AI, promises to transform business and so garners the most excitement. On the other end, basic analyses using small amounts of data are stunningly effective in helping companies make better decisions, control and improve business processes, better understand customers, and enhance products and services. Read the popular press and you might conclude that data, analytics, and AI are taking over the world.

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Thomas H. Davenport is the President's Distinguished Professor of IT and Management at Babson College, a research fellow at the MIT Center for Digital Business, co-founder of the International Institute for Analytics, and a Senior Advisor to Deloitte Analytics. He is author of the new book Big Data at Work and the best-selling Competing on Analytics.

Roger W. Hoerl is the Brate-Peschel Associate Professor of Statistics at Union College in Schenectady, New York, where he has helped launch programs in analytics and statistics. Previously, he led the Applied Statistics Laboratory at GE Global Research.

Diego Kuonen is founder, CEO and CAO of Statoo Consulting, a Switzerland-based consultancy, Professor of Data Science at the Geneva School of Economics and Management (GSEM) at the University of Geneva, Switzerland, and Founding Director of GSEM's Master of Science in Business Analytics program.

Thomas C. Redman, "the Data Doc," is President of Data Quality Solutions. He helps companies and people, including start-ups, multinationals, executives, and leaders at all levels, chart their courses to data-driven futures. He places special emphasis on quality, analytics, and organizational capabilities.

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HBR Learning

Digital Intelligence Course

Accelerate your career with Harvard ManageMentor®. HBR Learning's online leadership training helps you hone your skills with courses like Digital Intelligence . Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.

Excel in a world that's being continually transformed by technology.

# data[].attributes.attachment_link.title
Your Data Strategy Needs to Include Everyone

# data[].attributes.attachment_link.description
An entirely new "management paradigm" for data is needed. As used here, a "management paradigm" embodies a common language, a holistic vision of the ways data should contribute, a clearly defined organizational structure showing how data integrates across the organization, along with clear roles and responsibilities for all involved.

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Digital Threats to Democracy Dialogue summary report

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Digital Threats to Democracy Dialogue summary report

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The Lowy Institute convened the Digital Threats to Democracy (DTD) Dialogue on 12 October 2022. This Dialogue was funded by the New South Wales Department of Premier in Cabinet and was a day-long, closed-door session that brought together a distinguished group of diverse subject matter experts, government officials and civil society stakeholders to examine intersecting digital challenges to democracy. The aim of the Dialogue was to foster connections across subject matter and policy areas in order to spark new ideas and more coordinated approaches to meet these challenges. To foster frank discussion, the session was conducted under Chatham House rules. Therefore the comments and recommendations made during the Dialogue and reflected in this report are not attributed. Additionally, the summary of the Dialogue and recommendations for future consideration should not be taken as endorsed or agreed upon by all Dialogue participants but rather are a reflection of the ideas and topics discussed.

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Executive summary

The Lowy Institute convened the Digital Threats to Democracy (DTD) Dialogue on 12 October 2022. This Dialogue was funded by the New South Wales Department of Premier in Cabinet and was a day-long, closed-door session that brought together a distinguished group of diverse subject matter experts, government officials and civil society stakeholders to examine intersecting digital challenges to democracy. The aim of the Dialogue was to foster connections across subject matter and policy areas in order to spark new ideas and more coordinated approaches to meet these challenges. To foster frank discussion, the session was conducted under Chatham House rules. Therefore the comments and recommendations made during the Dialogue and reflected in this report are not attributed. Additionally, the summary of the Dialogue and recommendations for future consideration should not be taken as endorsed or agreed upon by all Dialogue participants but rather are a reflection of the ideas and topics discussed.

The Dialogue was the cornerstone of a broader 12-month project that seeks to identify and examine the intersecting digital threats to democracy across four key areas: online disinformation, online hate and extremism, tech-enabled foreign interference and regulation of the digital sphere.

The Dialogue was structured according to these key themes and organised and hosted by Research Fellow and Project Director Lydia Khalil from the Transnational Challenges Program at the Lowy Institute. The Dialogue was divided into five concurrent panels that featured presentations by subject matter experts, followed by a moderated discussion between Dialogue participants. The Dialogue also included two keynote speeches delivered by international experts Nina Jankowicz, Vice President at the UK-based Centre for Information Resilience, and Dr Joan Donovan, Research Director of the Shorenstein Center on Media, Politics and Public Policy at Harvard University.

The following Summary Report consolidates and summarises the key points of the presentations, discussions and recommendations for consideration that arose from the DTD Dialogue.

Dialogue program and information

On 12 October 2022, the Lowy Institute convened the Digital Threats to Democracy (DTD) Dialogue. The Dialogue brought together subject matter experts, government officials and civil society stakeholders to examine intersecting digital threats to democracy. The Dialogue was organised and hosted by Research Fellow and Project Director Lydia Khalil from the Transnational Challenges Program at the Lowy Institute. The aim of the Dialogue was to foster connections across subject matter and policy areas to spark new ideas and coordinated approaches to digital challenges to democracy.

The DTD Dialogue was structured around five panels that each featured presentations by subject matter experts, followed by a moderated discussion between Dialogue participants. The following are descriptions of the panel topics and issues considered.

Participants in the Dialogue examined and debated the challenges posed by and within the digital realm to the functioning of democratic procedures, levels of trust in democratic governance and the information environment that impacts the way citizens participate and interact in democratic societies. Two keynote speeches were delivered by international experts Nina Jankowicz, Vice President at the UK-based Centre for Information Resilience, and Dr Joan Donovan, Research Director

Panels and discussions

Panel 1: Tackling online disinformation

Panel presenters and Dialogue participants were asked to engage with how disinformation impacts citizens' ability to access accurate information, which is essential for deliberation and decision-making in democracies. They also considered how disinformation is reducing trust in democratic governance, increasing polarisation, corrupting information ecosystems and even undermining consensus reality. A key question that Dialogue participants debated was what could be done to mitigate the spread of disinformation online or whether government should enact policies to counter disinformation online and its effects. The panel also assessed the criteria for what would make a successful countering disinformation program or policy.

Panel 2: Understanding and addressing online extremism

A growing body of evidence demonstrates that the internet can be an important factor in facilitating radicalisation to violent extremism. At the same time, there is acknowledgement that such a broad conclusion requires more detailed analysis. The panel engaged with how the internet and other computer-mediated communications can have multiple and various roles in facilitating radicalisation and mobilisation to violent extremism. Discussion centred on whether content moderation was an effective or sufficient mechanism to counter the expression of violent extremism online and what else should be considered to counter online extremism and its real-world harms.

Panel 3: Foreign interference in the digital realm

The digital environment has provided more opportunities for malign foreign influence and foreign interference. Through digitally enabled information warfare operations, election interference, deep fakes and various other means of undermining democratic political processes and institutions, foreign actors are violating national sovereignty via digital technologies. Participants discussed how democracies, in responding to this challenge, should react proportionately and according to democratic principles. The panel also addressed the ways in which digitally enabled disinformation, extremism and foreign interference are linked. They considered a wide range of comprehensive policy responses to address these interrelated digital challenges to democracy.

Panel 4: Regulation and transparency

After many years of a laissez-faire approach to the tech sector, there are increasingly louder calls for tighter regulation - and government has responded. But despite the new regulations that are being enacted and considered, there are few that address the tech sector's underlying business model of data acquisition and exploitation. Dialogue participants discussed the tensions between safety regulations and concerns about privacy and freedom of expression and how to best balance these competing priorities. Participants also considered regulations that would proffer greater transparency, particularly algorithmic transparency, from digital platforms and how gaining a greater understanding of how digital platforms function would help to address digital challenges to democracy.

Panel 5: Digital citizenship and impacted communities

In multicultural democracies and pluralistic societies, certain communities can be targeted as a means to undermine democratic institutions and social cohesion. At the same time, individual citizens and civil society groups have found ways to harness the digital environment to better engage in deliberation, dialogue and to address polarisation and other digital challenges. Dialogue participants examined ways in which particular communities have been impacted by online harms and how civil society and government can best mobilise to support solutions to these challenges.

Key takeaways

Digital communications technologies have undoubtedly brought benefits and advantages to the way people work, live and communicate. But along with these benefits have come a myriad of challenges that acutely impact democratic societies. Australia is well placed to meet these challenges and has a number of protective factors embedded in its democratic structures and approaches. However, we must be proactive in meeting these challenges as they are ever evolving.

Individuals can make a difference in countering digital threats to democracy, but societies cannot rely solely on interventions that target individuals or put the onus of responsibility to address these challenges on individual citizens. Rather, a whole-of-society approach is needed, with more leadership and regulation by the state.

Many digital threats to democracy are created by a combination of human and technological vulnerabilities. Therefore, we cannot solely "engineer" ourselves out of these problems. We need more people- centred solutions that address human needs, frailties and vulnerabilities and approaches that can harness human emotions, ingenuity and resilience. Currently, technology and engineering are leading tech policy and development but these need to be accompanied by social and human centric approaches.

Digital technologies have enabled the decentralisation and rapid increase of information and content production. The massive quantities of information, content and data that are produced also make the battle for attention more contested, creating a negative feedback loop of attention-grabbing content that is often highly polarising, arousing or distracting in ways that do not serve democratic societies.

Human attention is the prized commodity in the digital economy. The 'attention economy,' driven by the clicks, views and likes of online content, drives revenue to the for-profit platforms that dominate the online ecosystem and monetises attention in ways that challenge democracy.

Alongside the attention economy is the extraction of massive amounts of user data that is used to deliver more attention-grabbing content and targeted advertising. This poorly regulated business model has been utilised and weaponised for the spread of online disinformation and provided a mechanism for malign foreign influence and foreign interference in addition to distracting us away from more fulsome engagement in our democracy.

More agile responses are needed from democratic governments and civil society. Democracies have been slow to recognise and address digital threats to democracy, while authoritarian adversaries are increasingly adept at weaponising the digital environment. Government policies and societal understanding and appreciation of the challenges have not generally evolved and responded at the speed of technological change. Where government responses have accepted certain risks 6 and demonstrated agility - such as the successful online counter-disinformation election integrity campaign by the Australian Electoral Commission or the Taiwanese approach of harnessing civil society - they have, on the whole, proved successful.

Challenges of disinformation and other forms of mal-information

A key challenge is the spread of disinformation and other forms of mal-information. While the spread of disinformation and misinformation is not a new phenomenon, the digital environment has allowed for the production and consumption of mis, dis and mal-information at scale. This has had acute impacts on trust and levels of polarisation, which subsequently hampers the ability to engage in agonistic pluralism, let alone reach consensus, in democratic societies. The gamification and commodification of disinformation that is enabled by the digital environment has caused the spread and uptake of disinformation to increase and made its impacts more serious. Disinformation has become so acute that it has at times led to the fracturing of consensus reality (i.e., the Big Lie around the 2020 US presidential elections).

The success of a disinformation operation is measured by how well it confuses, misdirects or sows doubt within the information environment. Success of a disinformation operation does not necessarily equate to persuasion to a point of view or framing of an issue.

The Covid pandemic underscored the prevalence and dangers of disinformation and other forms of mal information spread on digital platforms. Covid disinformation has not only impacted the effectiveness of public health responses, it has also contributed to political violence and undermined social cohesion and democratic governance.

Despite the significant threat posed by the rapid spread of disinformation via online platforms from foreign adversaries, many times, that threat is "coming from inside the house". Political and partisan actors within democracies are also deploying disinformation campaigns, using similar tactics to those of foreign adversaries in online spaces against partisan opponents. Even combatting disinformation efforts have been weaponised in these partisan battles. This partisan-driven disinformation undermines democracy and is doing our adversaries' work for them.

Digital literacy, fact-checking, debunking and prebunking programs to address disinformation play an important role in addressing online disinformation, but there is no way to fact-check our way out of a crisis of truth and trust, nor can governments or individuals rely exclusively on content moderation and removal to address disinformation, extremist and other harmful content online. While these methods can be part of the solution, content moderation, fact checking, digital literacy education and awareness are not enough to address these challenges. 7

Too often, the focus is on addressing the veracity of content, but not the sociality or emotion behind it. Humour and emotion are important and underappreciated components of effective communication and should be more effectively harnessed to address disinformation and other forms of mal-information.

While the "whack-a-mole" approach or reliance on policing online content has been identified as insufficient, other evidence presented at the Dialogue demonstrated that responding swiftly to instances of online disinformation with humour, consistency and directness engenders trust and goes towards building a reputation of forthrightness and accuracy for government agencies. This approach will have the cumulative effect of lessening the impact of digital threats to democracy in future. In other words, consistent reactive action paradoxically has the effect of becoming a preventative approach.

There continues to be support for undemocratic candidates in electoral democracies. Support for undemocratic candidates is: (1) a function of the lack of support or value placed on democratic principles; (2) based on a sense of the lack of suitable alternatives to vote for; and (3) mis- and disinformation or lack of knowledge that candidates are engaging in undemocratic practices.

Disinformation and other narratives around election interference and fraud have led to growing distrust in the integrity of elections, highlighted by the 2020 US presidential elections and the Big Lie. This is a particularly damaging trend. Therefore, not only do election operations and procedures have to be impeccably conducted, but the communications strategy around election processes must be robust and proactive in order to pre-emptively guard against election disinformation campaigns. Australia's compulsory voting system, the integrity of the AEC, the NSWEC and other state electoral commission, and AEC's past track record of maintaining election integrity and addressing disinformation around election systems and procedures have been particularly important in the Australian context as a protective factor against digital threats to democracy.

