Trump's allies draft sweeping AI executive order | China's pressure on Palau escalates | AI firms used YouTube subtitles for training without permission
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Trump’s allies are drafting a sweeping AI executive order that would launch a series of “Manhattan Projects” to develop military technology and immediately review “unnecessary and burdensome regulations" — signaling how a potential second Trump administration may pursue AI policies favorable to Silicon Valley investors and companies. The Washington Post
Increasing pressure from China following a denied entry for a tourism delegation to Macao and a suspicious cyber attack targeting customs and border functions, highlighting the geopolitical tensions surrounding Palau's diplomatic ties with Taiwan and its strategic association with the US. Nikkei Asia
An investigation found that top AI companies, including Anthropic, Nvidia, Apple, and Salesforce, used subtitles from 173,536 YouTube videos for training AI models without permission, violating YouTube’s terms of service, and raising concerns among content creators about data misuse and lack of compensation. Proof News
ASPI
Australia and Japan should consider a security division-of-labour in the Pacific
The Strategist
Alex Bristow
Australian Foreign Minister Penny Wong will attend the 10th Pacific Island Leaders Meeting in Tokyo to reaffirm Japan’s contributions to regional peace and explore defence and security cooperation. The meeting will address climate resilience and economic development, emphasising a rules-based order and Japan's security focus, particularly concerning China. Technologically, Japan is leveraging its expertise in infrastructure, including telecommunications and subsea cables, to enhance Pacific security, working with Australia and the US to exclude Chinese providers. This increased security involvement requires coordination with partners like Australia to address geopolitical challenges.
AUKUS is more than submarines
Just Security
Justin Bassi, Maeve Ryan and Lisa Curtis
AUKUS is progressing into its third year of partnership, aiming to counter China's military and technological advancements. The pact focuses on developing nuclear-powered submarines and enhancing advanced capabilities such as cyber, AI, and quantum technologies. This effort aims to maintain a strategic edge by integrating resources and capabilities among the three member nations. The article highlights the need for adjusting export controls and fostering collaboration among defence and tech sectors. AUKUS is seen as crucial for deterring China's ambitions and ensuring regional security, emphasising technology's role in modern warfare.
Australia
AI inquiry: Australian privacy laws decades out of date, redress, reform needed
The Australian
Jessica Wang
Australia's outdated privacy laws need urgent reform to protect against the rapid advancements of the AI industry, says human rights lawyer Lizzie O’Shea. Speaking at a parliamentary inquiry, O'Shea argued that the current legislation, which has a limited definition of personal information, allows exploitative data practices. She called for laws ensuring fair consent, regulatory bodies to penalise breaches, and transparency in algorithm auditing. Highlighting the dangers of social media algorithms, she stressed the need for protections against misinformation and disinformation.
Australia tells Russia to 'back off' after Kremlin criticises espionage allegations
The Record by Recorded Future
Daryna Antoniuk
Russia has accused Australia of inciting “anti-Russian paranoia” following the arrest of Russian-born Kira Korolev and her husband Igor in Brisbane, suspected of spying for the Kremlin. The Russian Embassy criticised the charges as a distraction from the Australian Labor Party’s policy failures and denied knowledge of any espionage activities. Australian Prime Minister Anthony Albanese condemned Russia's lack of credibility and international law breaches. The couple, facing up to 15 years in prison if convicted, allegedly attempted to access and relay sensitive national security information to Russia. The investigation is ongoing.
China
Intel venture arm’s China tech stakes raises alarm in Washington
Financial Times
Tabby Kinder, George Hammond, Demetri Sevastopulo and Ryan McMorrow
Intel's venture capital arm, Intel Capital, has become a prominent foreign investor in Chinese AI and semiconductor start-ups, even as the US implements tighter controls on tech investments in China. Intel Capital holds stakes in 43 Chinese tech start-ups and has invested in over 120 Chinese companies since the early 1990s. Despite rising geopolitical tensions and new US regulations aimed at curbing investments in Chinese tech firms with potential military applications, Intel Capital has continued investing in China. Notable investments include AI-Link and North Ocean Photonics. The Biden administration's upcoming rules may force Intel Capital to divest from some Chinese companies.
China puts power of state behind AI—and risks strangling it
The Wall Street Journal
Liza Lin
China is boosting its AI sector by leveraging state resources to compete with American tech giants. Despite initial successes, China's strict political regulations threaten its AI ambitions. The government mandates rigorous testing and restricts politically sensitive content, contrasting with the US's private sector-driven innovation. Efforts include subsidizing computing power and developing homegrown chips, hindered by US export restrictions on advanced semiconductors. While state-driven projects aim to enhance AI in sectors like manufacturing, heavy regulation risks inefficiencies and stifles creativity.
