A weekly digest of the latest news and research related to the work of the Technology, Economics, and Governance Working Group. Topics covered in the digest include cybersecurity, domestic regulation, innovation, international competition, social media disinformation, and the California exodus.
This week’s roundup includes the drone strike killing Ayman al-Zawahri, Nancy Pelosi’s Taiwan visit, proposals to regulate crypto as a digital commodity, ambitious EV tax credits, and DISA’s move to include SIPRNet in a zero trust architecture pilot project. Additionally, Ghost Security raises funding to deliver modern app and API security solutions, Britain’s Conservative Party response to ballot vulnerabilities, Meta’s leadership goes virtual, and Alex Jones is penalized with over $50 million in damages for his defamatory Sandy Hook coverage.
Industrial Policy & International Security
The killing of Ayman al-Zawahri: what we know | The New York Times
The CIA led a drone strike operation over the weekend that killed Ayman al-Zawahri, who was instrumental in the 9/11 attacks and inherited al-Qaeda leadership after Osama bin Laden’s death in 2011. After US troops withdrew from Afghanistan, al-Zawahri allegedly moved to Kabul from Pakistan. This move indicates that the Taliban may have violated the terms of the Doha Agreement, in which they committed to keep terrorist organizations like al-Qaeda out of Afghanistan as a condition for the withdrawal of NATO troops. In June, the United Nations reported that al-Qaeda operated more freely in Afghanistan under Taliban rule. While the Taliban condemned the US strike, civilians living in Kabul expressed anger and helplessness under Taliban decisions that sacrifice their security.
Nancy Pelosi has left Taiwan. The real crisis may be just beginning | The Economist
Nancy Pelosi’s unprecedented visit to Taiwan angered officials in China earlier this week. China responded with the announcement that four-day long military exercises surrounding Taiwan would begin after Pelosi’s departure, in addition to banning imports from Taiwan including fish, agricultural goods, and more. American military leadership and policy analysts agreed that the timing of Pelosi’s visit was poor but a change of plans could show weakness. Moreover, the coinciding anniversary of the founding of the People’s Liberation Army and the upcoming party congress further instigated belligerent attitudes in China. In the wake of President Biden’s recent statements about defending Taiwan, some believe this trip is another step away from the United States’ policy of strategic ambiguity. The break from the status quo on both sides may signal rising tensions in the Taiwan Strait.
US Regulation
Push to give derivatives regulator more sway over crypto trading gains steam | Bloomberg
The Commodity Futures Trading Commission (CFTC), a regulator of US derivatives, would gain an increase in oversight over cryptocurrency trading in a plan introduced in the Senate Agriculture Committee (the main overseer of the CFTC). Industry trade groups and crypto executives have pushed for the CFTC to take on a greater role to resist the SEC’s purview, as treating digital assets as securities would require strict investor-protection requirements. The new legislative proposal includes oversight of assets that qualify as digital commodities, such as Bitcoin and Ether, and encourages the CFTC to undertake research studies, including the energy usage of crypto and the demographics of customers on the market. The bill needs to pass through more rounds in the Senate before it reaches the House.
EV tax credits could stall out on lack of US battery supply | MIT Technology Review
A tax credit meant to increase adoption of EVs could stall because of the auto industry’s reliance on parts from China. Included in the Inflation Reduction Act of 2022, the credits require qualifying companies to source EV batteries and key minerals domestically or from countries with free-trade agreements with the US. The required proportions of minerals mined and processed in the US and battery components made in the US are set to increase over time, beginning in 2023. Critics argue that the timeline is too ambitious, setting companies up to fail. Most of the existing supply chain and manufacturing capabilities for EV batteries are outside of the US, and planning and building new mines can take up to seven years. Other provisions in the bill, such as production tax credits and loans for building factories, may do more to incentivize domestic mining and battery manufacturing.