Rethinking digital infrastructure for a stronger democracy

The vast majority of digital infrastructure (assets related to mobile and internet communications or platforms that provide services online and through software applications) is owned by for profit private corporations with insufficient oversight or regulation by the state. This underlying fact has contributed to the digital threats and challenges democracies now face. This should lead states to consider developing and funding more public digital infrastructure. Digital public infrastructure, as defined by head of the Institute for Digital Public Infrastructure Ethan Zuckerman, is comprised of spaces that operate with norms and affordances designed around a set of democratic civic values; public service digital spaces that let us engage in public and civic life.

To create digital public infrastructure in a way that will benefit or service democracy or contribute to public health, the focus cannot just be on users and content. 8 It must centre on people - their skills, abilities, training, imagination, knowledge and protocols - as well as the rules, ethics, routines, standards, policies, expectations and norms of the infrastructure.

Government intervention has been focused on protecting against threats to private information and data, which is critical in safeguarding our ever-eroding privacy in the digital age. However, the same priority should be considered for public information. The public information space is a public good and consideration should be given to how it is safeguarded, in the same way individual private information and privacy is prioritised.

Big Tech's unfettered business model, which is based on what Harvard professor Shoshanna Zuboff has termed "surveillance capitalism" and the commodification of attention, has created many harms and risks. Examples include polarisation and fragmentation of the public, proliferation of hate speech, the spread of disinformation, as well as the datafication and commodification of the public at scale, their interests, vices and vulnerabilities, all of which can be exploited. In addition to the consideration of digital public infrastructure, the regulation of online advertising, privacy and use of personal data - particularly of children - is critical to addressing these challenges in the future.

Regulation to defend democracy

Current policy settings deal with the symptoms and effects of tech rather than setting principles and guidelines that determine what capabilities and values digital technologies should have in order to service democratic societies.

Many democracies are operating under a patchwork system of regulatory frameworks. The regulation architecture that currently exists is for a media and information environment that is decades old and that was developed when the internet was in its infancy. The world is now dealing with challenges that current legislative and regulatory frameworks are ill-equipped to handle.

The tech industry has traditionally resisted regulation. However, tech exceptionalism in industry regulation has come to an end, especially given the scale on which many digital platforms operate. Mainstream platforms allow actors to reach millions, sometimes billions, of people, therefore more comprehensive regulation is required.

Tech platforms not only need to assess the risks of their platforms, services and technology, but should proactively incorporate "safety by design" and to take an ethical and human-centric approach to their technology design and capabilities. The only way to make online spaces safer is to "build it in rather than bolt it on".

Regulation norms should be driven by democratic values and princples in order to mitigate harms in a way that respects human rights, privacy and freedoms of expression and association.

Impacted communities

Targeting of minority or vulnerable communities and identities - via dehumanisation, hate speech or conspiracy theories - threaten social cohesion and can even be the first signs of more fundamental authoritarian and fascist threats and challenges to democratic societies. The digital environment, by acting as a shield from the direct consequences of interpersonal communication and interaction, has accelerated dehumanising content that targets these communities.

Free speech absolutism can lead to marginalisation of minorities and vulnerable groups. It can serve to limit speech and silence certain communities. Data shows that it particularly affects women and girls, and ethnic, racial and LGBTQI minorities. Gendered online abuse is a significant issue that shuts down voices and deliberation in the public sphere.

There is also evidence that women and diverse peoples are being dissuaded from leadership roles due to online abuse.* The current legal framework for dealing with online harms is comprised of: (1) the Anti-Discrimination Act, which is complaint-driven and puts the burden on individuals to report behaviour, leading to the whack-a-mole approach; (2) various criminal laws, which do not deal sufficiently with borderline behaviour; and (3) various codes of practice, the Online Safety Act and Broadcasting Services Act, all of which only deal with the highest threshold of serious harms.

Australia has appointed the world's first eSafety Commissioner to keep citizens safe from online harms. The work of the Commissioner is ongoing, evolving and done in consultation with community.

Digitally enabled foreign interference

Government agencies have assessed the level of malign foreign influence operations (FIO) directed at Australia as extensive and occurring at every level of society. FIO is also a shared challenge across global democracies.

FIO are often deniable, integrated, incremental, multi-layered and many times enacted in the digital realm. Taken in parts, FIO may be benign or not "that bad", but in aggregate, the result of a multi-layered FIO campaign is cumulatively damaging. Additionally, online information operations and foreign influence operations have become more diffuse and sophisticated as foreign adversaries have adapted their tactics and operations to evade scrutiny.

Australia has been a global first mover in updating its legislation, policy frameworks and bureaucratic structures to deal with FIO risks by focusing on the most destabilising kind of malign foreign influence - foreign interference. But there is also a "grey zone" of unacceptable foreign influence. "Grey zone" operations deliberately exploit and evade existing legal regimes and response 10 thresholds. As a result, understanding cultural and political norms, and addressing broader economic structures and data protection measures, in addition to introducing screening programs and legislative bans on certain activities, are critically important in countering FIO.

Not only are there inauthentic accounts and networks (bots) being used for foreign influence and information operations, increasingly, adversarial online information operations are infiltrating authentic activism.

Cybersecurity is a key concern and cyber intrusions can be a means of foreign interference. But often times, those who exploit the internet are not conducting any 'hacking' or intrusion. Rather they are simply using and exploiting the affordances of current digital platforms and infrastructure to conduct foreign interference.

Extremism and other harmful content and behaviours

There is much online behaviour and content that sits outside what is expressly illegal, but that still leads to significant harm. It is known as "borderline content". This "awful but lawful" content, discourse and behaviour is dehumanising and damaging to individuals and groups and negatively impacts social cohesion and the health of our democracy.

The concept of online radicalisation is contested, the process of online radicalisation is not homogeneous or linear and there is a complex interplay between online and offline factors in the radicalisation process.

Online extremist activity, networking and extremist content consumption do not necessarily lead to offline action. In most cases, being extremist online does not lead to violent action offline. However, research evidence demonstrates that immersion in extremist online communities and engagement with extremist content online can play an important role for violent extremist actors and terrorists.

Terrorist or extremist violence is not the only harm that is concerning or negatively impacting democracies as a result of online extremist content and ecosystems. A focus on violence obscures broader challenges to social cohesion and democracy as well as the cumulative ill effects that engaging with extremist content and within online extremist communities can have on interpersonal relationships.

Ideologically motivated and targeted violence remains a critical concern, but the growth of extremist communities online is the more systemic threat to democratic social norms. These communities are increasingly conspiratorial, anti-democratic, transnational, and often justify the use of violence. They also present an opportunity for foreign actors to engage in influence operations and entice the participation of domestic bad faith political actors and elected officials who are not committed to democratic values. 11

Online radicalisation is not only occurring on specific platforms. Though some platforms offer more affordances, online radicalisation, recruitment and mobilisation occurs across digital platforms more broadly. Violent extremists use many different online platforms for various operational, recruitment and propaganda purposes. Therefore, the signals of violent extremism expression online can look different depending on the platform.

There are several challenges in addressing online extremism. They include: the need to balance privacy and human rights with content moderation and deplatforming; the lack of a consistent definition of terrorism that can be agreed upon by platforms and governments; determining the link between online and offline violent extremism; and the need to understand the role of algorithms in radicalisation and amplification of extremist content, which is currently incomplete as tech platforms are unwilling to "open the black box". However, there are more opportunities for intervention and prevention earlier in the process of observed radicalisation and engagement with online extremist content.

Mainstream tech platforms, such as those belonging to the Global Internet Forum to Counter Terrorism (GIFCT), are taking steps to counter disinformation, violent extremist content and hateful and harassing content, and have developed incident response protocols. However, even though these companies have a large portion of the market share, they do not represent the entirety of the online ecosystem and there are a number of other platforms (Telegram, chans, etc.) where dangerous content thrives that are not enacting similar measures.

For future consideration

In the process of robust discussion and dialogue, the DTD Dialogue generated a number of recommendations from participants. Below is a summary of those recommendations for consideration. These ideas for future consideration should not be taken as endorsed or agreed upon by all Dialogue participants.

On addressing disinformation and mal-information

Disinformation or conspiratorial narratives spread online are often a hodgepodge of disjointed, even contradictory claims. These narratives do not need to make sense to their believers, rather individuals engage in disinformation and conspiracy theories to fulfill other psychosocial needs and to participate, coalesce and cohere around communities and social movements. Therefore, in order to address disinformation, actions beyond mere fact-checking and debunking campaigns must be used to counter damaging disinformation and conspiracy theories. Instead, governments and civil society actors must address the sociality of disinformation and conspiracy beliefs rather than their veracity.

Government needs to communicate proactively, clearly and consistently with the public about its countering disinformation efforts. Democratic citizens are within their rights to question government efforts to influence or regulate discourse and behaviour. Therefore, governments need to clearly communicate why and when such actions are taken.

It is also important to establish a threshold for when disinformation targeting government agencies or programs requires a response from government. Not all low-level disinformation will require a response - sometimes a response will only serve to amplify the disinformation. But when it does reach that identified threshold, governments should ensure that there is an agile and efficient response in place.

Be prepared and be proactive. Government agencies and officials need to plan and have strategies ready for online malign foreign influence and disinformation campaigns targeting government and institutions. Government agencies and responsible civil society actors should project domain expertise so that the void is not filled by disinformation or other forms of mal-information.

Prebunking has been shown to work more effectively than debunking mis- and disinformation narratives and campaigns. The way that social media platforms are currently designed gives advantage to first movers, so prebunking or information inoculation can be more effective in addressing the harms of disinformation and other forms of mal-information.

There needs to be a greater focus on building citizen resilience to disinformation and other online harms rather than relying primarily on content moderation and counter-disinformation campaigns.

It is important to go where the people are - fact sheets on government websites are insufficient as often people may not go to official government agency websites as the first port of call to obtain information. Government communications campaigns need to incorporate concurrent opportunities to engage on social media and legacy media, and via both online and offline local community organisations and hubs.

Creating disinformation registers can highlight and help debunk disinformation campaigns and narratives. Disinformation registers can also serve as important resources for researchers and analysts.

Public interest journalism is an effective antidote to disinformation and other forms of mal-information. Providing more awareness and training for journalists can be an effective means of countering the spread and harmful effects of disinformation. It is also important to provide awareness for journalists on how legacy and mainstream media can inadvertently spread and amplify disinformation and other harmful content.

Unfortunately, the more the issue of disinformation is raised, the more distrust is potentially engendered among the public around official sources of information and mainstream news. One suggested work-around is to encourage the active consumption of information (i.e. asking who is writing it and who is funding it.)

On safeguarding democratic institutions and values

Generalised civics education can play an important role in addressing these intersecting challenges to democracy. Educating the public on the functioning of parliamentary democracy, levels of government, the functioning of bureaucracies, elections and representation may help buffer disinformation around political power and authorities.

Government should back and defend public-facing civil servants and public institutions, proactively safeguarding their reputation and integrity instead of reactively responding to crises or attacks.

Government agencies should build their reputation for the long term by building a track record of engagement and trust with the public. This will lend greater credibility to government communications when officials or agencies need to respond to a major event or crisis or to counter disinformation. They must be continuously engaging in the information space rather than reacting when issues arise.

It is possible to reduce support for undemocratic candidates and reduce polarisation using short and scalable online interventions, but there is no one-size-fits-all approach and different causes require different interventions. The most successful online interventions have involved reducing tolerance for undemocratic practices and strengthening support for democratic principles. Other successful interventions have focused on reducing or correcting anti-democratic misperceptions of political opponents. Further successful online interventions included those aimed at decreasing dislike for political opponents and addressing bias evaluation of politicised facts through the cultivation of joint or uniform identity among the citizenry.

Harnessing and encouraging the power of civil society is a key approach that should be utilised more often by democratic governments and societies. Civil society organisations (CSOs) that address digital challenges to democracy are able to keep an appropriate distance from government, which helps their credibility and creates organic synergies. Working with CSOs can also assist government agencies in outreach efforts. However, these efforts are resource-intensive and often underfunded. Government can play a role by funding or working in coordination with these CSO efforts.

Governments are well versed in citizen consultation and engagement. However there should be consideration for governments to actively pursue further opportunities for shared decision making. This can include considering deliberative democracy and participatory democracy models as a method of engendering trust and engagement with democracy.

On addressing digitally enabled foreign interference

The country agnostic approach to public discussion and government strategies hampers a risk management-based approach to addressing FIO by non-government actors. Consideration should be given to adjusting this country agnostic approach in favour of identifying the countries from which FIO are coming from in order to more efficiently and appropriately allocate resources to manage the associated risks.

Countering foreign interference (CFI) strategies must also manage social cohesion risks as more forward leaning CFI approaches could result in perverse outcomes for impacted communities.

Investment should be made in community-level understanding to help address the challenge of FIO. Public engagement, public education and empowering decentralised responses are important ways to counter FIO. A risk mitigation rather than risk elimination approach that incorporates these greater pubic engagements would harness the strengths of democratic societies and structures. * Government should consider a national public facing counter-foreign interference strategy, just as government has done with its national counterterrorism strategy. There are well-established cross-jurisdictional structures to deal with other national security threats, such as terrorism, and they could be similarly applied to addressing malign FIO and foreign interference.

