In this week’s edition of the News Roundup, we cover President Biden's new US industrial policy, driven by the Inflation Reduction Act and Chips and Science Act, China’s introduction of AI regulations to balance state control with global competitiveness for Chinese companies, and the power of tech lobbyists in shaping state privacy laws. Stories also include Tencent’s new AI model and concerns amid AI's rise in online influence campaigns.
Industrial Policy & International Security
Inside the $220bn American cleantech project boom | Financial Times
President Joe Biden's new era of US industrial policy, initiated by the Inflation Reduction Act (IRA) and the Chips and Science Act, has led to over $224 billion in cleantech and semiconductor manufacturing projects announced in the US. The legislation passed in August 2022 offered tax credits, loans, and subsidies to develop a domestic cleantech and semiconductor supply chain. At least 110 large-scale manufacturing announcements, including semiconductors, electric vehicles, batteries, and solar and wind parts, have been identified in response to the legislation, promising 100,000 jobs. Despite concerns about supply chain development, skilled labor shortage, and raw material constraints, the US aims to achieve self-sufficiency while still depending on global cooperation.
China Wants to Regulate Its Artificial Intelligence Sector Without Crushing It | TIME
Beijing is preparing to enforce comprehensive AI service regulations aimed at striking a balance between state control and supporting Chinese companies' global competitiveness. The new rules comprise 24 guidelines requiring AI platform providers to register services, conduct security reviews prior to market entry, and ensure various other standards. Seven oversight agencies will be involved, including the Cyberspace Administration of China and the National Development and Reform Commission. These regulations are more lenient than an initial draft, demonstrating China's progressive approach to AI governance, in contrast to the US where there is no significant legislation in progress. The EU also passed a draft AI Act in June, emphasizing privacy controls and curbing the use of facial recognition.
Eye on China, Biden pulls Japan and South Korea closer | The New York Times
Amid rising threats in the region, the US, Japan, and South Korea are considering a three-way military and economic partnership at Camp David. This move, influenced by Russia's Ukraine invasion and China's regional clout, aims to mend historic tensions between Japan and South Korea. The meeting, initiated by President Biden, focuses on regional peace and countering China. China, Russia, and North Korea's alliances complicate matters. Despite efforts to unite Japan and South Korea on security, domestic politics threaten this unity. The summit's goals include creating lasting cooperation frameworks in AI, supply chains, and cyber security. South Korea's President Yoon is fostering better ties with Japan and the US, but China warns against closer US alignment. Both Japan and South Korea tread cautiously due to significant trade ties with China.
US Regulation
Tech lobbyists are running the table on state privacy laws | Politico
This past spring, Oregon lawmakers considered legislation that would allow citizens to sue companies for digital privacy violations. However, the tech lobby, represented by groups such as TechNet and the State Privacy and Security Coalition, effectively pressured lawmakers to abandon this provision. This trend is not unique to Oregon, as analysis of state privacy laws passed in 2023 reveals that the tech industry has consistently weakened proposed legislation. Industry-friendly laws have been enacted in seven states, eroding the promise of comprehensive data privacy protection. The tech lobby's influence has shifted its focus from lobbying Congress for a federal privacy law to exerting power at the state level.
Innovation
Tencent Says AI Model Coming This Year is Among China’s Best | Bloomberg
Tencent is set to release its proprietary AI model, named Hunyuan, later this year, signaling its intention to compete with established AI leaders like Baidu and SenseTime in China. The company's president, Martin Lau, described Hunyuan as one of the top foundation models in China. Tencent's AI development spans beyond traditional chatbots, with applications in gaming, cloud computing, financial technology, advertising, and marketing. Tencent aims to launch a marketplace for generative AI-powered services for business clients, which is expected to contribute to high-margin profits. The company's approach to AI encompasses a broader perspective, viewing it as a growth multiplier for its business.
Cyber
White House orders federal agencies to shore up cybersecurity, warns of potential exposure | CNN
The White House has instructed federal agencies to enhance their cybersecurity measures after some departments failed to fully comply with President Joe Biden's 2021 executive order aimed at bolstering national cybersecurity. National security adviser Jake Sullivan sent a memo to Cabinet secretaries, expressing concern about the government's vulnerability to cyber intrusions due to inadequate compliance with security practices outlined in the executive order. Agencies are required to achieve full compliance with the order's security requirements by the end of the year. The Biden administration's efforts to improve cybersecurity have intensified since various cyberattacks, including the SolarWinds breach and a ransomware attack on a major fuel pipeline operator.
State & Local Tech Ecosystems
California exodus: Top destination for Bay Area transplants isn’t in Texas or Florida. It’s…Seatte? | Mercury News
Despite the common assumption that Californians moving out of the state are drawn to low-tax red states like Texas and Florida, a surprising destination for many Bay Area transplants is Seattle, Washington. King County, which includes Seattle, topped the list of out-of-state destinations for people leaving the Bay Area's core counties in 2021, with over 7,600 Bay Area residents moving there. The draw of Seattle can be attributed to similar politics, a well-developed tech sector, no state income tax, and relatively more affordable housing compared to most of the Bay Area.
Democracy Online
AI use rising in influence campaigns online, but impact limited - US cyber firm | Reuters
Mandiant, a cybersecurity firm owned by Google, revealed a growing trend of artificial intelligence (AI) being utilized in online manipulative information campaigns. Since 2019, AI-generated content like fabricated profile photos has been employed in influence campaigns linked to numerous governments, including Russia, China, Iran, and several others. The rise of generative AI models, like ChatGPT, has prompted concerns, as they simplify the creation of fake content. These AI tools allow entities with limited resources to craft high-quality misleading content on a large scale. An example is the Dragonbridge campaign supporting China, which grew massively since 2019. However, Sandra Joyce from Mandiant mentioned that these campaigns haven't had a significant impact yet. Mandiant observed that AI hasn't been prominently used in threats by major nations and its role in digital breaches remains minimal currently. Joyce anticipates the AI threat will escalate in the future.
