TEG Working Group News Roundup September 23

In this week’s edition, the Commerce Department has finalized rules for CHIPS Act funding, restricting semiconductor manufacturing in certain countries. The FTC sues Amazon for alleged monopoly practices, and the crypto industry faces the need for evolving regulations. San Francisco’s economy struggles, and misinformation researchers face legal attacks.

Industrial Policy & International Security

Commerce Department finalizes rule on national security ‘guardrails’ for CHIPS funding | ABC News

The Commerce Department has established rules for the CHIPS and Science Act funding recipients, specifying that companies cannot expand advanced semiconductor manufacturing in “countries of concern” for 10 years from the award date. Similar restrictions were also placed on award recipients who produce less advanced chips that have military applications in countries of concern. Violators may lose federal funding. The CHIPS Act has garnered a significant amount of attention from companies: according to a Department of Commerce official, over 500 statements of interest have been received, and over 100 full applications and pre-applications have been filed.

What Ukraine Needs to Win the War Against Russia | Council on Foreign Relations

The Ukrainian counteroffensive against Russian forces has made progress, retaking approximately 50% of the territory seized since the 2022 invasion. In the Zaporizhzhia province, Ukrainian troops penetrated the first Russian defensive line. However, Ukrainian forces are unable to sever the land-bridge between Crimea and Russian-occupied eastern Ukraine. To achieve a more successful counteroffensive, Ukraine needs more Western weapons and training. The West should expedite weapons deliveries and expand training efforts. The cautious approach to providing Ukraine with more sophisticated weapons should be relaxed, as Ukraine has proven its ability to use Western weapons effectively, and Putin has shown restraint in response to Ukrainian attacks.

US Regulation

U.S. Accuses Amazon of Illegally Protecting Monopoly in Online Retail | New York Times


The Federal Trade Commission (FTC) and 17 states have filed a lawsuit against Amazon, alleging the company has maintained a monopoly in online retail, harming consumers through artificially higher prices and a poorer shopping experience. The lawsuit argues that Amazon punishes merchants for selling on other platforms, forcing them to use Amazon’s fulfillment and delivery services. While the lawsuit does not explore how the courts could reduce Amazon’s power, if the FTC is able to prove that the company broke the law then more specific recommendations may be issued.

OpenAI CEO says its possible to get regulation wrong, but should not fear it | Reuters

OpenAI’s CEO, Sam Altman, emphasized the importance of AI regulation while visiting Taipei this week. He noted the need to avoid both over-regulation and under-regulation in the AI industry, stating that only the most powerful AI systems, such as those significantly more advanced than GPT-4, should be subject to regulation. Altman acknowledged the tech industry’s tendency to resist regulation but highlighted that regulation has been beneficial in ensuring safety, drawing a parallel with aviation safety. He stressed that while regulation could be imperfect, some form of it is crucial in the AI field amid global concerns about rapid technological advancements.

Innovation

Nato’s €1bn venture fund offers defence start-ups an alternative to China | Financial Times

A Nato-backed €1bn venture capital fund, launched last year, aims to bolster defense startups, fortifying the US-led military alliance’s technological advantage and countering Chinese competition. The fund, based in the Netherlands, targets areas like AI, space, and biotech, with restrictions on investments in weapons. Twenty-three members, including Sweden, have joined the fund, but the US, with the largest defense budget, is currently not participating. The fund seeks to attract startups by offering early investments and emphasizing technology deployment across the alliance, but it refrains from supporting offensive weapon producers. The fund aligns with increasing VC interest in defense tech due to the Ukraine conflict.

The Allure Of Defense Contracting: Why Tech Startups Are Looking To The DoD | Los Angeles Times

More technology companies are pursuing partnerships with the Department of Defense. This is largely driven by three factors. Firstly, the Pentagon is placing an emphasis on procuring connected autonomous platforms, which smaller tech companies are able to build. Second, startups have expertise in the emerging technologies that the military is planning to integrate. Third, a change in procurement policy by adopting open standards allows smaller companies to have enough flexibility with their designs to put together bids.

Could ‘algorithmic destruction’ solve AI’s copyright issues? | San Francisco Chronicle

The concept of “algorithmic destruction” is being considered as a potential remedy for AI models that infringe copyrighted material. This approach involves deleting the AI model and then rebuilding it from scratch using only fair-use text, images, and data. This extreme measure is being discussed in response to lawsuits against OpenAI and Meta, where creatives allege that their copyrighted work was used without permission to train AI models. While it is a drastic solution, it raises questions about whether AI can truly “unlearn” and how to prevent AI models from accessing copyrighted content.

Cyber

Welcome to Cyber Realism: Parsing The 2023 Department of Defense Cyber Strategy | War on the Rocks

The recently released Department of Defense’s 2023 Cyber Strategy takes a more pragmatic and realistic approach compared to its predecessors by seeking to rationalize and contextualize existing concepts. Notably, it emphasizes “integrated deterrence,” recognizing that cyber capabilities are most effective when combined with other national power instruments. The strategy also reaffirms the concepts of “defending forward” and “persistent engagement” under the new label “campaigning.” Additionally, it acknowledges the limits of military cyber operations in civilian cybersecurity.

Leading Egyptian opposition politician targeted with spyware, researchers find | The Hill

Former Egyptian lawmaker and current candidate for the nation’s presidency Ahmed Altantawy was attacked with spyware believed to be linked to Egyptian authorities. Researchers at Citizen Lab and Google’s Threat Analysis Group found that Altantawy’s phone was targeted with malware that could infect smartphones automatically if certain websites were visited. Additionally, attempts were made to hack his phone via SMS and WhatsApp messages. This revelation led Apple to release operating system updates to patch vulnerabilities.

State & Local Tech Ecosystems

When will San Francisco’s economy hit bottom? Here’s what experts say | San Francisco Chronicle

San Francisco continues to struggle economically almost four years after the pandemic began. The “doom loop” scenario of declining tax revenue and out-migration remains a concern. About one-third of office space is listed for lease or sublease, a record high. The city’s mammoth $14.6 billion budget faces a potential annual deficit of $1 billion within a few years, primarily due to remote work’s impact on office property taxes. In spite of this, many remain optimistic about the long term prospects for San Francisco.

Democracy Online

Misinformation research is buckling under GOP legal attacks | Washington Post

University and government funded research programs studying the spread of misinformation are faltering in response to the legal challenges posed to them by conservative lawmakers who accuse them of conspiring with technology companies to silence right-wing voices on social media. Targets of this campaign are forced to pay expensive attorneys fees if they want to contend with the legal probes. Alex Stamos of Stanford’s Election Integrity Partnership noted that the bill for their legal defense was “approaching seven figure[s].”

X/Twitter scraps feature letting users report misleading information | Reuters

X (formerly Twitter) has removed the ability for users in some markets to report tweets containing misleading information. This raises concerns about electoral integrity, as the timing of the move coincides with an Australian referendum on whether or not there should be a dedicated advisory body to their government on Indigenous issues. The event underscores the potential misinformation consequences of the site’s shift towards looser censorship policies.