Considering more robust regulation and public infrastructure

The following principles could effectively guide Big Tech regulation: (1) expand regulation to include mitigation of risks from platform systems and processes; (2) expand regulation to include addressing risks and harms to community and society in addition to risks and harms to individuals; (3) ensure platform accountability and transparency rather than the current setting, which places the burden of responsibility on individual actors; (4) work towards comprehensive regulation that addresses gaps in the regulatory framework; (5) move away from self-regulation, self-reporting, voluntary transparency reporting and voluntary codes of conduct and instead move towards co-regulation and/or enforced/mandated regulation; and (6) resource and join up government regulators.

Government could consider potential pathways for developing and funding more public digital infrastructure. Much in the same way there is publicly funded broadcasters, publicly funded public service digital spaces could potentially help mitigate the digital threats to democracy examined in this dialogue.

Independent civil society and/or academic research audits of social media platforms can serve an important function to address platform risks and digital threats to democracy.

Mainstream social media platforms maintain that they are not publishers and are therefore not liable for content on their platforms, claiming it is the individual users who post content that are individually liable. This removes the onus of responsibility from digital platforms. One potential approach would be to introduce a duty of care provision for digital platforms to reduce harms and threats to democracy.

Extremism will always be a contested concept, whereas dehumanisation is a more easily defined and understood one. Addressing harmful online content and behaviour through this dehumanisation lens would be one way to disrupt the challenges and limitations of programs and policies that aim to combat extremism. Using the dehumanisation rather than extremism paradigm could also allow for more pre-emptive rather than reactive responses and address these harms in a way that increases and maintains social cohesion.

Working across international jurisdictions and likeminded democracies is critical as most digital platforms in use today are multinational private companies headquartered outside Australia. Domestic efforts need to be supplemented and linked to international efforts among likeminded democracies.

The Digital Threats to Democracy Project is supported by the New South Wales Department of Premier and Cabinet. The information, advice and/or views expressed in this project are those of the project author/s and participant/s and do not necessarily reflect the views of the Lowy Institute or the NSW government.

Areas of expertise: Terrorism and violent extremism; digital technology; disinformation; authoritarianism; national security; emergency management and countering violent extremism; crisis and natural disasters; radicalisation; counterterrorism; policy; Middle East; US national security

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Digital Threats to Democracy Dialogue summary report

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The Lowy Institute convened the Digital Threats to Democracy (DTD) Dialogue on 12 October 2022. This Dialogue was funded by the New South Wales Department of Premier in Cabinet and was a day-long, closed-door session that brought together a distinguished group of diverse subject matter experts, government officials and civil society stakeholders to examine intersecting digital challenges to democracy.

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The Evolution of Cyber Operations in Armed Conflict - Digital Front Lines

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The Evolution of Cyber Operations in Armed Conflict - Digital Front Lines

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Hybrid warfare, the use of nonmilitary tactics alongside conventional kinetic warfare to achieve foreign policy goals, is hardly a new phenomenon. However, Russia’s use of hybrid warfare techniques in Ukraine—particularly cyber operations—is unprecedented in scale and scope. Cyber operations, the use of digital technology to surveil, disrupt, corrupt, or destroy government, civilian, and information infrastructure, are a rapidly evolving and increasingly common method of attack, constituting a key domain of hybrid warfare. The frequency and variety of cyber operations in the ongoing Ukraine war have underscored the urgency of not only better understanding their manifestations but also identifying strategies to mitigate their destructive impacts.

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Hybrid warfare, the use of nonmilitary tactics alongside conventional kinetic warfare to achieve foreign policy goals, is hardly a new phenomenon. However, Russia's use of hybrid warfare techniques in Ukraine-particularly cyber operations-is unprecedented in scale and scope. Cyber operations, the use of digital technology to surveil, disrupt, corrupt, or destroy government, civilian, and information infrastructure, are a rapidly evolving and increasingly common method of attack, constituting a key domain of hybrid warfare. The frequency and variety of cyber operations in the ongoing Ukraine war have underscored the urgency of not only better understanding their manifestations but also identifying strategies to mitigate their destructive impacts.

Produced by FP Analytics with support from Microsoft, this issue brief analyzes the evolution of cyber operations in contemporary armed conflicts. It underpins a broader three-part multicomponent research and data visualization project featuring analysis from FP Analytics alongside expert insights from luminaries across the public, private, and nonprofit sectors around the globe. Taken together, the Digital Front Lines project brings sharpened focus to the compounding risks, emerging implications, and key opportunities related to the challenge of hybrid warfare.

Unpacking Cyber Operations in Armed Conflict

In Ukraine and elsewhere, threat actors are unleashing cyber operations to immobilize government services, sabotage critical infrastructure, disrupt elections, and achieve other objectives. In armed conflicts, threat actors are leveraging cyber tactics to augment kinetic operations. Moreover, threat actors are wielding cyber operations-such as those that generate and amplify disinformation-to weaken and undermine social cohesion, exacerbating political fragmentation.

Different Types of Cyber Threat Actors

A threat actor is any organization, person, or group that directs or facilitates an attack in cyberspace to cause harm against a specific target, including state and nonstate entities. Within the targeted organization, a threat actor may be able to recruit agents to serve as "insider" operatives, who are motivated by profit, personal grievance, or sympathetic to a political cause.

States: Operatives within a country's government, including, for example, military and intelligence agencies that conduct cyber operations as part of the broader conduct of foreign policy.

Cybercriminals: Nonstate actors, including individuals and groups, who conduct cyber operations primarily motivated by profit.

Hacktivists: Nonstate actors with a political motive, who limit their activism to the cyber domain. They may or may not be sympathetic to a particular state.

Terrorist groups: Nonstate actors who are ideologically motivated and often seek to sow discord or spread influence campaigns alongside physical attacks.

Cyber mercenaries: For-hire, private cyber operatives who are contracted by a state or nonstate actor for a specific operation, or for the sale of specific technology.

In recent decades, cyber operations have played a central role in "gray zone" tactics, in which state parties to a dispute maintain high-level diplomatic relations while interacting antagonistically below the threshold of war. Nonstate threat actors may act independently or be affiliated with, and supported by, governments.

Cyber operations are not solely a Russian domain

As these examples illustrate, various threat actors use cyber operations for information warfare, high-publicity diplomatic statements, surveillance, and other goals.

Data sources: Defense One, Middle East Eye, The White House, Acronis, BBC News, Canadian Medical Association Journal, BBC News, Sky News, U.S. GAO, TechTarget, Reuters, Politico, Amnesty International, Business & Human Rights Resource Centre, The Washington Post, Insider, Council on Foreign Relations, Microsoft

As cyber operations have become increasingly sophisticated and widespread, it is imperative for policymakers, business leaders, technical experts, civil society groups, and other stakeholders involved in addressing and mitigating cyberattacks to recognize and understand these tactics within the frame of hybrid warfare. Doing so is critical to avoid falling behind on the latest cyber developments and to foster collaboration to counter those threat actors who deliberately and indiscriminately harm civilians and civilian infrastructure for geopolitical advantage.

How Russia's Sustained Cyber Campaign Laid the Groundwork for Hybrid Warfare

While Russia's full-scale ground invasion began in February 2022, the Kremlin has been using cyber tactics to prime, destabilize, and coerce Ukraine since at least 2013, if not earlier. Russia has long waged a coordinated campaign of cyberattacks on government targets and information operations and has used cyber sabotage of critical infrastructure alongside its ground and air operations in Ukraine. Integrated cyber tactics used in Eastern Ukraine a decade ago foreshadowed Russia's hybrid approach to warfare in 2022.

Spurred by the 2013 Maidan Revolution-a popular movement that shifted Ukraine into closer political alignment with the European Union and NATO-Russia began using cyberattacks to paralyze, discredit, and distract political opponents. Russia launched distributed denial-of-service attacks, for example, to offline the Maidan movement in 2013 and to take down government computer networks and communications in 2014, likely to distract from Russian troop presence in Crimea days before an internationally denounced referendum on annexation. Russian operatives also hacked Ukraine's electronic vote-counting system, delaying the results of the October 2014 parliamentary election.

In parallel, the Kremlin launched information campaigns on mainstream and social media aimed at priming local communities to support annexation. Russian-sponsored media, bots, and troll farms evoked and manipulated historical anxieties and divisions by connecting the pro-Western Maidan movement with a 20th-century Nazi collaborator and portraying Russia as the protector of all ethnic Russians and Russian speakers. International disinformation operations by Russia sought to deter and delay a response from the Ukrainian government and the international community by portraying Russian-backed separatists in Eastern Ukraine and Crimea as home-grown freedom fighters. These coordinated campaigns demonstrated Russia's capacity and willingness to deploy cyber tools to exploit and amplify societal divisions before, during, and after ground activity.

Cyberattacks ramped up preceding Russia's full-scale invasion

The prevalence of cyberattacks targeting Ukraine signal a new era of hybrid warfare.

Data sources: Microsoft, Microsoft, CNN

Cyber operations intensified in frequency and scale in the months leading up to Russia's full-scale invasion. From July 2020 to July 2021, Microsoft found that 19 percent of global nation-state threat activity warnings they issued were made to customers in Ukraine, second only to the United States in that time period. On February 24, 2022, Russia launched its full-scale military invasion of Ukraine alongside a cyberattack on satellite modems that disrupted Ukrainian military communications. Since then, Russia has used coercive tactics-including DDoS, wipers, defacements, deepfakes, and scam emails-in an effort to discredit Ukrainian government targets, erode public trust, and demoralize Ukrainian society. At times, cyberattacks have coincided with kinetic action, for example, when Russian military strikes and cyberattacks targeted government agencies in Dnipro simultaneously on March 11, 2022. However, the ways and extent to which Russia is consistently aligning its cyber and kinetic strategies are yet to be fully determined.

How Attribution Challenges of Cyberattacks Can Undermine Diplomatic Consensus and Decisive Response

As Russia's operations in Ukraine have shown, there are many challenges to attributing cyber operations accurately and verifiably. Some attacks-those for surveillance, for example-can go undetected or unreported for long periods of time, thereby complicating a timely identification and counteraction strategy. Moreover, governments may choose to rely on proxies such as cyber mercenaries to deflect attention and maintain plausible deniability. They may also be constrained by intelligence-sharing protocols, while private organizations may be disincentivized from sharing perceived failures in their cyber defense capabilities. Barriers to making provable attributions and compiling evidence of attacks by public- and private-sector actors have the potential to undermine the swiftness and proportionality of diplomatic or military responses.

Looking Ahead

Cyber operations have proven to be viable and effective weapons in the arsenal of state and nonstate actors worldwide. In addition to their strategic advantages-particularly ambiguity around attribution and proportionality of response-cyberattacks can be highly destabilizing and magnify the effects of kinetic warfare. As such, open, communicative, and collaborative relationships between the private and public sectors are crucial to anticipating, identifying, deterring, and responding to cyber operations, especially as social networks, hardware, and broadband internet serve as the vectors of many attacks.

The whole-of-society impacts of cyber operations call for a whole-of-society approach to deterrence. To that end, coordination across government, industry, and civil society stakeholders will be critical in Ukraine and beyond. Furthermore, developing global policies and guidelines on attribution, response, deterrence, and accountability on cyber operations will be critical to ending impunity, protecting national security, and creating international stability in the face of future hybrid warfare.
By Avery Parsons Grayson (Senior Policy and Risk Analyst), Isabel Schmidt (Senior Research and Policy Analyst), and Dr. Mayesha Alam (Vice President of Research).
This issue brief was produced by FP Analytics, the independent research division of The FP Group, with financial support from Microsoft. FP Analytics retained control of the research direction and findings of this issue brief. Foreign Policy's editorial team was not involved in the creation of this content.

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The Evolution of Cyber Operations in Armed Conflict - Digital Front Lines

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The digital domain is increasingly a battleground for state and nonstate actors who are leveraging capabilities in cyberspace to advance strategic geopolitical goals.

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AWS' New Cyber Insurance 'Industry-Shaping' Program: 5 Big Things To Know

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AWS' New Cyber Insurance 'Industry-Shaping' Program: 5 Big Things To Know

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Customers who choose to leverage hardened infrastructure on AWS, coupled with a partner who can guide and implement the right security posture with AWS-backed cyber insurance as the backstop, is an untouchable offering in the market,’ says Justin Copie, CEO of AWS partner Innovative Solutions.

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'Customers who choose to leverage hardened infrastructure on AWS, coupled with a partner who can guide and implement the right security posture with AWS-backed cyber insurance as the backstop, is an untouchable offering in the market,' says Justin Copie, CEO of AWS partner Innovative Solutions.

Amazon Web Services is diving headfirst into the cyber insurance industry by launching a new program that guarantees customers a security insurance quote within two days, tied with massive revenue opportunities for the channel.

"I call this an industry-shaping moment," AWS' Ryan Orsi, worldwide head of cloud foundations for the AWS Partner Network, told CRN. "At this company, we do have a history of looking into market segments and technologies that are in need of reinvention. I would say the cyber insurance industry is in need of reinvention for the era of cloud."

At AWS re:Inforce Tuesday, the $85 billion global cloud market-share leader unveiled its new AWS Cyber Insurance Program. The program is aimed at helping AWS customers improve their security posture and get insured as quickly as possible-streamlining the sometimes-painstaking process of getting a customer the cybersecurity insurance it wants or needs.