Chinese EV laser maker fights back against Pentagon blacklisting
Financial Times
Edward White and Demetri Sevastopulo
In response of being classified in US Pentagon list of "Chinese Military Companies" that impacting its share price, Hesai filed a lawsuit against the Pentagon, claiming the allegations were unfounded and that their technology, used in autonomous vehicles, does not have military connections. Despite the geopolitical tension, Hesai continues its operations, with a significant market share in lidar sales to the global automotive industry. The US has increasing concerns about Chinese tech firms' potential to compromise American data security, further complicating Hesai's international business prospects.
Chinese soldiers gear up for winter warfare
The Strategist
Anushka Saxena
China is bolstering its military capabilities in high-altitude and cold environments to counter India by improving its soldiers' adaptation to such conditions. Under President Xi Jinping, the PLA has focused on modernising through "informatisation" and "intelligentisation," integrating advanced technologies. The PLA's Western Theatre Command is enhancing its terrain and altitude training, which includes snow shovelling and establishing concealed command posts. These efforts aim to improve combat readiness and logistical superiority.
USA
Trump allies draft AI order to launch ‘Manhattan Projects’ for defense
The Washington Post
Cat Zakrzewski
Former President Donald Trump’s allies are drafting an executive order to launch major AI development projects and reduce regulatory burdens, aiming to support Silicon Valley investors and tech companies. The proposed framework would establish industry-led agencies to evaluate AI models and secure systems against foreign threats, marking a shift from Biden's AI policies, which focus on safety testing. This move comes amid growing political support from tech executives, including Elon Musk and Bill Ackman, highlighting a potential Trump administration’s favourable stance towards the tech industry.
Elon Musk enters uncharted territory with Trump endorsement
The New York Times
Kate Conger and Ryan Mac
Elon Musk endorsed Donald Trump for president following a rally shooting in Pennsylvania, using his social media platform X to publicly support Trump and announce his running mate, Senator J.D. Vance. This marks a departure from the tradition of social media neutrality among tech leaders. Musk's political posts on X, which reach nearly 190 million followers, have raised concerns about how opponents will be treated on the platform. Critics, including Biden campaign spokesman James Singer, have condemned Musk's support, while Musk has defended his actions, accusing rival tech executives and media of contributing to inflammatory rhetoric.
Musk, other pro-Trump billionaires have helped shape shooting narrative
The Washington Post
Elizabeth Dwoskin and Faiz Siddiqui
After Trump assasination attempt, right-leaning tech and business leaders, led by X owner Elon Musk, criticised diversity initiatives in the Secret Service and made unsubstantiated allegations about the shooting. Musk's post endorsing Trump received over 118 million views, surpassing Obama's post condemning violence. This highlighted the influence of these leaders on the platform and the political narrative. Despite efforts to control misinformation, changes to the platform under Musk's ownership have made it more challenging to discern reliable information, with conspiracy theories trending. Musk and his inner circle's support for Trump marks a significant shift in the political landscape among business and tech leaders.
Silicon Valley’s tech titans line up to donate to Donald Trump
Financial Times
Alex Rogers and Tabby Kinder
US tech and business leaders have donated to America Pac, a new super-political action committee supporting Donald Trump's presidential bid. The PAC has raised over $8.7 million since June, with significant donations from Silicon Valley investors. The donors include Sequoia partner Shaun Maguire and Valor Equity Partners founder Antonio Gracias. Elon Musk, who endorsed Trump recently, is expected to contribute as well. This shift among tech leaders reflects growing discontent with President Biden's regulatory and tax policies, leading them to support Trump's promises to protect free speech and the cryptocurrency industry.
Feds break into suspected Trump shooter’s phone
The Record by Recorded Future
Joe Warminsky
The FBI has accessed the phone of Thomas Matthew Crooks, the suspected shooter in the assassination attempt on former President Donald Trump, using advanced technology capable of bypassing password-protected iPhones. The phone was shipped to the FBI lab in Quantico for analysis. The investigation, which considers potential domestic terrorism, is ongoing. The FBI has conducted searches of Crooks' home and vehicle and reviewed hundreds of digital media tips and nearly 100 interviews.
New Senate bill seeks to protect artists’ and journalists’ content from AI use
TechCrunch
Aisha Malik
A bipartisan group of senators has introduced the Content Origin Protection and Integrity from Edited and Deepfaked Media Act to protect artists, songwriters, and journalists from having their content used to train AI models without consent. Authored by Senators Maria Cantwell, Martin Heinrich, and Marsha Blackburn, the bill mandates that AI developers include provenance information on digital content, preventing its use in AI training and enabling creators to sue for unauthorised use. The US National Institute of Standards and Technology will set guidelines for detecting AI-generated content. This initiative comes amidst a surge in AI regulation efforts, aiming to increase transparency and combat harmful deepfakes.