Innovation
Ghost Security emerges from stealth to defend APIs and apps from attackers | TechCrunch
Ghost Security, a self-described “app security” startup, raised $15 million in venture funding boosting its valuation to $50 million. Apps and APIs are increasingly used as vectors for malicious attacks; malicious API usage increased by 681% between 2020 and 2021. While Ghost has not launched its product yet, CEO Greg Martin argues their “data science” approach modernizes security for apps and their dependencies in the distributed environments driven by large scale cloud adoption. Ghost Security’s team has the cybersecurity expertise to back up these claims with previous experience at Symantec, Check Point, Blackfin Security, and the Department of Homeland Security. Competitors Salt Security and Noname have also raised millions in funding in previous rounds.
Cyber
DISA expanding Thunderdome cybersecurity project to include classified network | Fedscoop
The Defense Information Systems Agency is extending a critical cybersecurity upgrade to include classified information networks. The initiative, also known as Thunderdome, is designed to move the Department of Defense toward a zero trust architecture. DISA awarded an Other Transaction Agreement to Booz Allen Hamilton to begin prototyping an unclassified network in January. The 6-month delay expands the project’s scope to include a zero trust solution the Secure Internet Protocol Router Network (SIPRNet)--the DoD’s secret-level network. While a timely rollout of the new system is a high priority, DISA says the extension will ensure better protection.
Britain’s Conservative party voting for next PM delayed after hacking alert | Reuters
Voting for Britain’s next prime minister has been delayed after the Government Communications Headquarters (GCHQ), the UK’s signals intelligence agency, warned that hackers could change ballots after they are cast. The announcement did not include evidence of foreign interference and warned about general vulnerabilities in the voting process. Due to these concerns, the Conservative Party will no longer allow members to change their vote later during the process. Around 160,000 party members are still waiting on postal ballots now expected as late as mid-August. The result of the vote between candidates Rishi Sunak and Liz Truss is still expected on September 5th.
State & Local Tech Ecosystems
As top executives flee Silicon Valley, Meta becomes truly virtual | Financial Times
Top executives at Meta are moving away from California: Instagram’s Adam Mosseri and global policy chief Nick Clegg are headed to London and others are already settling in in Israel, Spain, and New York. And Mark Zuckerberg splits his time between Hawaii and Silicon Valley. The pandemic instigated a shift at Meta from open-office collaboration typical of startup culture to offering remote work as a permanent alternative. Increasingly distributed leadership presents opportunities and challenges for the social media giant. The lack of face-to-face interaction could isolate decision making at the top, while physical presence outside of North America could strengthen their staff leadership and market access. Global companies will be watching and learning from Meta’s experience solving the time zone and social connection challenges posed by increasingly virtual interactions at work.
Democracy Online
As part of a Texas lawsuit filed against Alex Jones by the parents of a Sandy Hook shooting victim, the head of the Infowars media outlet faces a $45.2 million fine in punitive damages and an additional $4.1 million fine in compensatory damages. In the wake of the 2012 tragedy, Jones used his platform to promote conspiracy theories about the victims and their families. The eighteen hours of content he released related to Sandy Hook prompted multiple defamation lawsuits over the years. Wesley Todd Ball, parents Lewis and Heslin’s attorney, encouraged the jury to decide on punitive damages that would not only deter Alex Jones from future efforts to spread misinformation, but also to deter others. The judge could reduce the fine.
Anti-vax Twitter accounts pushing food crisis misinformation, study finds | The Guardian
QAnon-linked Twitter accounts are pivoting away from Covid-19 conspiracy theories to spreading misinformation about the global food shortage. The accounts are promoting the idea that Western sanctions, not Russia’s invasion of Ukraine or blockade of shipping ports, are responsible for declining grain exports. A study by the National Contagion Research Institute (NCRI), which tracks social media disinformation, found that Russian state media and Foreign Minister Sergei Lavrov are currently pushing similar narratives. NCRI also found that QAnon influencers often link food insecurity with a manufactured shortage organized by the “deep state” and Jewish elites. The research organization expects online misinformation and disinformation efforts to increase as food insecurities rise.