[Related: The 10 Coolest New AWS Tools Of 2023]

Cyber Insurance Premiums High, Coverage Limits Low

AWS' Orsi said current cyber insurance policies include "a ton" of paperwork and back-and-forth communications that can last months, while at the same time there's a general lack of understanding of how things operate in the cloud between the two companies. "So unfortunately, it's resulted in insurance premiums being higher than expected and insurance coverage limits being lower than expected," he said. "The biggest [group] of companies that are affected by this manual process are the small to medium enterprises around the world. There's millions and millions of them."

The new AWS Cyber Insurance Program streamlines the entire procedure, thanks in part to the AWS Security Hub, with partners reaping the benefits.

Justin Copie, CEO of Innovative Solutions, an AWS partner, said many small to midsize businesses are struggling to obtain, and even keep, their cyber insurance in 2023.

"It's been increasingly difficult due to the overall increase in threats," said Copie. "AWS launching this program aimed at making it easier for customers to get better, faster cyber insurance will be met with significant praise and excitement. ... Customers who choose to leverage hardened infrastructure on AWS, coupled with a partner who can guide and implement the right security posture with AWS-validated cyber insurance as the backstop, is an untouchable offering in the market."

Here are the five most important things partners, insurers and Amazon customers need to know about AWS' new Cyber Insurance Program in terms of which insurance providers will be included, official designations and the channel opportunities ahead.

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AWS' New Cyber Insurance 'Industry-Shaping' Program: 5 Big Things To Know | CRN

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AWS launches cyber insurance program that will include IT security insurers and AWS partners to improve premiums and coverage limits for Amazon customers.

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What ChatGPT Can and Can't Do for Intelligence

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What ChatGPT Can and Can't Do for Intelligence

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In November 2022, ChatGPT emerged as a front-runner among artificial intelligence (AI) large language models (LLMs), capturing the attention of the CIA and other U.S. defense agencies. General artificial intelligence—AI with flexible reasoning like that of humans—is still beyond the technological horizon and might never happen. But most experts agree that LLMs are a major technological step forward. The ability of LLMs to produce useful results in some tasks, and entirely miss the mark on others, offers a glimpse into the capabilities and constraints of AI in the coming decade.The prospects of ChatGPT for intelligence are mixed. On the one hand, the technology appears “impressive,” and “scarily intelligent,” but on the other hand, its own creators warned that “it can create a misleading impression of greatness.” In the absence of an expert consensus, researchers and practitioners must explore the potential and downsides of the technology for intelligence. To address this gap, we—academics who study intelligence analysis and an information technology engineer—sought to test the ability of ChatGPT (GPT-4) to supplement intelligence analysts’ work. We put it to a preliminary test using Colin Powell’s famous request: “Tell me what you know. Tell me what you don’t know. Then you’re allowed to tell me what you think.” For each task, we provide the output from ChatGPT so that readers can reproduce the analyses and draw their own conclusions.

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Based on these findings, it seems possible that ChatGPT and its successors could eliminate of the intelligence analyst's job (e.g., tedious , although we acknowledge that ChatGPT does not summarize in a way that a human would recognize) and (e.g., assisting with for analytic products). Despite these capabilities, we note as others have that ChatGPT has notable limitations (e.g., ). It will also transform analytic tradecraft skills in , where "asking the right question" expands to include "prompt engineering." Prompt engineering being the process of optimizing the way questions or prompts are presented to extract set responses from an AI model. LLMs will also create new risks, through tactics like "data poisoning," as we explain below.

The model's reliance on training data poses risks from innocently false data (misinformation) to intentionally false data (disinformation). ChatGPT can reflect biases in the training data, potentially skewing the impartiality and objectivity of its generated output. Media reports of biased ChatGPT results on controversial political figures like illustrate this point. Another risk is when the model is " " by adversaries who purposely taint training data. As LLMs rely heavily on the quality of their training data, poisoned data can that are difficult to detect and mitigate.

How well the user explains what they want ChatGPT to do-known as prompt engineering-is critical for from the system. In its current form, ChatGPT's output is at a surface level, at least without significant and careful prompting.

Analysts can provide further enrichment, although ChatGPT limits the amount of text users can provide to the model.

In its response to the prompts, ChatGPT generated hypotheses and a list of arguments influenced by the context provided to it. The model generated three hypotheses: (1) Russia will use nuclear weapons in Ukraine, (2) Russia will pursue conventional war only, and (3) Russia will use nuclear weapons only as a bargaining tool.

The model then prepared a matrix and indicated whether a piece of evidence is consistent with each hypothesis. It's worth noting again that Chat GPT is not thinking in the human sense but "improvising" or filling in predictive text based on its training data.

Finally, ChatGPT generated an analysis based on the matrix, an overall conclusion, and future milestones to look out for. In the example, the output notes that the most likely hypothesis is that Russia will use nuclear weapons as a bargaining tool only.

No competent intelligence analyst would view these results as groundbreaking. The output is akin to a first draft an entry-level analyst might produce and then continually refine. This is where the current value of the technology is: Chat GPT serves as a good initial starting point for analysis. For instance, this initial hypothesis test could lead an analyst to refine the hypotheses or explore new sources of evidence. Chat GPT's ability to stimulate analyst thought holds true in how it helps analysts synthesize information, brainstorm, and critique their work.

ChatGPT shows promise in rapid synthesis of information from multiple sources, assuming users follow best practices (e.g., use quality data, good prompt engineering). For example, an array of assessments, which require the retrieval and summary of large quantities of information, such as the Uniform Bar Examination and the Graduate Record Examination (GRE).

To start, we prompted the AI with its role ("You are an AI trained to create concise, effective fast-track BLUF tactical reports from multiple sources") and provided prompting to create reports in a BLUF format with key findings and recommended actions. We then provided the news articles. As we note above, Chat GPT limits the amount of inputted text to enrich the model. In this example, we added a maximum of only two articles for summarizing. However, it is not hard to imagine organizations with access to their own LLMs able to process much larger amounts of data.

Chat GPT generated the BLUF-like memo composed of information sourced from the context and generated in line with the objectives of our prompt. The time elapsed, cost, and tokens used were consistent across numerous instances, with output being of similar quality.

The "Key Points" section highlights the takeaways while the "Executive Summary" provides main findings and recommendations. In addition, ChatGPT was tasked with correlating endnotes and APA style references to the generated content based on the sources.

ChatGPT and its successors can provide a time-saving measure to help analysts with the "big data" problem of trying to stay up to date. As we note above, the overall accuracy of the output is directly proportional to the quality and detail of the context provided to the LLM. As the old saying in computer science goes: "garbage in, garbage out."

"Tell me what you don't know."

We found that ChatGPT frequently recognized its limited understanding when faced with requests beyond the scope of its training data. In its responses, it offered informative answers that helped us identify topics it could not address. We noticed prompt engineering could be employed to refine results that fall outside the bounds of ChatGPT's knowledge base to encourage further promotion of honest admissions of the model's limitations. We found that prompt engineering can serve to circumvent safety measures entirely. With that in mind, at the time of the writing of this article, analysts should not use ChatGPT as an automated knowledge basedue to the inherent risk of misinformation.

Limitations aside, ChatGPT can be useful in the initial phases of a project to help with brainstorming. This can be achieved through fine-tuning on diverse data sets that encompass various perspectives, such as foreign intelligence reports or extremist manifestos, and through careful prompt engineering methods.

However, we prompted Chat GPT to consider more specific situations to draw out a more refined response from the model. In the improved prompt, we asked the model to consider that a police officer is nearby (10 feet away) and a dog is present. The output considers how Thompson might react depending on the dog's purpose (as a K-9 or an ordinary pet dog) or actions to escape ("blend into the crowd").

"... tell me what you think."

The output includes suggestions, questions, and "intel lenses," the latter of which focus on whether the content is supported by the premises in the report. One question asks the writer to consider how Iran's cyber capabilities compare to those of other rogue nations, such as North Korea. The model also suggests to "clarify the timeline for Iran's potential development of a nuclear weapon if it chooses to pursue one and if the JCPOA is not renewed." To deepen the critique, we prompted ChatGPT to generate rationales for each of the critiques with examples drawn from the text. For example, on the suggestion of including a timeline for Iran's acquisition of a nuclear weapon, the model output highlighted the importance of making clear the "urgency and importance of the issue."

The Implications for Workforce Development and Future AI Models

The rapid advancement of AI technologies is shaping professions across numerous industries with new systems emerging at a rate professionals might find difficult to keep up with. In intelligence, it is easy to imagine agencies developing innovative technologies with their own models trained on curated data, including classified information. With this changing landscape, ChatGPT is just another technology to which the intelligence community must intelligently adapt.

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What ChatGPT Can and Can't Do for Intelligence

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ChatGPT is a preview of how AI will disrupt intelligence work by streamlining tasks and creating new skills. We tested how far the technology has progressed.

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First G7 meeting on 'Hiroshima AI Process'

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First G7 meeting on 'Hiroshima AI Process'

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The Group of Seven industrialized countries have held their first meeting on how to best promote artificial intelligence. It is part of their framework called the "Hiroshima AI Process."
The online meeting on Tuesday was a continuation of the framework laid out at the recent G7 summit in Hiroshima, Japan.
The participants agreed that they need to work quickly to identify both the benefits and the risks of generative AI, such as ChatGPT. They also plan to continue discussions on how to protect copyright and tackle false information.
They made a plan for ministers from their countries to meet by the end of the year to compile some basic opinions, with the aim of establishing common rules on promoting trustworthy AI.
There are some differences of opinion among G7 members regarding generative AI. European countries want strict rules and regulations. Other countries, including Japan, want to focus on encouraging the development and use of the technology.
It remains to be seen if the member countries can reach a consensus on specific rules, as the rapid expansion of AI fuels concerns about privacy and information leaks.

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The Group of Seven industrialized countries have held their first meeting on how to best promote artificial intelligence. It is part of their framework called the "Hiroshima AI Process."

The online meeting on Tuesday was a continuation of the framework laid out at the recent G7 summit in Hiroshima, Japan.

The participants agreed that they need to work quickly to identify both the benefits and the risks of generative AI, such as ChatGPT. They also plan to continue discussions on how to protect copyright and tackle false information.

They made a plan for ministers from their countries to meet by the end of the year to compile some basic opinions, with the aim of establishing common rules on promoting trustworthy AI.

There are some differences of opinion among G7 members regarding generative AI. European countries want strict rules and regulations. Other countries, including Japan, want to focus on encouraging the development and use of the technology.

It remains to be seen if the member countries can reach a consensus on specific rules, as the rapid expansion of AI fuels concerns about privacy and information leaks.

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First G7 meeting on 'Hiroshima AI Process' | NHK WORLD-JAPAN News

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The Group of Seven industrialized countries have held their first meeting on how to best promote artificial intelligence. It is part of their framework called the "Hiroshima AI Process."

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MCNA gehackt: Neun Millionen US-Patientendaten im Darknet

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MCNA gehackt: Neun Millionen US-Patientendaten im Darknet

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Cyberkriminelle haben sensible Daten des US-Zahnversicherers MCNA gestohlen und im Darknet veröffentlicht. Die Täter fordern 10 Millionen Dollar Lösegeld.

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Wie das US-Zahnversicherungsunternehmen Managed Care of North America (MCNA) kürzlich mitteilte, haben sich Hacker Ende Februar Zugang zu seinem Netzwerk verschafft. Der Angriff wurde aber erst Anfang März entdeckt. Wie sich inzwischen herausstellte , haben die Täter dabei sensible Daten von knapp neun Millionen Versicherten, wie etwa die Anschrift, Telefonnummer oder E-Mail-Adresse erbeutet . Auch medizinische Daten, beispielsweise Röntgenaufnahmen, Informationen zu Behandlungen, verschriebene Medikamente und Namen der behandelnden Ärzte wurden abgegriffen.

Die berüchtigte Ransomware-Gruppe LockBit bekennt sich zu dem Angriff. Laut einem Bericht des Technikmagazins Bleeping Computer veröffentlichte die Bande Anfang März die ersten gestohlenen Daten des Unternehmens. Demnach drohte LockBit zunächst damit, 700 GB an sensiblen, Informationen zu veröffentlichen, wenn MCNA nicht 10 Millionen Dollar zahlt. Das Lösegeld wurde offenbar nicht gezahlt, da alle gestohlenen Dateien Anfang April veröffentlicht wurden.

Betroffene Personen werden von MCNA benachrichtigt. Zudem bietet das Unternehmen den Geschädigten für ein Jahr einen kostenlosen Service zum Schutz vor Identitätsdiebstahl an.

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MCNA gehackt: Neun Millionen US-Patientendaten im Darknet

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Cyberkriminelle haben sensible Daten des US-Zahnversicherers MCNA gestohlen und im Darknet veröffentlicht. Die Täter fordern 10 Millionen Dollar Lösegeld.

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Pleite durch Ransomware: US-Klinik schliesst wegen Cyberangriff

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Pleite durch Ransomware: US-Klinik schliesst wegen Cyberangriff

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Ein Krankenhaus im US-Bundesstaat Illinois muss wegen den finanziellen Auswirkungen nach einer Ransomware-Attacke schliessen.

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Pleite durch Ransomware: US-Klinik schließt wegen Cyberangriff

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Ein Krankenhaus im US-Bundesstaat Illinois muss wegen den finanziellen Auswirkungen nach einer Ransomware-Attacke schließen.

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The tension between difficult economic conditions and the pace of technology innovation, including the evolution of AI, is influencing the growth of identity-led cybersecurity exposure, according to CyberArk. The CyberArk’s report details how these issues – allied to an expected 240% growth in human and machine identities – have the potential to result in a compounding of ‘cyber debt’: where investment in digital and cloud initiatives outpaces cybersecurity spend, creating a rapidly expanding and unsecured identity-centric attack surface.