J.D. Vance is Trump’s pick for vice president
WIRED
Vittoria Elliott
Former president Donald Trump has officially named Senator J.D. Vance of Ohio as his running mate for the upcoming presidential election. Vance, who was once a critic of Trump, has since become a strong supporter and has significant ties to Silicon Valley through his previous venture capital work, including connections with investor Peter Thiel. Vance's understanding of technology and venture capital could shape the Trump administration's approach to the tech industry, particularly regarding content moderation and platform regulation. This decision highlights Trump's focus on blending political strategy with tech industry insights in his campaign.
Americas
Bridge49 launches: A tech alliance to transform US-Mexico nearshoring
Associated Press
The US-Mexico Foundation and the American Chamber/Mexico have launched Bridge49: The Nearshoring Tech Alliance to boost US-Mexico trade by leveraging advanced technology. This alliance includes six leading B2B tech companies focused on improving logistics, procurement, supply chain tech, modern finance, and manufacturing. With US-Mexico trade hitting $799 billion in 2023, the initiative aims to foster innovation, produce research, and promote collaboration to enhance economic growth and address industry challenges.
North Asia
Japan mulls monitoring metadata for pre-emptive cyberattack defenses
Kyodo News
The Japanese government plans to monitor private metadata, like message sizes and IP addresses, without identifying individuals, to enhance its pre-emptive cyberattack defenses. This excludes monitoring message content to protect privacy and comply with Japan's Constitution. A proposed bill, expected in the fall, will focus on "active cyber defense" by detecting and preventing cyberattacks, with metadata collection managed by a new organization under the National Center of Incident Readiness and Strategy for Cybersecurity.
Japan punishes more than 200 defence officials for mishandling classified data and other misconduct
ABC
Japan’s defence ministry has disciplined over 200 senior officials and service members for mishandling classified materials and other misconduct, including breaking sensitive information laws and falsely claiming allowances. Admiral Ryo Sakai, head of the Maritime Self Defence Force, resigned, while Defence Minister Minoru Kihara apologised, citing damage to public trust and pledging reforms. No sensitive information leaked, but the issue raises concerns about Japan's reliability as a defence partner amid growing military cooperation with the US and others.
Southeast Asia
Cambodia scam marketplace linked to $29M in cryptocurrency frozen by Tether
The Record by Recorded Future
James Reddick
Tether has frozen over $29 million in stablecoins connected to a large Cambodian online marketplace, Huione Guarantee, known for facilitating "pig butchering" scams. These scams involve tricking victims into making fake investments. The platform, part of Huione Group, supports money laundering, deepfake tech, and human trafficking tools. Researchers tracked $11 billion in scam transactions, mainly in USDT, a stablecoin. Following a law enforcement request, Tether froze the funds, underscoring its commitment to fighting cybercrime. This action follows similar measures, like freezing $225 million tied to human trafficking in Southeast Asia.
NZ & Pacific Islands
Palau says China exerting 'new level' of pressure
Nikkei Asia
Shaun Turton
Palauan President Surangel Whipps Jr. expressed concern over increased pressure from China, highlighted by a tourism delegation being denied entry to Macao and a recent cyberattack targeting Palau's customs and border functions. Palau, which maintains diplomatic ties with Taiwan and is in free association with the US, has experienced significant cyber threats, including a major ransomware attack in March traced back to China. Whipps emphasized that Palau is diversifying its tourism markets to reduce dependency on Chinese tourists, amidst geopolitical tensions and efforts to strengthen relations with the US, Australia, Japan, and Taiwan.
Foreign cyberattacks have ‘never been more pervasive’
Stuff
Paula Penfold
A cybersecurity firm has issued a warning about the increasing prevalence of foreign state-based cyber activity targeting New Zealand. This follows a Government Communications Security Bureau report highlighting shortcomings in its response to a 2021 cyberattack on the country two MPs and an academic, including delays in informing the targets and the then-Minister responsible, Andrew Little. The review emphasized the need for a broader consideration of the implications of cyber incidents beyond technical responses. The Bureau's National Cyber Security Centre acknowledged a rise in phishing emails but found no evidence of a successful security compromise.
A new era for Japan and the Pacific Islands
The Diplomat
Hideyuki Shiozawa
Japan's relationship with Pacific Island countries has strengthened through bilateral and regional approaches, especially via the Pacific Island Leaders Meeting. Initially focused on fisheries and development, the partnership has evolved to address strategic issues like the Free and Open Indo-Pacific vision. The meeting aims to align Japan's efforts with the grouping' 2050 Strategy Implementation Plan, focusing on technology and connectivity, and promoting science-based information sharing to counteract false narratives and ensure regional development.
