TEG Working Group News Roundup November 6

In this week’s edition, the Pentagon unveils a new data and AI strategy following President Biden’s executive order, emphasizing the adoption of advanced AI technologies. Meanwhile, the United States, South Korea, and Japan form a group to counter North Korean cyber threats. Additionally, the US Air Force’s first T-7A Red Hawk lands for testing, marking progress in a major Boeing contract, the world’s largest bank, ICBC, resorts to using a USB stick for transactions following a cyberattack and, misinformation around Hamas’ crypto financing leads to policy debates in Congress.

Industrial Policy & International Security

Pentagon debuts data and AI strategy after Biden’s executive order | DefenseNews

The US Department of Defense has released an updated strategy on data analytics and artificial intelligence, building on its 2018 blueprint. The strategy, outlined by Chief Digital and AI Officer Craig Martell, aims to accelerate the adoption of advanced AI technologies for better decision-making in the department. The Pentagon is focusing on improved data sets, infrastructure, external partnerships, and overcoming internal barriers to technology adoption. Controversially, the use of generative AI includes cybersecurity concerns. Deputy Secretary of Defense Kathleen Hicks emphasized human responsibility in the use of force, with directive 3000.09 governing the development of autonomous weapons. The Pentagon, already involved in over 685 AI ventures, has requested $1.4 billion for AI in fiscal 2024, with the Army leading in AI projects among military branches.

US, South Korea, Japan to launch consultative group on North’s cyber threats | Reuters 

The United States, South Korea, and Japan have agreed to form a high-level consultative group to counter North Korean cyber activities, which are believed to finance its unlawful weapons programs. Anne Neuberger, the US Deputy National Security Adviser for Cyber and Emerging Technologies, discussed the initiative with her counterparts from South Korea and Japan in Washington. They plan to hold quarterly meetings under this new framework. This group aims to enhance the three countries’ capabilities to respond to global cyber threats, including North Korea’s use of cyber activities to fund its nuclear and Weapons of Mass Destruction (WMD) programs. This decision follows an agreement at the August summit at Camp David to establish a working group focused on North Korean cyber threats. UN reports indicate that North Korea has intensified its cryptocurrency theft, using advanced techniques to fund its nuclear and missile programs. North Korea, however, denies these hacking allegations.

US Regulation

Big Tech Wants AI regulation. The rest of Silicon Valley is skeptical | The Washington Post

Government officials and Big Tech leaders have reached consensus on the need for ground rules in artificial intelligence (AI) after high-level meetings. However, a growing faction in Silicon Valley, including venture capitalists and open-source advocates, opposes AI regulation, fearing it could stifle competition. Critics, like Y Combinator’s Garry Tan, argue that smaller companies’ voices are neglected in ongoing discussions. The recent executive order by President Biden, outlining plans for AI testing and approval guidelines, has intensified concerns among dissenters, who view it as an attempt by tech giants to secure their dominance.

FTC Chair Lina Khan looks for allies and leads in Silicon Valley charm offensive | Reuters

Federal Trade Commission Chair Lina Khan sought to shift her reputation as a Big Tech antagonist during a two-day visit to Silicon Valley last week. Emphasizing her support for entrepreneurs and founders, Khan engaged with the tech community, acknowledging concerns about AI technology control by a few companies. Her outreach reflects a change in strategy, moving from a low-key New York attempt to more prominent engagement. Despite the FTC’s hard line on unlawful mergers, Khan aimed to be perceived as a friend to industry workers, emphasizing alignment with the goals of innovators and entrepreneurs, countering Big Tech’s reservations about her.

Innovation

First T-7 trainer lands at at Edwards Air Force Base for test flights | DefenseNews 

The US Air Force’s first T-7A Red Hawk trainer aircraft landed at Edwards Air Force Base in California for intensive flight testing, after a 1,400-mile journey from Boeing’s facility in St. Louis, Missouri. It made stops at various Air Force bases for refueling and rest. The upcoming tests at Edwards will assess the T-7’s aerodynamics and load capacity. The Air Force expects two more Red Hawks for further testing. This first delivery is part of a $9.2 billion contract with Boeing for 351 T-7s, aimed at replacing the aging T-38 fleet. The T-7 program has faced delays but aims for initial operational capability by spring 2027.

Cyber 

Cyber attack forces world’s biggest bank to trade via USB stick | TIME 

The US unit of Industrial & Commercial Bank of China Ltd. (ICBC), the world’s largest bank, experienced a cyberattack by the suspected Russian-linked criminal gang Lockbit. The attack disrupted the bank’s ability to clear US Treasury trades, forcing it to physically transport settlement details via a USB stick. This event highlights the growing threat of cyberattacks in the financial sector. The attack on ICBC, which has been enhancing its cybersecurity, spotlights the vulnerability of global financial systems to such disruptions. This incident comes as the financial industry grapples with increased ransomware attacks, with Chainalysis recording about $500 million in ransomware payments through September, a 50% increase from the previous year. The attack underscores the importance of proposals like the US Securities and Exchange Commission’s mandate for central clearing of US Treasuries to mitigate systemic risks in the financial market.

Democracy Online

Lawmakers Renew Calls to Ban TikTok After Accusations of Anti-Israel Content | The New York Times

TikTok is facing renewed calls for a ban from Republican lawmakers who accuse the platform of amplifying pro-Palestinian and anti-Israel content through its algorithm. Senator Josh Hawley of Missouri urged the Biden administration to outlaw TikTok, citing its “ubiquity” in spreading anti-Israel content, while Representative Mike Gallagher of Wisconsin claimed the app was “brainwashing” American youth. TikTok, owned by ByteDance, has refuted claims of privacy and security risks and argued against disproportionate promotion of pro-Palestinian content. The platform has over 100 million users in the U.S. and has been under scrutiny for its Chinese ownership.

How misinformation on Hamas and crypto fooled nearly 20% of Congress | Forbes 

Senator Elizabeth Warren and 104 congressional colleagues raised concerns about cryptocurrency’s role in financing terrorism, citing a report that Hamas raised over $130 million in crypto. This claim, based on a Wall Street Journal article citing Elliptic, a blockchain analytics firm, was later disputed by Elliptic itself. They clarified that there’s no evidence to support such high fundraising amounts through crypto for Hamas. Another firm, Chainalysis, also indicated the $130 million figure likely represents the total volume of crypto transactions linked to Hamas, not the actual amount raised. Despite these firms’ interest in highlighting crypto’s link to illicit activities, they agreed that its role in terrorist financing is overstated. The incident highlights the risk of misinformation shaping policy, as seen in Senator Warren’s use of this statistic to support anti-money laundering legislation. On the other hand, Senator Cynthia Lummis emphasized that crypto’s role in illicit finance is minor, arguing for informed policymaking without stifling the industry. This case underscores the importance of accurate data in legislative discussions about cryptocurrency’s role in financing terrorism.

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January 26 2024