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Cyber debt levels reach tipping point - Help Net Security

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In 2023, cyber debt levels are at risk of compounding, driven by an economic squeeze and elevated levels of staff turnover.

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How North Korea's Hacker Army Stole $3 Billion in Crypto, Funding Nuclear Program

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How North Korea's Hacker Army Stole $3 Billion in Crypto, Funding Nuclear Program

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Regime has trained cybercriminals to impersonate tech workers or employers, amid other schemes

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WSJ News Exclusive | How North Korea's Hacker Army Stole $3 Billion in Crypto, Funding Nuclear Program

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The reclusive regime has trained cybercriminals to impersonate tech workers or employers, amid other schemes, helping fund its defense despite Western sanctions.

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Data ties healthcare cyberattacks to greater disruptions at nearby hospitals

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Data ties healthcare cyberattacks to greater disruptions at nearby hospitals

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Ransomware and other cyberattacks against hospitals “should be treated as disasters,” given the increased patient-care disruptions faced by nearby healthcare providers in the aftermath of an attack, according to a new study published in JAMA Network Open.
The findings suggest a need to improve coordinated planning and response efforts between regional care providers.
“Hospitals adjacent to healthcare delivery organizations affected by ransomware attacks may see increases in patient census and may experience resource constraints affecting time-sensitive care for conditions such as acute stroke,” the research showed. The attacks and associated disruptions "should be considered a regional disaster."
The study was led by healthcare subject matter experts from the University of California San Diego Health: Drs. Jeff Tully, Theodore Chan and Christian Dameff. Dameff and Tully are well-known for leading the charge on medical device security, while Dameff has testified to Congress about patient-safety risks posed by hospital cyberattacks on adjacent providers.

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Ransomware and other cyberattacks against hospitals "should be treated as disasters," given the increased patient-care disruptions faced by nearby healthcare providers in the aftermath of an attack, according to a new study published in JAMA Network Open.

The findings suggest a need to improve coordinated planning and response efforts between regional care providers.

"Hospitals adjacent to healthcare delivery organizations affected by ransomware attacks may see increases in patient census and may experience resource constraints affecting time-sensitive care for conditions such as acute stroke," the research showed. The attacks and associated disruptions "should be considered a regional disaster."

The study was led by healthcare subject matter experts from the University of California San Diego Health: Drs. Jeff Tully, Theodore Chan and Christian Dameff. Dameff and Tully are well-known for leading the charge on medical device security, while Dameff has testified to Congress about patient-safety risks posed by hospital cyberattacks on adjacent providers.

UCSD is local to Scripps Health, and when a cyberattack on Scripps brought the health system down for a month in May 2021, area hospitals were left overcrowded and unable to keep pace with the influx of patients diverted from Scripps, Dameff told the House Energy & Commerce Committee in July 2021.

"Our ability to diagnose a patient is tied to the technology that we use every day as clinicians: we are so dependent," said Dameff, at the time. "You can imagine during a large ransomware attack, wherein these technical systems are no longer available, that we can't do our jobs as clinicians."

The new JAMA study examines the fallout from a hospital cyberattack and outages using data gleaned over the course of the month from the nearby hospitals unaffected by the cyberattack, but overwhelmed with the surge in patient care visits.

Scripps is not specifically mentioned in the study's findings, but referenced in the citations. The dates of the study also align with the Scripps cyberattack.

The researchers compared the four-week period prior to the attack to the four-week period of downtime at two academic urban emergency departments located near the impacted health system and evaluated 19,857 emergency department visits at the unaffected hospital.

Of those visits, 6,114 were before the attack, 7,039 were seen during the attack and recovery phase, and 6,704 occurred in the post-attack phase.

During the examined time period, San Diego County EMS reported ambulance diversion traffic at a median of 27 cumulative hours per day in the 4 weeks prior to the attack compared with 47 cumulative hours per day during the attack, and 31 cumulative hours per day after the attack.

The data showed "significant increases in patient census, ambulance arrivals, waiting room times, patients left without being seen, total patient length of stay, county-wide emergency medical services diversion, and acute stroke care metrics were seen in the unaffected emergency department... during the attack and postattack phases."

In comparison with the pre-attack phase, there were "significant increases" in overall patient admissions to the emergency departments and individuals who left without being seen during the attack phase. They also found similar increases in median waiting room times during the attack phase than before the attack.

The wait time before the attack was 21 minutes compared with 31 minutes during the attack phase. There was also a rise in length of stay for admitted patients: 614 minutes compared with 822 minutes during the attack. No significant increases were found between the attack and post-attack phases.

Researchers confirm patient-morbidity risks posed by cyberattacks

The study showed a "significant increase in stroke code activations during the attack phase compared with the pre-attack phase, as well as confirmed strokes."

In the four weeks before the attack, there were 59 ED stroke code activations. During the attack phase, that number nearly doubled to 103 activations. After the attack, the number again dropped to 65. There was also a significant rise in the number of confirmed stroke diagnoses: 22 before the attack phase and 47 during the attack. After the incident, ED stroke diagnoses returned to 28.

"We saw increases in stroke code alerts, stroke diagnoses, and acute treatments with tPA [tissue plasminogen activator] and endovascular treatments during the cyberattack and recovery," researchers wrote. "The increased stroke alerts were not correlated with longer times to stroke imaging (CT scan), tPA administration, or time to groin puncture for endovascular treatment."

The findings provide much-needed data on patient safety and care morbidity impacts brought on by cyberattacks. Multiple studies have suggested similar impacts, while surveys and providers themselves have made the suggestion. But data remains limited on the specific care disruptions brought on by cyberattacks deployed against connected providers.

Dr. Saif Abed, director of cybersecurity advisory services for AbedGraham Group, has routinely spoken to SC Media about the misplaced focus on patient mortality risks after ransomware or cyberattacks. The real issue after an incident is the impact to morbidity, or "suboptimal clinical outcomes. "

The JAMA report confirms those morbidity risks with the heightened impact on acute stroke patients at hospitals adjacent to a health system disrupted by a cyberattack.

"Indirect impediments to care have been associated with patient outcomes in the setting of other time-sensitive conditions, including acute myocardial infarction or cardiac arrest," researchers wrote. "It may be reasonable to consider the impact of cybersecurity disruption within such an outcomes-oriented context."

The hope is that this data will prompt change. Hospitals should work to develop emergency operations plans specific to cyberattacks to minimize recovery times. Those plans should include engaging with "regional partners to proactively plan for and drill for cyberattacks," they wrote. This should reduce regional impacts in the event of a ransomware attack.

Hospitals should also consider the use of real-time information sharing on cyber threat actors and current tactics, which should also reduce the risk posed by connected partners. These plans should include possible risks to patient populations, particularly high risk patients.

Providers must prioritize "measures to rapidly facilitate transfers among hospitals. Prolonged regional effects may necessitate consideration of reducing elective surgical cases and other extraordinary measures," researchers concluded. "Increasing cyberattack prevention efforts and operational resiliency across all health care systems should be a high national priority."

Since ransomware attacks began pummeling the sector in 2016, healthcare leaders have stressed that providers are only as strong as the weakest link. As such, securing the health sector will require improved threat sharing and coordination between regional partners.

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Data ties healthcare cyberattacks to greater disruptions at nearby hospitals

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JAMA study shows increased patient-care impacts at healthcare providers near hospitals hit by cyberattacks should be treated as regional disasters.

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At the start of the Cold War, a young man from southern Siberia designed what would become the world’s most ubiquitous assault rifle.

The AK-47, or Avtomat Kalashnikova, was never patented and thus easily reproducible. It is light and highly portable, making it easy to smuggle across borders. The AK-47 is also renowned for its simplicity: With very little training, most combatants, including children, can strip and clean one in minutes.

Decades later, the AK-47 (along with its variants) may be the most widely available military weapon on the planet. Even its inventor, Mikhail Kalashnikov, was surprised by its widespread uptake: “It was like a genie out of the bottle,” he reportedly said. “It began to walk all on its own, and in directions I did not want.”

The AK-47 and other light weapons have changed how conflicts are waged, where, and by whom. Though not designed for harmful purposes, the generative AI tools that have swept into the public spotlight in recent months may follow a similarly destructive path.

AI has the potential to change how wars are waged on a scale unseen since the rise of weapons like the AK-47. But few people are thinking about how these technologies will shape “forgotten conflicts” and humanitarian crises – including most humanitarian agencies.

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At the start of the Cold War, a young man from southern Siberia designed what would become the world's most ubiquitous assault rifle.

The AK-47, or Avtomat Kalashnikova, was never patented and thus easily reproducible. It is light and highly portable, making it easy to smuggle across borders. The AK-47 is also renowned for its simplicity: With very little training, most combatants, including children, can strip and clean one in minutes.

Decades later, the AK-47 (along with its variants) may be the most widely available military weapon on the planet. Even its inventor, Mikhail Kalashnikov, was surprised by its widespread uptake: "It was like a genie out of the bottle," he reportedly said. "It began to walk all on its own, and in directions I did not want."

The AK-47 and other light weapons have changed how conflicts are waged, where, and by whom. Though not designed for harmful purposes, the generative AI tools that have swept into the public spotlight in recent months may follow a similarly destructive path.

AI has the potential to change how wars are waged on a scale unseen since the rise of weapons like the AK-47. But few people are thinking about how these technologies will shape "forgotten conflicts" and humanitarian crises - including most humanitarian agencies.

AI engineers and enthusiasts may bristle at comparing a deadly weapon to generative AI, examples of which include GPT4, text-to-image models like Stable Diffusion and DALL-E 2, or Eleven Labs ' speech synthesis and voice-cloning tools. ChatGPT certainly does: When I asked the language model about this analogy, it replied that my prompt was "potentially offensive" (it did not specify to whom) and that "it is not appropriate or respectful to compare a life-saving technology like AI to a weapon of war".

There are, however, key similarities: accessibility, portability, and simplicity.

The engineering behind generative AI is complex, but the tools themselves can be used by anyone with internet access. Their use isn't constrained by state boundaries nor adequately regulated (yet). And, at this stage, many of these tools are still free or virtually free.

"Generative AI, we're told, is meant to support human creativity, generate new forms of art, and simplify marketing. But this fails to account for other incentives driving demand and influencing its design."

In the wrong hands, generative AI could create audio or visual content in support of targeted propaganda and disinformation campaigns, turning the proverbial "fog of war" into a murk so dark and dense that only the most sophisticated tools will spot fact amid the fiction. This could make it harder to bring warring parties to the peace table, or prevent those fleeing conflict from accessing life-saving humanitarian assistance or finding refuge across a border.

Just as the social media giants of the last decade failed to prevent misinformation and hate from weaponising their networks, today's tech firms are not designing AI with conflicts in mind. They shouldn't be relied on to build in the necessary guardrails to protect against misuse.

Generative AI, we're told, is meant to support human creativity, generate new forms of art, and simplify marketing. But this fails to account for other incentives driving demand and influencing its design.

While China and the United States are battling to achieve supremacy in and through AI, so too are the few firms who have the data, computing power, and capital required to develop the technology.

One notable tech titan recently argued that increased government investment could enable greater technological innovation in support of US national security and defence. As the bioethicist and technology expert Wendell Wallach has warned, the commercial and political incentives underpinning advanced technologies like AI are merging.

This should be particularly alarming to the many humanitarian agencies who hold neutrality as a guiding principle for their operations and partnerships. These agencies should urgently reflect on how generative AI might affect the 2 billion people who live in the world's conflict areas.

Responding to my prompts, ChatGPT noted that "efforts must be made to ensure that the development and deployment of such technologies are governed by ethical principles and regulations to prevent their misuse".

But such boilerplate responses on ethics leave us with more questions: How will AI be regulated in places where the rule of law is weak? How will tech firms designing AI ensure their tech is "governed by ethical principles", particularly in light of recent layoffs? What happens when these tools fall into the hands of non-state armed groups? And how will refugees and humanitarian actors protect themselves from the potential harms?

Whatever the answers, it's safe to say that the genie is now out of the bottle.
Edited by Irwin Loy.

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Generative AI may be the next AK-47 - The New Humanitarian puts quality, independent journalism at the service of the millions of people affected by humanitarian crises around the world

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The economic potential of generative AI: The next productivity frontier

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The economic potential of generative AI: The next productivity frontier

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Generative AI is poised to unleash the next wave of productivity. We take a first look at where business value could accrue and the potential impacts on the workforce.

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AI has permeated our lives incrementally, through everything from the tech powering our smartphones to autonomous-driving features on cars to the tools retailers use to surprise and delight consumers. As a result, its progress has been almost imperceptible. Clear milestones, such as when AlphaGo, an AI-based program developed by DeepMind, defeated a world champion Go player in 2016, were celebrated but then quickly faded from the public's consciousness.

Generative AI applications such as ChatGPT, GitHub Copilot, Stable Diffusion, and others have captured the imagination of people around the world in a way AlphaGo did not, thanks to their broad utility-almost anyone can use them to communicate and create-and preternatural ability to have a conversation with a user. The latest generative AI applications can perform a range of routine tasks, such as the reorganization and classification of data. But it is their ability to write text, compose music, and create digital art that has garnered headlines and persuaded consumers and households to experiment on their own. As a result, a broader set of stakeholders are grappling with generative AI's impact on business and society but without much context to help them make sense of it.

