In this edition, Oil sanctions are costing Russia millions per day, Putin replaces Russia’s leader of the war in Ukraine, North American countries meet to strengthen economic ties, and Congress is criticized for its lack of tech regulation. Additionally, industrial policy may play a greater role in US innovation, ChatGPT may enable malicious actors, office vacancy increases in major US cities, and the House approves the Select Subcommittee on the Weaponization of the Federal Government.
Industrial Policy & International Security
European Oil Sanction Costing Russian $172 million per day, report says | The Hill
According to a new report by the Centre for Research on Energy and Clean Air, the European Union’s price cap and ban on Russian crude oil is costing the country roughly $172 million per day. On February 5th, the EU’s sanctions will expand to include other refined petroleum products and could bring Russia’s daily losses to $300 million. The EU’s measures, in combination with joint Group of Seven price caps limiting Russia’s sales to $60 per barrel and Germany’s stoppage of imports, resulted in a 17 percent decline in Russia’s December earnings. A reduction in crude oil exports and selling prices contributed to decreased revenue, which is at the lowest level since the beginning of the invasion of Ukraine. Report authors claim the impact of current sanctions is evident and as significant as expected but urge Western countries to continue increasing economic pressure on Russia.
Russia names new commander of Ukraine invasion | Axios
On Wednesday, the Russian Ministry of Defense announced that Valery Gerasimov, head of the general staff of the Russian Armed Forces, will take command over the invasion of Ukraine. He replaces General Sergei Surovikin, who has served in the role for a short three months. Surovikin was appointed to reverse some of the setbacks suffered by Russian forces but they continued under his leadership, including the recent withdrawal from Kherson. The ministry hopes Gerasimov will improve coordination between military branches as well as command and control. The change in leadership could indicate a battle for power within the Kremlin. Notably, ultra-nationalist communities support Surovikin and blame Gerasimov for failures in Ukraine. US officials also believe that the Russian mercenary group known as the Wagner Group (which is fighting in Bakhmut) is locked in a power struggle with the Russian military for influence with the Kremlin.
North America vows to strengthen economic ties, Mexico energy row rumbles on | Reuters
US President Joe Biden, Mexican President Andres Manuel Lopez Obrador, and Canadian Prime Minister Justin Trudeau met in Mexico City on Tuesday to discuss energy, migration, economic, and drug policies. The leaders vowed to tighten economic ties in North America by improving regional supply chains, boosting semiconductor output, reducing carbon emissions, and tackling inflation. Lopez Obrador also promised Biden that Mexico would assist the US in cracking down on the fentanyl trade, responsible for thousands of deaths in the US. While the White House promised to establish more immigration pathways, Lopez Obrador pushed for the US to normalize Mexican migration into the US. Additionally, the US said that a committee dedicated to increasing investment in the semiconductor industry in North America would be established in early 2023. President Biden will visit Canada in March.
US regulatory on the tech sector may come too late - or not at all | Financial Times
Marietje Schaake, international policy director at Stanford University’s Cyber Policy Center, criticizes US legislators’ inability to establish firm regulations around big tech, crypto, and AI in 2022. Tech companies spent over $100 million lobbying Congress over the past two years and deterred proposed bills strengthening antitrust regulation, data protection, and child protections online. Such bills either failed to receive a majority vote or weren’t brought to a vote. Given wider than ever political divides, Schaake does not expect the 118th Congress will make any more progress regulating tech than its predecessor. However, US companies must comply with more advanced EU regulations including the Digital Services Act and Digital Markets Act, which clarify antitrust guidelines and create new content moderation frameworks for social media. This year, the EU is also expected to finalize their AI Act that takes a risk-based approach to regulation by evaluating and restricting potentially harmful applications of the technology. Overall, Schaake believes the political agreement in Europe has allowed the EU to outperform the US in tech regulation, and that the lack of oversight in the US over areas like cryptocurrency, social media, and AI is a mistake.
2022’s seismic shift in US tech policy will change how we innovate | MIT Tech Review
Author David Rotman claims the recent legislation passed by the US government, which allocated hundreds of billions of dollars in federal investments to transform the nation’s technology landscape, will change the way we think about the government’s role in driving innovation. The legislation includes $550 billion in new spending over the next five years in the Infrastructure Investment and Jobs Act, $280 billion in the CHIPS and Science Act, and another roughly $390 billion for clean energy in the Inflation Reduction Act. Rotman explains that the greatest long-term impact of the legislative flurry could come from its bold embrace of something that has long been a political third rail in the US: industrial policy. Industrial policy means deliberate government interventions, including financial incentives and investments and favoring growth in particular industries or technologies. Rotman argues that replicating Silicon Valley in new US cities is not enough to strengthen prosperity; governments at all levels must take an interest in fostering continuous innovation that improves our lives in areas like education, health care, and other services.
Is ChatGPT a cybersecurity threat? | TechCrunch
Israeli cybersecurity company Check Point demonstrated that when OpenAI’s ChatGPT, an AI-driven natural language processing tool, and their code-writing system, Codex, are used in tandem, they are capable of creating more legitimate-sounding phishing emails that carry a malicious payload. Check Point threat intelligence group manager Sergey Shykevich said the web-based chatbot represents “another step forward in the dangerous evolution of increasing sophisticated and effective cyber capabilities.” The cybersecurity company also emphasized the danger of cyber criminals using ChatGPT to create malicious code. Researchers have witnessed multiple instances of hackers without technical skills utilizing the chatbot for malicious purposes and boasting about their AI-generated code online. Dr. Suleyman Ozarslan, a security researcher and the co-founder of Picus Security, claims ChatGPT and tools like it will democratize cyber crime and virtually anyone will be able to create ransomware themselves. However, experts also believe ChatGPT is capable of being used defensively to analyze potential cyber security vulnerabilities and create positive security suggestions.
State & Local Tech Ecosystems
Tech Layoffs Mean Even More Empty Offices in NYC, San Francisco | Bloomberg
The rise in remote work and continued tech layoffs are challenging major US office markets, particularly in New York City and San Francisco, which are dependent on tech and finance office workers. San Francisco ended the year with a record 27.6 percent office vacancy rate—high above its pre-pandemic rate of 3.7 percent. Similarly, the leasing rate in New York City in the last three months was 27 percent behind the quarterly average as major tech companies have pulled back on their office leasing. Meta sold their recently developed office spaces in New York and Compass Inc. began subleasing the rest of its space in the city. Though layoffs to date have been largely confined to the tech sector, many financial-services companies are expected to begin or have already started laying off staff, potentially slowing the market further and creating even more office vacancies in major US cities. Landlords are bearing the brunt of the challenge with costs of running buildings, construction, and labor on the rise while rent is decreasing.
Divided House approves GOP inquiry into ‘weaponization’ of government | The New York Times
On Tuesday, House Republicans approved the Select Subcommittee on the Weaponization of the Federal Government, which will be chaired by Ohio Republican and Trump ally Representative Jim Jordan. The broad-reaching panel will investigate whether federal law enforcement and national security agencies participated in a concerted effort to curtail conservatives’ First Amendment rights. All Democrats opposed the subcommittee. With open-ended jurisdiction over issues related to civil liberties, the subcommittee has the authority to obtain how any federal government agency collected, analyzed, and used data about Americans (including covert actions). Their investigation includes allegations that social media platforms discriminated against Republicans and conservatives at the behest of the federal government. New York Democrat, Representative Jerrold Nadler, expressed concern that the subcommittee will “enable House Republicans to interfere with the free operation of businesses they do not like.”