In this edition, China’s potential economic recovery could help the US, Germany refuses to send tanks to Ukraine, big tech companies team up to prevent the narrowing of Section 230, Boston Dynamics showcases its bipedal robot in the workplace, and the data of thirty-seven million T-Mobile users is leaked. Additionally, cyber attacks have tripled in Ukraine this year, tech layoffs could be a leading indicator of wider job loss, the head of a Russian militia calls for the ban of Youtube, and an increase in climate change denial is seen online.
Industrial Policy & International Security
China’s economy could recover sooner than anticipated as the country reopens and recovers from strict pandemic restrictions. Economists believe this could benefit the US economy amidst fears of a recession by reducing pressure on US supply chains and sustaining demand. However, the Chinese economy still faces some obstacles: population decline, refusal to approve higher efficacy COVID-19 vaccinations from Western countries, and an ongoing real estate crisis. US experts believe a weak Chinese economy could interfere with supply chains and raise inflation in the West. Federal Reserve Chair Jerome Powell explained that COVID’s suppression of economic activity in China is felt on a global scale because of the country’s critical manufacturing role. But stronger-than-expected annual and quarterly economic growth rates at the end of 2022 offer hope for a recovery in 2023.
Berlin Won’t Allow Exports of German Tanks to Ukraine Unless US Sends Its Own | Wall Street Journal
NATO allies are ready to send German-made Leopard tanks to Ukraine but Berlin is withholding approval unless the US agrees to send its Abrams tanks. According to the International Institute for Strategic Studies, the Leopard is among the most sophisticated tanks in the world and NATO allies have over 2,000 of them. But Germany, like many exporters of military equipment, doesn’t differentiate between direct exports and exports by third countries. The Pentagon is not ready to send the Abrams tank to Ukraine because it is harder to train on, maintain, and repair and is therefore less useful compared to the more accessible Leopard. The export of tanks would mark an escalation in Western support to Ukraine and Berlin believes that sending Leopard tanks to Ukraine could bring Germany into direct confrontation with Russia. As Western allies remain gridlocked, NATO Secretary General Jens Stoltenberg asserted the need for NATO allies to provide more heavy weapons to Ukraine. US Secretary of Defense Lloyd Austin is traveling to Berlin to discuss the matter further.
The Supreme Court is hearing a case alleging that YouTube provided a platform for terrorist content and recommended videos that incited violence and facilitated Islamic State recruitment. Their ruling could impact the scope of Section 230 protections that shield internet companies from legal liability for third-party content. The case may call into question whether Section 230 protections apply to algorithm-recommended content. Meta, Twitter, and several tech associations filed briefs warning that narrowing the scope of protections could make internet companies less useful and less safe. The tech companies argued that, in the context of Section 230, the act of recommending content is not meaningfully distinct from other methods of organizing how content is displayed. Moreover, personalization is central to their users’ experience. At the same time, the Justice Department warned the Court against applying an “overly broad” interpretation of the law. Tech companies prefer that any changes to Section 230 come from Congress.
Boston Dynamics, a subsidiary of Hyundai, released a video of its prototype bipedal robot, Atlas, working in a fake construction site, tossing planks and tool bags. This workplace demonstration is a departure from previous messaging about Atlas, which showcased the robot’s agility. Boston Dynamics is starting to “think about how the robot should be able to perceive and manipulate objects in its environment.” The company’s two other robots include Stretch, a wheeled machine designed to work in warehouses, and Spot, a four-legged robot built for surveillance and inspections. Bipedal, bimanual robots are expected to eventually be able to replicate human labor and operate in spaces designed for humans but Atlas control lead Ben Stephens says this is still a “long way off.” Boston Dynamics has not announced if or when it plans to start selling Atlas alongside Stretch and Spot.
On January 5th, T-Mobile detected a breach used to access personal data—including names, billing addresses, emails, phone numbers, dates of birth, etc.—belonging to 37 million customers. In a financial filing, the company revealed that the hacker began gathering customers’ data on November 25. The hacker exploited an application programming interface but did not compromise any company systems or network. Once the breach was detected, T-Mobile fixed the problem within a day. In the past five years, T-Mobile has been hacked eight times including this incident. In 2022, hacking group Lapsus$ compromised T-Mobile’s internal tools to take over victims’ phone numbers in order to access sensitive accounts. The company has 110 million customers in the US.
Ukraine’s cybersecurity agency, SSSCIP, released an analysis of Russia’s cyberstrategy during the war. The agency found that attacks on Ukraine have tripled over the past year and there is a link between cyberattacks and bombing campaigns. For example, in the November attacks against Ukraine’s energy infrastructure, Russia launched cyberattacks to cause blackouts in tandem with missile strikes against energy facilities. Coordinated information operations also aimed to shift blame for power outages to Ukrainian authorities. With substantial support from Western countries, Ukraine has had some success in containing Russian and pro-Russian hacking. British cyber security officials noted there has been no increase in Russian cyber attacks targeted at the West, although Britain continues to believe its agencies remain significantly threatened by Russian cyber attacks.
State & Local Tech Ecosystems
Consulting firm Challenger, Gray & Christmas Inc. reports that US employers cut jobs by 13 percent more in 2022 compared to 2021, while the tech sector increased its announced job cuts by a staggering 649 percent. Analysts attribute the largest layoffs since the dot-com crash to a poor understanding of the post-COVID economy. Many executives did not expect to face stubborn inflation combined with rising interest rates and reduced investment and funding for startups. Human resources and recruiting departments are bearing the brunt of layoffs while some companies are continuing to hire engineers and product managers. Yet, 80 percent of laid-off employees are able to land a new job in less than three months according to a ZipRecruiter survey. But job seekers are looking for more secure sign-on offers, preferring cash over stock options. Because the tech sector is more deeply integrated with the larger economy, workers are less affected than previous industry collapses during the 1990s and early 2000s.
The head of the Russian private military group Wagner, Yevgeny Prigozhin, criticized the Kremlin administration for failing to block YouTube. In a statement posted on his Telegram channel, Prigozhin alleged that 40 percent of the videos on the platform were "politicized and directed against Russia." Prigozhin, nicknamed “Putin’s chef” for carrying out President Vladmir Putin’s military contracts, had been previously disturbed by the lack of credit given to Wagner by the Kremlin for their military accomplishments in Ukraine. Although Russia has banned many foreign social media platforms such as Facebook and Instagram since the invasion of Ukraine, Youtube still has over 90 million users in Russia and is a dominant digital media platform with no competitive domestic alternatives. Prigozhin claimed Youtube has not been banned in Russia because it is seen as indispensable for citizens and, primarily, the opposition groups of Putin's administration. He went as far to say that those who are against the ban of Youtube in Russia are traitors to their people, country, and future generations.
According to a new report by the Climate Action Against Disinformation coalition, fossil fuel-linked entities spent about $4 million on Facebook and Instagram ads that disparaged the transition to clean energy at the time of the United Nations’ climate change conference in November. While fossil fuel industry delegates attended the UN climate conference in Cairo companies increased their online and social media ads. For example, Energy Citizens, a front group for the American Petroleum Institute, increased their ads challenging the impact of clean energy on energy security during the lead up to the conference. Additionally, researchers found that Meta made millions last year from advertising that ‘greenwashes’ fossil fuel companies and spreads disinformation about climate change. Notably, the report found that climate denialism exploded on Twitter in 2022, stating that this is "a stark comeback for climate denial" and "negligence from Big Tech companies who not only continue to monetize and enable, but in some cases actively recommend, such content to users."