The speed at which generative AI technology is developing isn't making this task any easier. ChatGPT was released in November 2022. Four months later, OpenAI released a new large language model, or LLM, called GPT-4 with markedly improved capabilities. Similarly, by May 2023, Anthropic's generative AI, Claude, was able to process 100,000 tokens of text, equal to about 75,000 words in a minute-the length of the average novel-compared with roughly 9,000 tokens when it was introduced in March 2023. And in May 2023, Google announced several new features powered by generative AI, including Search Generative Experience and a new LLM called PaLM 2 that will power its Bard chatbot, among other Google products.

To grasp what lies ahead requires an understanding of the breakthroughs that have enabled the rise of generative AI, which were decades in the making. For the purposes of this report, we define generative AI as applications typically built using foundation models. These models contain expansive artificial neural networks inspired by the billions of neurons connected in the human brain. Foundation models are part of what is called deep learning, a term that alludes to the many deep layers within neural networks. Deep learning has powered many of the recent advances in AI, but the foundation models powering generative AI applications are a step-change evolution within deep learning. Unlike previous deep learning models, they can process extremely large and varied sets of unstructured data and perform more than one task.

Foundation models have enabled new capabilities and vastly improved existing ones across a broad range of modalities, including images, video, audio, and computer code. AI trained on these models can perform several functions; it can classify, edit, summarize, answer questions, and draft new content, among other tasks.

All of us are at the beginning of a journey to understand generative AI's power, reach, and capabilities. This research is the latest in our efforts to assess the impact of this new era of AI. It suggests that generative AI is poised to transform roles and boost performance across functions such as sales and marketing, customer operations, and software development. In the process, it could unlock trillions of dollars in value across sectors from banking to life sciences. The following sections share our initial findings.

For the full version of this report, download the PDF.

Generative AI's impact on productivity could add trillions of dollars in value to the global economy. Our latest research estimates that generative AI could add the equivalent of $2.6 trillion to $4.4 trillion annually across the 63 use cases we analyzed-by comparison, the United Kingdom's entire GDP in 2021 was $3.1 trillion. This would increase the impact of all artificial intelligence by 15 to 40 percent. This estimate would roughly double if we include the impact of embedding generative AI into software that is currently used for other tasks beyond those use cases.

About 75 percent of the value that generative AI use cases could deliver falls across four areas: Customer operations, marketing and sales, software engineering, and R&D. Across 16 business functions, we examined 63 use cases in which the technology can address specific business challenges in ways that produce one or more measurable outcomes. Examples include generative AI's ability to support interactions with customers, generate creative content for marketing and sales, and draft computer code based on natural-language prompts, among many other tasks.

Generative AI will have a significant impact across all industry sectors. Banking, high tech, and life sciences are among the industries that could see the biggest impact as a percentage of their revenues from generative AI. Across the banking industry, for example, the technology could deliver value equal to an additional $200 billion to $340 billion annually if the use cases were fully implemented. In retail and consumer packaged goods, the potential impact is also significant at $400 billion to $660 billion a year.

Generative AI has the potential to change the anatomy of work, augmenting the capabilities of individual workers by automating some of their individual activities. Current generative AI and other technologies have the potential to automate work activities that absorb 60 to 70 percent of employees' time today. In contrast, we previously estimated that technology has the potential to automate half of the time employees spend working. The acceleration in the potential for technical automation is largely due to generative AI's increased ability to understand natural language, which is required for work activities that account for 25 percent of total work time. Thus, generative AI has more impact on knowledge work associated with occupations that have higher wages and educational requirements than on other types of work.

The pace of workforce transformation is likely to accelerate, given increases in the potential for technical automation. Our updated adoption scenarios, including technology development, economic feasibility, and diffusion timelines, lead to estimates that half of today's work activities could be automated between 2030 and 2060, with a midpoint in 2045, or roughly a decade earlier than in our previous estimates.

Generative AI can substantially increase labor productivity across the economy, but that will require investments to support workers as they shift work activities or change jobs. Generative AI could enable labor productivity growth of 0.1 to 0.6 percent annually through 2040, depending on the rate of technology adoption and redeployment of worker time into other activities. Combining generative AI with all other technologies, work automation could add 0.5 to 3.4 percentage points annually to productivity growth. However, workers will need support in learning new skills, and some will change occupations. If worker transitions and other risks can be managed, generative AI could contribute substantively to economic growth and support a more sustainable, inclusive world.

The era of generative AI is just beginning. Excitement over this technology is palpable, and early pilots are compelling. But a full realization of the technology's benefits will take time, and leaders in business and society still have considerable challenges to address. These include managing the risks inherent in generative AI, determining what new skills and capabilities the workforce will need, and rethinking core business processes such as retraining and developing new skills.

Generative AI is a step change in the evolution of artificial intelligence. As companies rush to adapt and implement it, understanding the technology's potential to deliver value to the economy and society at large will help shape critical decisions. We have used two complementary lenses to determine where generative AI, with its current capabilities, could deliver the biggest value and how big that value could be (Exhibit 1).

The first lens scans use cases for generative AI that organizations could adopt. We define a "use case" as a targeted application of generative AI to a specific business challenge, resulting in one or more measurable outcomes. For example, a use case in marketing is the application of generative AI to generate creative content such as personalized emails, the measurable outcomes of which potentially include reductions in the cost of generating such content and increases in revenue from the enhanced effectiveness of higher-quality content at scale. We identified 63 generative AI use cases spanning 16 business functions that could deliver total value in the range of $2.6 trillion to $4.4 trillion in economic benefits annually when applied across industries.

That would add 15 to 40 percent to the $11 trillion to $17.7 trillion of economic value that we now estimate nongenerative artificial intelligence and analytics could unlock. (Our previous estimate from 2017 was that AI could deliver $9.5 trillion to $15.4 trillion in economic value.)

Our second lens complements the first by analyzing generative AI's potential impact on the work activities required in some 850 occupations. We modeled scenarios to estimate when generative AI could perform each of more than 2,100 "detailed work activities"-such as "communicating with others about operational plans or activities"-that make up those occupations across the world economy. This enables us to estimate how the current capabilities of generative AI could affect labor productivity across all work currently done by the global workforce.

Some of this impact will overlap with cost reductions in the use case analysis described above, which we assume are the result of improved labor productivity. Netting out this overlap, the total economic benefits of generative AI -including the major use cases we explored and the myriad increases in productivity that are likely to materialize when the technology is applied across knowledge workers' activities-amounts to $6.1 trillion to $7.9 trillion annually (Exhibit 2).

While generative AI is an exciting and rapidly advancing technology, the other applications of AI discussed in our previous report continue to account for the majority of the overall potential value of AI. Traditional advanced-analytics and machine learning algorithms are highly effective at performing numerical and optimization tasks such as predictive modeling, and they continue to find new applications in a wide range of industries. However, as generative AI continues to develop and mature, it has the potential to open wholly new frontiers in creativity and innovation. It has already expanded the possibilities of what AI overall can achieve (see sidebar "How we estimated the value potential of generative AI use cases").

In this section, we highlight the value potential of generative AI across business functions.

Generative AI could have an impact on most business functions; however, a few stand out when measured by the technology's impact as a share of functional cost (Exhibit 3). Our analysis of 16 business functions identified just four-customer operations, marketing and sales, software engineering, and research and development-that could account for approximately 75 percent of the total annual value from generative AI use cases.

In addition to the potential value generative AI can deliver in function-specific use cases, the technology could drive value across an entire organization by revolutionizing internal knowledge management systems. Generative AI's impressive command of natural-language processing can help employees retrieve stored internal knowledge by formulating queries in the same way they might ask a human a question and engage in continuing dialogue. This could empower teams to quickly access relevant information, enabling them to rapidly make better-informed decisions and develop effective strategies.

In 2012, the McKinsey Global Institute (MGI) estimated that knowledge workers spent about a fifth of their time, or one day each work week, searching for and gathering information. If generative AI could take on such tasks, increasing the efficiency and effectiveness of the workers doing them, the benefits would be huge. Such virtual expertise could rapidly "read" vast libraries of corporate information stored in natural language and quickly scan source material in dialogue with a human who helps fine-tune and tailor its research, a more scalable solution than hiring a team of human experts for the task.

In other cases, generative AI can drive value by working in partnership with workers, augmenting their work in ways that accelerate their productivity. Its ability to rapidly digest mountains of data and draw conclusions from it enables the technology to offer insights and options that can dramatically enhance knowledge work. This can significantly speed up the process of developing a product and allow employees to devote more time to higher-impact tasks.

Following are four examples of how generative AI could produce operational benefits in a handful of use cases across the business functions that could deliver a majority of the potential value we identified in our analysis of 63 generative AI use cases. In the first two examples, it serves as a virtual expert, while in the following two, it lends a hand as a virtual collaborator.

Across the 63 use cases we analyzed, generative AI has the potential to generate $2.6 trillion to $4.4 trillion in value across industries. Its precise impact will depend on a variety of factors, such as the mix and importance of different functions, as well as the scale of an industry's revenue (Exhibit 4).

For example, our analysis estimates generative AI could contribute roughly $310 billion in additional value for the retail industry (including auto dealerships) by boosting performance in functions such as marketing and customer interactions. By comparison, the bulk of potential value in high tech comes from generative AI's ability to increase the speed and efficiency of software development (Exhibit 5).

In the banking industry, generative AI has the potential to improve on efficiencies already delivered by artificial intelligence by taking on lower-value tasks in risk management, such as required reporting, monitoring regulatory developments, and collecting data. In the life sciences industry, generative AI is poised to make significant contributions to drug discovery and development.

We share our detailed analysis of these industries below.

Technology has been changing the anatomy of work for decades. Over the years, machines have given human workers various "superpowers"; for instance, industrial-age machines enabled workers to accomplish physical tasks beyond the capabilities of their own bodies. More recently, computers have enabled knowledge workers to perform calculations that would have taken years to do manually.

These examples illustrate how technology can augment work through the automation of individual activities that workers would have otherwise had to do themselves. At a conceptual level, the application of generative AI may follow the same pattern in the modern workplace, although as we show later in this chapter, the types of activities that generative AI could affect, and the types of occupations with activities that could change, will likely be different as a result of this technology than for older technologies.

The McKinsey Global Institute began analyzing the impact of technological automation of work activities and modeling scenarios of adoption in 2017. At that time, we estimated that workers spent half of their time on activities that had the potential to be automated by adapting technology that existed at that time, or what we call technical automation potential. We also modeled a range of potential scenarios for the pace at which these technologies could be adopted and affect work activities throughout the global economy.

Technology adoption at scale does not occur overnight. The potential of technological capabilities in a lab does not necessarily mean they can be immediately integrated into a solution that automates a specific work activity-developing such solutions takes time. Even when such a solution is developed, it might not be economically feasible to use if its costs exceed those of human labor. Additionally, even if economic incentives for deployment exist, it takes time for adoption to spread across the global economy. Hence, our adoption scenarios, which consider these factors together with the technical automation potential, provide a sense of the pace and scale at which workers' activities could shift over time.

The analyses in this paper incorporate the potential impact of generative AI on today's work activities. The new capabilities of generative AI, combined with previous technologies and integrated into corporate operations around the world, could accelerate the potential for technical automation of individual activities and the adoption of technologies that augment the capabilities of the workforce. They could also have an impact on knowledge workers whose activities were not expected to shift as a result of these technologies until later in the future (see sidebar "About the research").

Automation potential has accelerated, but adoption to lag

Based on developments in generative AI, technology performance is now expected to match median human performance and reach top-quartile human performance earlier than previously estimated across a wide range of capabilities (Exhibit 6). For example, MGI previously identified 2027 as the earliest year when median human performance for natural-language understanding might be achieved in technology, but in this new analysis, the corresponding point is 2023.

As a result of these reassessments of technology capabilities due to generative AI, the total percentage of hours that could theoretically be automated by integrating technologies that exist today has increased from about 50 percent to 60-70 percent. The technical potential curve is quite steep because of the acceleration in generative AI's natural-language capabilities.

Interestingly, the range of times between the early and late scenarios has compressed compared with the expert assessments in 2017, reflecting a greater confidence that higher levels of technological capabilities will arrive by certain time periods (Exhibit 7).

Our analysis of adoption scenarios accounts for the time required to integrate technological capabilities into solutions that can automate individual work activities; the cost of these technologies compared with that of human labor in different occupations and countries around the world; and the time it has taken for technologies to diffuse across the economy. With the acceleration in technical automation potential that generative AI enables, our scenarios for automation adoption have correspondingly accelerated. These scenarios encompass a wide range of outcomes, given that the pace at which solutions will be developed and adopted will vary based on decisions that will be made on investments, deployment, and regulation, among other factors. But they give an indication of the degree to which the activities that workers do each day may shift (Exhibit 8).

As an example of how this might play out in a specific occupation, consider postsecondary English language and literature teachers, whose detailed work activities include preparing tests and evaluating student work. With generative AI's enhanced natural-language capabilities, more of these activities could be done by machines, perhaps initially to create a first draft that is edited by teachers but perhaps eventually with far less human editing required. This could free up time for these teachers to spend more time on other work activities, such as guiding class discussions or tutoring students who need extra assistance.

