In this week's news roundup, the US and Netherlands escalate restrictions on chipmaking equipment sales to China, experts recommend the US help revitalize NATO front-line states’ defenses, and the FTC prepares its largest antitrust case against Amazon. Additionally, public sentiment toward AI is examined, Virgin Galactic achieves a successful commercial space mission, a hacking incident against Russian targets unfolds, and a Supreme Court ruling weighs in on digital speech.
Industrial Policy & International Security
US, Dutch set to hit China’s chipmakers with one-two punch | Reuters
The United States and the Netherlands are intensifying efforts to restrict sales of chipmaking equipment to China to prevent them from strengthening their military capabilities. The Dutch government plans to announce new regulations that will require a licensing requirement for certain chipmaking equipment from ASML, including its deep ultraviolet semiconductor equipment. Their most sophisticated equipment has never been shipped to China. The US is expected to go further by restricting even more Dutch equipment from specific Chinese fabs. The US previously imposed export restrictions on American chipmaking tools to China, and it has been encouraging other countries with key suppliers to adopt similar policies. Japan has already adopted rules to restrict exports of semiconductor manufacturing equipment. The new regulations from the US and the Netherlands will likely impact Chinese chipmakers, such as SMIC, and companies like ASML and ASM International, which are major players in the chip equipment industry.
Revitalize laws to turn Eastern and Northern Europe into ‘porcupines’ | DefenseNews
The upcoming NATO summit will focus on Ukraine's potential path to joining the alliance, but it's important for NATO to also consider the defense capabilities of its own front-line states in the event of a Russian invasion. Countries like Finland, Estonia, Latvia, Lithuania, Poland, and Norway are committed to the alliance but have weaknesses in their own defense, primarily due to financial constraints. Even if these countries were to increase defense spending to 5 percent of their GDP, their budgets would still be inadequate for a large-scale war against Russia. The United States can address this issue by revitalizing its lend-lease and military aid programs, providing loans, leases, and grants of military hardware to equip these front-line states. Arming these NATO allies with asymmetric defense capabilities, such as loitering munitions, could deter Russia by increasing the cost of an invasion. Congress can expand current lend-lease authorities to include NATO’s front-line states and employ mechanisms like the Defense Export Loan Guarantee Program to support the supply of weapons to these countries. By bolstering defenses along Russia’s borders, deterrence against Kremlin aggression can be enhanced.
US Regulation
FTC reportedly finalizing its biggest Amazon antitrust case yet | TechCrunch
The US Federal Trade Commission (FTC) is reportedly preparing its largest antitrust case against Amazon, with plans to file a lawsuit in the coming weeks. The case will allege that Amazon unfairly disadvantages merchants who do not use certain optional services, such as "Fulfilled by Amazon," thereby manipulating the market where it holds substantial power. If the FTC can demonstrate that Amazon is maliciously manipulating the market, it could seek to break up or restructure the company. FTC Chair Lina Khan, known for challenging the traditional doctrine that defines monopolies, could establish a precedent that highlights the emergence of new and dangerous forms of market control. Khan’s frequent criticism of Amazon has led the company to suggest she is biased against them. The case has been in development for several years, and the FTC aims to file it before logistical issues arise in August.
Innovation
Hope, fear, and AI | The Verge
The Verge, in collaboration with Vox Media's Insights and Research team and The Circus consultancy, conducted a survey to understand public sentiment toward AI. The results showed that while AI is rapidly gaining attention, its usage is still limited, particularly among older generations. Most people have heard of AI tools like ChatGPT but have not used them. The survey also revealed high expectations for AI's impact on society, with 74 percent of respondents believing it will have a large or moderate impact. AI tools are predominantly being used for creative purposes such as editing or generating writing, music, videos, and artwork. Coding was a less common use case. Users generally found AI-generated content to be better than what they could produce themselves. Respondents expressed mixed feelings regarding the ethical implications of AI. For example, a majority agreed that artists should be compensated for AI-generated content resembling their work. There is broad support for regulations and laws surrounding AI development, including requirements for fact-checked data and clear labeling of AI-generated content. Overall, people feel both excited and anxious about AI's potential impact on society and personal lives.
Virgin Galactic aces its 1st-ever commercial launch of suborbital space plane | Space.com
Virgin Galactic successfully completed its first commercial mission on June 29, marking a significant milestone for the company. The flight took off from Spaceport America in New Mexico, reaching suborbital space and returning to Earth. The space plane, VSS Unity, achieved an apogee of 52.9 miles (85.1 kilometers) and experienced a few minutes of weightlessness before landing safely. The mission included four passengers: Walter Villadei, Lt. Col. Angelo Landolfi, Pantaleone Carlucci, and Virgin Galactic astronaut instructor Colin Bennett. The Italian Air Force and Italy's National Research Council had booked the flight for suborbital research. Villadei, for example, collected biometric data about his body’s response to microgravity. Virgin Galactic aims to increase the frequency of its flights and plans to fly Unity monthly starting from August. The company envisions a future where space travel becomes routine, with the capability to carry customers to space daily using a fleet of space planes and carrier craft.
