In this week’s edition, Biden shares concerns over the risk of nuclear conflict, CSIS reports on Taiwanese companies’ geopolitical concerns, the White House releases the “Blueprint for an AI Bill of Rights,” Albania considered invoking Article Five after July’s cyberattack, and the Supreme Court prepares to weigh in on four potentially game-changing cases about content moderation. Additionally, federal regulators are losing antitrust cases, the former Uber chief security officer is found guilty of concealing a 2016 hack, and an industry pioneer claims returns on investment in driverless cars are still a long way off.
Industrial Policy & International Security
Biden warns of growing nuclear risk as Ukraine slams Russia for Drone use | Wall Street Journal
During a speech at a Democratic fundraiser, President Biden warned that we are facing the highest risk of nuclear conflict since the 1962 Cuban missile crisis. While there is no new intelligence indicating Russia is planning to use nuclear weapons, Putin is escalating his war in Ukraine in an attempt to reverse Russia’s losses. In addition to mobilizing reservists on a massive scale, Russia is now targeting civilian infrastructure in Ukraine with drone strikes as their stockpiles of missiles dwindle. Biden questions whether Putin has a viable off ramp that allows him to save face. The White House has warned Russia about potential US responses to the use of nuclear weapons.
It’s moving time: Taiwanese business responds to growing US-China tensions | CSIS
Scott Kennedy, CSIS Trustee Chair in Chinese Business and Economics, published a new report analyzing the results of a Chinese-language survey of 500 Taiwanese business executives. The survey queried the executives about their business performance and sought to capture their views on economic and international security issues. Kennedy found that many businesses are moving their operations away from Mainland China and even out of Taiwan. They are reacting to concerns about overdependence on the Chinese economy, COVID-19 policies, cross-strait politics, and security concerns. However, Kennedy also observed that some companies are moving into Mainland China and there are no indications of a wholesale decoupling between Taiwan and China. Overall, the Taiwanese business executives expressed support for expanding trade and investment opportunities, limiting tech transfer to China, and regionally diversifying their operations.
US Regulation
New Biden AI Framework a ‘blueprint’ for future regulations | Netxgov
The Biden administration released the “Blueprint for an AI Bill of Rights” this week to govern the design and usage of artificial intelligence. The White House office of Science and Technology Policy developed the Blueprint in partnership with industry executives and other federal agencies. It includes five guiding principles for developers: creating safe and effective systems, data privacy, algorithm discrimination protections, user notices, and human alternatives. While the Blueprint is not enforceable, it translates principles and civil rights protections into a set of technical standards and lays the groundwork for future legislation. The White House called for technologists to publicly commit to implementing the new standards and they called on policymakers to use the Blueprint to inform future bills.
US keeps losing antitrust court battles but few expect pullback | Reuters
Regulators at the Federal Trade Commission and the Justice Department are not planning to back down on litigating antitrust cases despite recent losses. The government recently lost four cases involving mergers and price fixing. As regulators rely more heavily on litigation instead of negotiated settlements, companies are pivoting to do the same. While they are structuring deals to avoid antitrust accusations, companies are also preparing to go to court instead of working with the government before merger reviews. The FTC alone sued to block six mergers in the past year. George Washington University law professor William Kovacic believes continued losses will hurt the federal agencies’ credibility.
Innovation
Even after $100 billion, self-driving cars are going nowhere | Bloomberg
While autonomous vehicles promise a safer future on the road, today, they are involved in accidents more frequently than their human-driven counterparts. Despite $100 billion in investment (McKinsey estimates) and nearly twenty years of experimentation and development, we’re still a long way from driverless cars. Industry pioneer Anthony Levandowski, who demonstrated an autonomous motorcycle to the DoD in the early 2000s, is skeptical that existing technology is capable of accounting for all possible variables, variations, and edge cases an autonomous vehicle may encounter on the road. Training vehicles with machine learning requires data and it’s unrealistic to expect to encounter or simulate all possible variations of an event from deciding if it’s safe to avoid an animal in the road to making an unprotected left turn. Moreover, it is impossible to predict whether a driverless vehicle will safely navigate a new scenario. For now, humans are better and safer drivers than robots.
Cyber
Former Uber security chief found guilty of covering up massive 2016 data breach | The Verge
Joe Sullivan’s guilty verdict may change the way companies respond to cybersecurity breaches. The former Uber chief security officer was found guilty of both obstruction of justice and misprision after he failed to report a 2016 cyberattack to authorities. The attack compromised over 50 million riders’ and 7 million drivers’ personal data. While Sullivan shared some details of the hack with Uber leadership at the time, it appears that he concealed the full scope of the incident to protect his reputation–the 2016 hack followed a similar breach in 2014. Reporters believe this is “the first time a company executive faced criminal prosecution over a hack.” Sullivan could face up to eight years in prison.
Albania weighed invoking NATO’s Article 5 over Iranian cyberattack | Politico
Hackers forced the Albanian government to shut down many government websites and services in a July attack so debilitating that Prime Minister Edi Rama considered invoking NATO’s Article Five, which requires a collective defense response. Article Five has only been triggered once, after September 11th, and it is unclear what a collective NATO response to a cyberattack might look like. The cyberattack against Albania is widely attributed to Iranian hackers and the government ultimately decided to sever diplomatic ties with Iran and chose not to trigger Article Five. The United States provided in-person investigative expertise to Albania in the wake of the attack and Albania expects to build up their cyber defenses with US financial aid.
State & Local Tech Ecosystems
San Francisco’s high taxes and living costs threaten Silicon Valley’s dominance | Financial Times
While foreign direct investment (FDI) in the United States is rebounding after the pandemic, investment in San Francisco projects is continuing to decline and in 2021 hit the lowest levels since 2009. According to fDi Markets, San Francisco attracted $222 million in greenfield FDI last year, which is 87% less than peak investment levels reached in 2016. FT-Nikkei rankings may shed some light on the decline. While San Francisco is ranked third in the US for workforce and talent, it ranks third-to-last for business environment (accounting for tax rates, incentives, and office costs) and second-to-last in the survey for quality of life (considering safety, cost of living, commute, and schools). San Francisco is losing businesses and talent to other parts of the US such as Austin and Denver, which have more favorable business policies and more manageable cost of living.
Democracy Online
Supreme Court poised to rewrite how social media confronts disinformation | CyberScoop
The Supreme Court is set to rule on four cases that could change how social media platforms moderate user-generated content. Two of the cases address Florida and Texas laws intended to prevent censorship of political speech online. The remaining cases challenge Section 230 and the Communications Decency Act and seek to hold social media platforms accountable for enabling recruitment and communications among terrorists. While many critics argue that tech companies aren’t doing enough to address disinformation, most users don’t realize how much content is already blocked. The Supreme Court’s rulings on these cases could limit the content moderation tools available to platform owners and dramatically increase the stream of false information (and even malware) online.