Adoption is also likely to be faster in developed countries, where wages are higher and thus the economic feasibility of adopting automation occurs earlier. Even if the potential for technology to automate a particular work activity is high, the costs required to do so have to be compared with the cost of human wages. In countries such as China, India, and Mexico, where wage rates are lower, automation adoption is modeled to arrive more slowly than in higher-wage countries (Exhibit 9).

Generative AI's potential impact on knowledge work

Previous generations of automation technology were particularly effective at automating data management tasks related to collecting and processing data. Generative AI's natural-language capabilities increase the automation potential of these types of activities somewhat. But its impact on more physical work activities shifted much less, which isn't surprising because its capabilities are fundamentally engineered to do cognitive tasks.

As a result, generative AI is likely to have the biggest impact on knowledge work, particularly activities involving decision making and collaboration, which previously had the lowest potential for automation (Exhibit 10). Our estimate of the technical potential to automate the application of expertise jumped 34 percentage points, while the potential to automate management and develop talent increased from 16 percent in 2017 to 49 percent in 2023.

Generative AI's ability to understand and use natural language for a variety of activities and tasks largely explains why automation potential has risen so steeply. Some 40 percent of the activities that workers perform in the economy require at least a median level of human understanding of natural language.

As a result, many of the work activities that involve communication, supervision, documentation, and interacting with people in general have the potential to be automated by generative AI, accelerating the transformation of work in occupations such as education and technology, for which automation potential was previously expected to emerge later (Exhibit 11).

Labor economists have often noted that the deployment of automation technologies tends to have the most impact on workers with the lowest skill levels, as measured by educational attainment, or what is called skill biased. We find that generative AI has the opposite pattern-it is likely to have the most incremental impact through automating some of the activities of more-educated workers (Exhibit 12).

Previous generations of automation technology often had the most impact on occupations with wages falling in the middle of the income distribution. For lower-wage occupations, making a case for work automation is more difficult because the potential benefits of automation compete against a lower cost of human labor. Additionally, some of the tasks performed in lower-wage occupations are technically difficult to automate-for example, manipulating fabric or picking delicate fruits. Some labor economists have observed a "hollowing out of the middle," and our previous models have suggested that work automation would likely have the biggest midterm impact on lower-middle-income quintiles.

However, generative AI's impact is likely to most transform the work of higher-wage knowledge workers because of advances in the technical automation potential of their activities, which were previously considered to be relatively immune from automation (Exhibit 13).

Generative AI could propel higher productivity growth

Declining employment is among those obstacles. Compound annual growth in the total number of workers worldwide slowed from 2.5 percent in 1972-82 to just 0.8 percent in 2012-22, largely because of aging. In many large countries, the size of the workforce is already declining. Productivity, which measures output relative to input, or the value of goods and services produced divided by the amount of labor, capital, and other resources required to produce them, was the main engine of economic growth in the three decades from 1992 to 2022 (Exhibit 14). However, since then, productivity growth has slowed in tandem with slowing employment growth, confounding economists and policy makers.

The deployment of generative AI and other technologies could help accelerate productivity growth, partially compensating for declining employment growth and enabling overall economic growth. Based on our estimates, the automation of individual work activities enabled by these technologies could provide the global economy with an annual productivity boost of 0.5 to 3.4 percent from 2023 to 2040, depending on the rate of automation adoption-with generative AI contributing 0.1 to 0.6 percentage points of that growth-but only if individuals affected by the technology were to shift to other work activities that at least match their 2022 productivity levels (Exhibit 15). In some cases, workers will stay in the same occupations, but their mix of activities will shift; in others, workers will need to shift occupations.

History has shown that new technologies have the potential to reshape societies. Artificial intelligence has already changed the way we live and work-for example, it can help our phones (mostly) understand what we say, or draft emails. Mostly, however, AI has remained behind the scenes, optimizing business processes or making recommendations about the next product to buy. The rapid development of generative AI is likely to significantly augment the impact of AI overall, generating trillions of dollars of additional value each year and transforming the nature of work.

But the technology could also deliver new and significant challenges. Stakeholders must act-and quickly, given the pace at which generative AI could be adopted-to prepare to address both the opportunities and the risks. Risks have already surfaced, including concerns about the content that generative AI systems produce: Will they infringe upon intellectual property due to "plagiarism" in the training data used to create foundation models? Will the answers that LLMs produce when questioned be accurate, and can they be explained? Will the content generative AI creates be fair or biased in ways that users do not want by, say, producing content that reflects harmful stereotypes?

There are economic challenges too: the scale and the scope of the workforce transitions described in this report are considerable. In the midpoint adoption scenario, about a quarter to a third of work activities could change in the coming decade. The task before us is to manage the potential positives and negatives of the technology simultaneously (see sidebar "Using generative AI responsibly"). Here are some of the critical questions we will need to address while balancing our enthusiasm for the potential benefits of the technology with the new challenges it can introduce.

Companies and business leaders

How can companies move quickly to capture the potential value at stake highlighted in this report, while managing the risks that generative AI presents?

How will the mix of occupations and skills needed across a company's workforce be transformed by generative AI and other artificial intelligence over the coming years? How will a company enable these transitions in its hiring plans, retraining programs, and other aspects of human resources?

Do companies have a role to play in ensuring the technology is not deployed in "negative use cases" that could harm society?

How can businesses transparently share their experiences with scaling the use of generative AI within and across industries-and also with governments and society?

Policy makers

What will the future of work look like at the level of an economy in terms of occupations and skills? What does this mean for workforce planning?

How can workers be supported as their activities shift over time? What retraining programs can be put in place? What incentives are needed to support private companies as they invest in human capital? Are there earn-while-you-learn programs such as apprenticeships that could enable people to retrain while continuing to support themselves and their families?

What steps can policy makers take to prevent generative AI from being used in ways that harm society or vulnerable populations?

Can new policies be developed and existing policies amended to ensure human-centric AI development and deployment that includes human oversight and diverse perspectives and accounts for societal values?

Individuals as workers, consumers, and citizens

How concerned should individuals be about the advent of generative AI? While companies can assess how the technology will affect their bottom lines, where can citizens turn for accurate, unbiased information about how it will affect their lives and livelihoods?

How can individuals as workers and consumers balance the conveniences generative AI delivers with its impact in their workplaces?

Can citizens have a voice in the decisions that will shape the deployment and integration of generative AI into the fabric of their lives?

Technological innovation can inspire equal parts awe and concern. When that innovation seems to materialize fully formed and becomes widespread seemingly overnight, both responses can be amplified. The arrival of generative AI in the fall of 2022 was the most recent example of this phenomenon, due to its unexpectedly rapid adoption as well as the ensuing scramble among companies and consumers to deploy, integrate, and play with it.

All of us are at the beginning of a journey to understand this technology's power, reach, and capabilities. If the past eight months are any guide, the next several years will take us on a roller-coaster ride featuring fast-paced innovation and technological breakthroughs that force us to recalibrate our understanding of AI's impact on our work and our lives. It is important to properly understand this phenomenon and anticipate its impact. Given the speed of generative AI's deployment so far, the need to accelerate digital transformation and reskill labor forces is great.

These tools have the potential to create enormous value for the global economy at a time when it is pondering the huge costs of adapting and mitigating climate change. At the same time, they also have the potential to be more destabilizing than previous generations of artificial intelligence. They are capable of that most human of abilities, language, which is a fundamental requirement of most work activities linked to expertise and knowledge as well as a skill that can be used to hurt feelings, create misunderstandings, obscure truth, and incite violence and even wars.

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The economic potential of generative AI: The next productivity frontier

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Generative AI's impact on productivity could add trillions of dollars in value to the global economy-and the era is just beginning.

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'I didn't give permission': Do AI's backers care about data law breaches?

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'I didn't give permission': Do AI's backers care about data law breaches?

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Cutting-edge artificial intelligence systems can help you escape a parking fine, write an academic essay, or fool you into believing Pope Francis is a fashionista. But the virtual libraries behind this breathtaking technology are vast – and there are concerns they are operating in breach of personal data and copyright laws.
The enormous datasets used to train the latest generation of these AI systems, like those behind ChatGPT and Stable Diffusion, are likely to contain billions of images scraped from the internet, millions of pirated ebooks, the entire proceedings of 16 years of the European parliament and the whole of English-language Wikipedia.
But the industry’s voracious appetite for big data is starting to cause problems, as regulators and courts around the world crack down on researchers hoovering up content without consent or notice. In response, AI labs are fighting to keep their datasets secret, or even daring regulators to push the issue.

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utting-edge artificial intelligence systems can help you escape a parking fine, write an academic essay, or fool you into believing Pope Francis is a fashionista. But the virtual libraries behind this breathtaking technology are vast - and there are concerns they are operating in breach of personal data and copyright laws.

The enormous datasets used to train the latest generation of these AI systems, like those behind ChatGPT and Stable Diffusion, are likely to contain billions of images scraped from the internet, millions of pirated ebooks, the entire proceedings of 16 years of the European parliament and the whole of English-language Wikipedia.

But the industry's voracious appetite for big data is starting to cause problems, as regulators and courts around the world crack down on researchers hoovering up content without consent or notice. In response, AI labs are fighting to keep their datasets secret, or even daring regulators to push the issue.

In Italy, ChatGPT has been banned from operating after the country's data protection regulator said there was no legal basis to justify the collection and "massive storage" of personal data in order to train the GPT AI. On Tuesday, the Canadian privacy commissioner followed suit with an investigation into the company in response to a complaint alleging "the collection, use and disclosure of personal information without consent".

Britain's data watchdog expressed its own concerns. "Data protection law still applies when the personal information that you're processing comes from publicly accessible sources," said Stephen Almond, the director of technology and innovation at the Information Commissioner's Office.

Michael Wooldridge, a professor of computer science at the University of Oxford, says "large language models" (LLMs), such as those that underpin OpenAI's ChatGPT and Google's Bard, hoover up colossal amounts of data.

"This includes the whole of the world wide web - everything. Every link is followed in every page, and every link in those pages is followed ... In that unimaginable amount of data there is probably a lot of data about you and me," he says, adding that comments about a person and their work could also be gathered by an LLM. "And it isn't stored in a big database somewhere - we can't look to see exactly what information it has on me. It is all buried away in enormous, opaque neural networks."

Wooldridge says copyright is a "coming storm" for AI companies. LLMs are likely to have accessed copyrighted material, such as news articles. Indeed the GPT-4-assisted chatbot attached to Microsoft's Bing search engine cites news sites in its answers. "I didn't give explicit permission for my works to be used as training data, but they almost certainly were, and now they contribute to what these models know," he says.

"Many artists are gravely concerned that their livelihoods are at risk from generative AI. Expect to see legal battles," he adds.

Lawsuits have emerged already, with the stock photo company Getty Images suing the British startup Stability AI - the company behind the AI image generator Stable Diffusion - after claiming that the image-generation firm violated copyright by using millions of unlicensed Getty Photos to train its system. In the US a group of artists is suing Midjourney and Stability AI in a lawsuit that claims the companies "violated the rights of millions of artists" in developing their products by using artists' work without their permission.

A sketch drawn by Kris Kashtanova that the artist fed into the AI program Stable Diffusion and transformed into the resulting image using text prompts. Photograph: Kris Kashtanova/Reuters

Awkwardly for Stability, Stable Diffusion will occasionally spit out pictures with a Getty Images watermark intact, examples of which the photography agency included in its lawsuit. In January, researchers at Google even managed to prompt the Stable Diffusion system to recreate near-perfectly one of the unlicensed images it had been trained on, a portrait of the US evangelist Anne Graham Lotz.

Copyright lawsuits and regulator actions against OpenAI are hampered by the company's absolute secrecy about its training data. In response to the Italian ban, Sam Altman, the chief executive of OpenAI, which developed ChatGPT, said: "We think we are following all privacy laws." But the company has refused to share any information about what data was used to train GPT-4, the latest version of the underlying technology that powers ChatGPT.

Even in its " technical report " describing the AI, the company curtly says only that it was trained "using both publicly available data (such as internet data) and data licensed from third-party providers". Further information is hidden, it says, due to "both the competitive landscape and the safety implications of large-scale models like GPT-4".

Others take the opposite view. EleutherAI describes itself as a "non-profit AI research lab", and was founded in 2020 with the goal of recreating GPT-3 and releasing it to the public. To that end, the group put together the Pile, an 825-gigabyte collection of datasets gathered from every corner of the internet. It includes 100GB of ebooks taken from the pirate site bibliotik, another 100GB of computer code scraped from Github, and a collection of 228GB of websites gathered from across the internet since 2008 - all, the group acknowledges, without the consent of the authors involved.

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Eleuther argues that the datasets in the Pile have all been so widely shared already that its compilation "does not constitute significantly increased harm". But the group does not take the legal risk of directly hosting the data, instead turning to a group of anonymous "data enthusiasts" called the Eye, whose copyright takedown policy is a video of a choir of clothed women pretending to masturbate their imaginary penises while singing.

Some of the information produced by chatbots has also been false. ChatGPT has falsely accused a US law professor, Jonathan Turley, of George Washington University, of sexually harassing one of his students - citing a news article that didn't exist. The Italian regulator had also referred to the fact that ChatGPT's responses do not "always match factual circumstances" and "inaccurate personal data are processed".

An annual report into progress in AI showed that commercial players were dominating the industry, over academic institutions and governments.

According to the 2023 AI Index report, compiled by California-based Stanford University, last year there were 32 significant industry-produced machine-learning models, compared with three produced by academia. Up until 2014, most of the significant models came from the academic sphere, but since then the cost of developing AI models, including staff and computing power, has risen.