Cyber
White House unveils fiscal 2025 cybersecurity investment priorities | Nextgov
The White House has released cybersecurity investment priorities for fiscal year 2025, urging federal agencies to adopt the National Cybersecurity Strategy five pillars in their budgets and missions: defending critical infrastructure, disrupting threat actors, shaping market forces, investing in a resilient future, and forging international partnerships. The Office of Management and Budget memorandum calls on government agencies to improve baseline cybersecurity and prioritize modernization efforts for aging and national security systems. To address workforce gaps, agencies should use skills-based hiring practices and prioritize certain cyber issues. Implementation of the memorandum and budget submissions will be jointly reviewed by the Office of the National Cyber Director and the Office of Management and Budget. Additional guidance on cybersecurity research and development priorities will be released in a separate memorandum.
Hackers attack Russian satellite telecom provider, claim affiliation with Wagner Group | Cyberscoop
Unidentified hackers targeted the Russian satellite telecommunications provider Dozor, which serves Russian military units and the Federal Security Service (FSB), as well as four unconnected Russian websites. On Telegram, the group claimed their attack on Dozor destroyed server information and caused satellite terminals to fail and switches to reboot. The hackers also posted files showing connections between the FSB and Dozor, along with passwords for verifying FSB representatives. The Dozor internet connection went down, and its parent company, Amtel-Svyaz, could not be reached for comment. Notably, the hacking group’s messaging is supportive of the Wagner private military company, which recently made headlines with an uprising challenging Russian President Vladimir Putin's power. There are debates about the authenticity of Wagner's involvement in the attack; Oleg Shakirov, a cyber policy expert affiliated with the Moscow-based PIR Center, suggests this could be a Ukrainian false flag operation.
State & Local Tech Ecosystems
Silicon Valley is bracing for a ‘Darwinian moment for startups’ in late 2023 | Insider
Silicon Valley is facing an impending "extinction event" that threatens the survival of numerous startups. The economic landscape for venture capital-backed tech businesses has become dire, with a drought in venture capital and a decline in IPOs. Factors such as inflation, supply chain issues, and a drop in VC investments into startups are contributing to the perfect storm of startup failures. Early-stage startups raised significant capital throughout 2021 and 2022, but many have less than 12 months of runway left. Experts predict the failure rate will begin to increase in the latter half of 2023 and may outstrip the dot-com crash of the 2000s. Startups offering non-essential software services and those in the crypto sector may be particularly vulnerable. Companies with no revenue are at the highest risk, while AI-focused startups may fare better. Some experts believe that clear focus, fiscal discipline, and bridge rounds could help businesses weather the crisis. Others suggest entrepreneurs should consider acquisition or alternative exit strategies.
Democracy Online
People believe GPT-3-created disinformation more readily than human-generated disinformation | Fast Company
A recent study in Science found AI-generated disinformation to be more successful at deceiving the public than human-generated content. Researchers from the University of Zurich, Giovanni Spitale and Federico Germani, designed prompts for GPT-3 to generate false and accurate tweets on controversial topics. Participants were 37.5 percent more likely to believe AI-generated disinformation. The cause of this result remains unclear, but the researchers speculate that AI-generated writing's clarity and formulaic nature could be a contributing factor. The rapid creation and dissemination of AI-generated falsehoods pose significant challenges, with the potential for personalized disinformation targeting individuals' vulnerabilities as AI advances. The researchers also highlight the increasing threat of misinformation through artificial imagery, video, and audio content. Concerns persist about the slow pace of governance mechanisms in addressing these issues amidst rapid AI development.
Supreme Court makes it harder to prosecute online stalkers | Los Angeles Times
The Supreme Court ruled in a seven-to-two decision that the First Amendment protects threatening speech online unless a court can prove the defendant understands their words are threatening. The case involved Billy Counterman, who sent disturbing messages to singer Coles Whalen. Lower courts upheld Counterman's stalking conviction, believing a reasonable person would see the messages as threats. However, the Supreme Court required prosecutors to prove that the defendant knowingly acted recklessly by sending messages that could be perceived as threatening. The ruling does not require proof of intent to threaten. Justices Barrett and Thomas dissented, concerned about protecting individuals who may not understand the nature of their words or may be deceptive. The American Civil Liberties Union supported the ruling, emphasizing the chilling effect that would occur if people could be held responsible for “failing to predict how their words would be received.” The decision could lead to a new trial for Counterman.