"Across the board, large language and multimodal models are becoming larger and pricier," the report said. An early iteration of the LLM behind ChatGPT, known as GPT-2, had 1.5bn parameters, analogous to the neurons in a human brain, and cost an estimated $50,000 to train. By comparison, Google's PaLM had 540bn parameters and cost an estimated $8m.

This has raised concerns that corporate entities will take a less measured approach to risk than academic or government-backed projects. Last week a letter whose signatories included Elon Musk and the Apple co-founder Steve Wozniak called for an immediate pause in the creation of "giant AI experiments" for at least six months. The letter said there were concerns that tech firms were creating "ever more powerful digital minds" that no one could "understand, predict, or reliably control".

Dr Andrew Rogoyski, of the Institute for People-Centred AI at the University of Surrey, in England, said: "Big AI means that these AIs are being created purely by large profit-driven corporates, which unfortunately means that our interests as human beings aren't necessarily well represented.

He added: "We have to focus our efforts on making AI smaller, more efficient, requiring less data, less electricity, so that we can democratise access to AI."

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'I didn't give permission': Do AI's backers care about data law breaches?

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utting-edge artificial intelligence systems can help you escape a parking fine, write an academic essay, or fool you into believing Pope Francis is a fashionista. But the virtual libraries behind this breathtaking technology are vast - and there are concerns they are operating in breach of personal data and copyright laws.

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DESPITE THE WILD success of ChatGPT and other large language models, the artificial neural networks (ANNs) that underpin these systems might be on the wrong track.

For one, ANNs are “super power-hungry,” said Cornelia Fermüller, a computer scientist at the University of Maryland. “And the other issue is [their] lack of transparency.” Such systems are so complicated that no one truly understands what they’re doing, or why they work so well. This, in turn, makes it almost impossible to get them to reason by analogy, which is what humans do—using symbols for objects, ideas, and the relationships between them.

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By imbuing enormous vectors with semantic meaning, scientists can get machines to reason more abstractly-and efficiently-than before.

Despite the wild success of ChatGPT and other large language models, the artificial neural networks (ANNs) that underpin these systems might be on the wrong track.

For one, ANNs are "super power-hungry," said Cornelia Fermüller, a computer scientist at the University of Maryland. "And the other issue is [their] lack of transparency." Such systems are so complicated that no one truly understands what they're doing, or why they work so well. This, in turn, makes it almost impossible to get them to reason by analogy, which is what humans do-using symbols for objects, ideas, and the relationships between them.

Such shortcomings likely stem from the current structure of ANNs and their building blocks: individual artificial neurons. Each neuron receives inputs, performs computations, and produces outputs. Modern ANNs are elaborate networks of these computational units, trained to do specific tasks.

Yet the limitations of ANNs have long been obvious. Consider, for example, an ANN that tells circles and squares apart. One way to do it is to have two neurons in its output layer, one that indicates a circle and one that indicates a square. If you want your ANN to also discern the shape's color-say, blue or red-you'll need four output neurons: one each for blue circle, blue square, red circle, and red square. More features mean even more neurons.

This can't be how our brains perceive the natural world, with all its variations. "You have to propose that, well, you have a neuron for all combinations," said Bruno Olshausen, a neuroscientist at the University of California, Berkeley. "So, you'd have in your brain, [say,] a purple Volkswagen detector."

Instead, Olshausen and others argue that information in the brain is represented by the activity of numerous neurons. So the perception of a purple Volkswagen is not encoded as a single neuron's actions, but as those of thousands of neurons. The same set of neurons, firing differently, could represent an entirely different concept (a pink Cadillac, perhaps).

This is the starting point for a radically different approach to computation, known as hyperdimensional computing. The key is that each piece of information, such as the notion of a car or its make, model, or color, or all of it together, is represented as a single entity: a hyperdimensional vector.

A vector is simply an ordered array of numbers. A 3D vector, for example, comprises three numbers: the x, y, and z coordinates of a point in 3D space. A hyperdimensional vector, or hypervector, could be an array of 10,000 numbers, say, representing a point in 10,000-dimensional space. These mathematical objects and the algebra to manipulate them are flexible and powerful enough to take modern computing beyond some of its current limitations and to foster a new approach to artificial intelligence.

"This is the thing that I've been most excited about, practically in my entire career," Olshausen said. To him and many others, hyperdimensional computing promises a new world in which computing is efficient and robust and machine-made decisions are entirely transparent.

Enter High-Dimensional Spaces

To understand how hypervectors make computing possible, let's return to images with red circles and blue squares. First, we need vectors to represent the variables SHAPE and COLOR. Then we also need vectors for the values that can be assigned to the variables: CIRCLE, SQUARE, BLUE, and RED.

The vectors must be distinct. This distinctness can be quantified by a property called orthogonality, which means to be at right angles. In 3D space, there are three vectors that are orthogonal to each other: one in the x direction, another in the y, and a third in the z. In 10,000-dimensional space, there are 10,000 such mutually orthogonal vectors.

But if we allow vectors to be nearly orthogonal, the number of such distinct vectors in a high-dimensional space explodes. In a 10,000-dimensional space, there are millions of nearly orthogonal vectors.

Now let's create distinct vectors to represent SHAPE, COLOR, CIRCLE, SQUARE, BLUE, and RED. Because there are so many possible nearly orthogonal vectors in a high-dimensional space, you can just assign six random vectors to represent the six items; they're almost guaranteed to be nearly orthogonal. "The ease of making nearly orthogonal vectors is a major reason for using hyperdimensional representation," wrote Pentti Kanerva, a researcher at the Redwood Center for Theoretical Neuroscience at the University of California, Berkeley, in an influential 2009 paper.

The paper built upon work done in the mid-1990s by Kanerva and Tony Plate, at the time a doctoral student with Geoff Hinton at the University of Toronto. The two independently developed the algebra for manipulating hypervectors and hinted at its usefulness for high-dimensional computing.

Given our hypervectors for shapes and colors, the system developed by Kanerva and Plate shows us how to manipulate them using certain mathematical operations. Those actions correspond to ways of symbolically manipulating concepts.

The first operation is multiplication. This is a way of combining ideas. For example, multiplying the vector SHAPE with the vector CIRCLE binds the two into a representation of the idea "SHAPE is CIRCLE." This new "bound" vector is nearly orthogonal to both SHAPE and CIRCLE. And the individual components are recoverable-an important feature if you want to extract information from bound vectors. Given a bound vector that represents your Volkswagen, you can unbind and retrieve the vector for its color: PURPLE.

The second operation, addition, creates a new vector that represents what's called a superposition of concepts. For example, you can take two bound vectors, "SHAPE is CIRCLE" and "COLOR is RED," and add them together to create a vector that represents a circular shape that is red in color. Again, the superposed vector can be decomposed into its constituents.

The third operation is permutation; it involves rearranging the individual elements of the vectors. For example, if you have a three-dimensional vector with values labeled x, y, and z, permutation might move the value of x to y, y to z, and z to x. "Permutation allows you to build structure," Kanerva said. "It allows you to deal with sequences, things that happen one after another." Consider two events, represented by the hypervectors A and B. We can superpose them into one vector, but that would destroy information about the order of events. Combining addition with permutation preserves the order; the events can be retrieved in order by reversing the operations.

Together, these three operations proved enough to create a formal algebra of hypervectors that allowed for symbolic reasoning. But many researchers were slow to grasp the potential of hyperdimensional computing, including Olshausen. "It just didn't sink in," he said.

In 2015, a student of Olshausen's named Eric Weiss demonstrated one aspect of hyperdimensional computing's unique abilities. Weiss figured out how to represent a complex image as a single hyperdimensional vector that contains information about all the objects in the image, including their properties, such as colors, positions, and sizes.

"I practically fell out of my chair," Olshausen said. "All of a sudden, the light bulb went on."

Soon more teams began developing hyperdimensional algorithms to replicate simple tasks that deep neural networks had begun tackling about two decades before, such as classifying images.

Consider an annotated data set that consists of images of handwritten digits. An algorithm analyzes the features of each image using some predetermined scheme. It then creates a hypervector for each image. Next, the algorithm adds the hypervectors for all images of zero to create a hypervector for the idea of zero. It then does the same for all digits, creating 10 "class" hypervectors, one for each digit.

Now the algorithm is given an unlabeled image. It creates a hypervector for this new image, then compares the hypervector against the stored class hypervectors. This comparison determines the digit that the new image is most similar to.

Yet this is just the beginning. The strengths of hyperdimensional computing lie in the ability to compose and decompose hypervectors for reasoning. The latest demonstration of this came in March, when Abbas Rahimi and colleagues at IBM Research in Zurich used hyperdimensional computing with neural networks to solve a classic problem in abstract visual reasoning-a significant challenge for typical ANNs, and even some humans. Known as Raven's progressive matrices, the problem presents images of geometric objects in, say, a 3-by-3 grid. One position in the grid is blank. The subject must choose, from a set of candidate images, the image that best fits the blank.

"We said, 'This is really ... the killer example for visual abstract reasoning, let's jump in,'" Rahimi said.

To solve the problem using hyperdimensional computing, the team first created a dictionary of hypervectors to represent the objects in each image; each hypervector in the dictionary represents an object and some combination of its attributes. The team then trained a neural network to examine an image and generate a bipolar hypervector-an element can be +1 or −1-that's as close as possible to some superposition of hypervectors in the dictionary; the generated hypervector thus contains information about all the objects and their attributes in the image. "You guide the neural network to a meaningful conceptual space," Rahimi said.

Once the network has generated hypervectors for each of the context images and for each candidate for the blank slot, another algorithm analyzes the hypervectors to create probability distributions for the number of objects in each image, their size, and other characteristics. These probability distributions, which speak to the likely characteristics of both the context and candidate images, can be transformed into hypervectors, allowing the use of algebra to predict the most likely candidate image to fill the vacant slot.

Their approach was nearly 88 percent accurate on one set of problems, whereas neural network-only solutions were less than 61 percent accurate. The team also showed that, for 3-by-3 grids, their system was almost 250 times faster than a traditional method that uses rules of symbolic logic to reason, since that method must search through an enormous rulebook to determine the correct next step.

Not only does hyperdimensional computing give us the power to solve problems symbolically, it also addresses some niggling issues of traditional computing. The performance of today's computers degrades rapidly if errors caused by, say, a random bit flip (a 0 becomes 1 or vice versa) cannot be corrected by built-in error-correcting mechanisms. Moreover, these error-correcting mechanisms can impose a penalty on performance of up to 25 percent, said Xun Jiao, a computer scientist at Villanova University.

Hyperdimensional computing tolerates errors better, because even if a hypervector suffers significant numbers of random bit flips, it is still close to the original vector. This implies that any reasoning using these vectors is not meaningfully impacted in the face of errors. Jiao's team has shown that these systems are at least 10 times more tolerant of hardware faults than traditional ANNs, which themselves are orders of magnitude more resilient than traditional computing architectures. "We can leverage all [that] resilience to design some efficient hardware," Jiao said.

Another advantage of hyperdimensional computing is transparency: The algebra clearly tells you why the system chose the answer it did. The same is not true for traditional neural networks. Olshausen, Rahimi, and others are developing hybrid systems in which neural networks map things in the physical world to hypervectors, and then hyperdimensional algebra takes over. "Things like analogical reasoning just fall in your lap," Olshausen said. "This is what we should expect of any AI system. We should be able to understand it just like we understand an airplane or a television set."

All of these benefits over traditional computing suggest that hyperdimensional computing is well suited for a new generation of extremely sturdy, low-power hardware. It's also compatible with "in-memory computing systems," which perform the computing on the same hardware that stores data (unlike existing von Neumann computers that inefficiently shuttle data between memory and the central processing unit). Some of these new devices can be analog, operating at very low voltages, making them energy-efficient but also prone to random noise. For von Neumann computing, this randomness is "the wall that you can't go beyond," Olshausen said. But with hyperdimensional computing, "you can just punch through it."

Despite such advantages, hyperdimensional computing is still in its infancy. "There's real potential here," Fermüller said. But she points out that it still needs to be tested against real-world problems and at bigger scales, closer to the size of modern neural networks.

"For problems at scale, this needs very efficient hardware," Rahimi said. "For example, how [do you] efficiently search over 1 billion items?"

All of this should come with time, Kanerva said. "There are other secrets high-dimensional spaces hold," he said. "I see this as the very beginning of time for computing with vectors."

Original story reprinted with permission from Quanta Magazine, an editorially independent publication of the Simons Foundation whose mission is to enhance public understanding of science by covering research developments and trends in mathematics and the physical and life sciences.

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By imbuing enormous vectors with semantic meaning, scientists can get machines to reason more abstractly-and efficiently-than before.

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Advancing American Leadership in Quantum Technology

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Advancing American Leadership in Quantum Technology

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House Science, Space, and Technology Committee

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Advancing American Leadership in Quantum Technology

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Hearing Entitled: Dollar Dominance: Preserving the U.S. Dollar’s Status as the Global Reserve ...

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Hearing Entitled: Dollar Dominance: Preserving the U.S. Dollar’s Status as the Global Reserve ...

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Hearing Entitled: Dollar Dominance: Preserving the U.S. Dollar’s Status as the Global Reserve ...

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The Cyber Security Hub™ posted on LinkedIn

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The Cyber Security Hub™ posted on LinkedIn

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The Cyber Security Hub™ posted on LinkedIn

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The Cyber Security Hub™ posted a video on LinkedIn