Ukraine - Russia
Ukraine drone attack sparks fire at factory in Kursk region
Reuters
Ukrainian attacks caused a fire at a factory producing electrical devices and wounded at least six people in Russian areas bordering Ukraine overnight, local governors said on Tuesday. None of the workers were injured in the drone attack on factory in the town of Korenevo in Russia's Kursk region, but one person was wounded when a drone dropped an explosive device on a private household elsewhere in the region. The Russian Defence Ministry said air defence systems destroyed 13 Ukrainian drones overnight, including one drone over the Kursk region.
Europe
Europe’s rushed attempt to set the rules for AI
Financial Times
Javier Espinoza
EU's new Artificial Intelligence Act is feared to impact small tech companies significantly. The AI Act, coming into force in August 2024, introduces a tiered system of regulation based on AI's risk level: minimal risk systems will face no regulation, limited risk systems like chatbots will have light transparency obligations, while high-risk systems, including those used in critical infrastructure, will encounter stringent rules. This includes requirements for data transparency, quality, and human oversight. There is concern of compliance costs, potentially running into six figures for small companies. The Act aims to establish Europe as a leader in trustworthy AI, but critics argue it might stifle innovation and hinder competitiveness in the global AI race.
EU’s AI Act gets published in bloc’s Official Journal, starting clock on legal deadlines
TechCrunch
Natasha Lomas
The EU's AI Act, now officially published and effective from August 1, will fully apply to AI developers by mid-2026, with various implementation deadlines. The Act imposes different obligations based on AI use case risk levels. Low-risk uses remain mostly unregulated, while high-risk applications, such as those in law enforcement and biometric data, face stringent requirements. Banned uses include social credit scoring and untargeted facial recognition. Transparency requirements apply to general-purpose AI models like ChatGPT. The phased implementation includes significant deadlines in early 2025 and August 2025, with some high-risk systems given until 2027 to comply.
EU opens new front with China over car chips
POLITICO
Pieter Haeck
The European Union is considering measures against Chinese semiconductor manufacturers to protect its car industry, amidst rising trade tensions over Chinese electric vehicle imports. The European Commission has surveyed European chipmakers like Infineon, NXP, and STMicroelectronics about Chinese competition and price differences. This follows concerns over Chinese subsidies causing market distortions, as highlighted in a May report. The EU may support new chip-making facilities in Europe to counteract these challenges. The industry worries that action against Chinese firms might disrupt supply chains, given Europe's reliance on Chinese-produced legacy chips. Survey results are expected by the end of the summer.
Dutch University Caught in Middle of US-China Chips War
Bloomberg
Cagan Koc
Eindhoven University of Technology, a key talent source for ASML Holding NV, is under scrutiny in the US-China chip war. The US has raised concerns over the number of Chinese students at the university, fearing they might access sensitive technology. This follows the Dutch government's restrictions on exporting ASML's advanced chip-making machines to China under US pressure. ASML has invested €80 million in the university for training and facilities. The university has implemented stringent screening measures for foreign students to protect its technological assets, balancing caution with the inclusion of international talent.
Germany’s Scholz set for rare meeting with Serbia’s isolated Vučić to finalize lithium deal
POLITICO
Hans von der Burchard, Sejla Ahmatović and Antonia Zimmermann
German Chancellor Olaf Scholz will visit Belgrade to sign a cooperation agreement between the EU and Serbia for importing critical minerals, including lithium, highlighting the EU's need for raw materials essential for electric vehicle production and marking Serbian President Aleksandar Vučić's return to political prominence despite his controversial past relations with Russia and China. Germany, as the EU’s largest carmaker, has a huge interest in securing lithium — especially within Europe to reduce its dependence on China
UK
Labour to introduce AI bill in King’s Speech
Financial Times
Anna Gross and Lukanyo Mnyanda
The new UK Prime Minister Keir Starmer is set to introduce an AI bill aimed at regulating advanced machine-learning models as part of Labour’s manifesto pledge. The bill, one of 35 in the King’s Speech, will focus on legal safeguards for large language models like OpenAI’s ChatGPT. This contrasts with former PM Rishi Sunak's approach, which avoided legal regulation to prevent stifling industry growth. Other proposed legislation includes reforms to worker protection, cyber security, and the abolition of hereditary peers in the House of Lords. Labour's agenda also features a state-owned energy investor, GB Energy, to boost renewable projects.
Big Tech
Huawei builds $1.4 billion Shanghai Center as chip war heats up
Bloomberg
Huawei Technologies Co. is nearing the completion of its largest global research and development center in Shanghai’s Qingpu district, which spans 1.6 million square meters and will accommodate around 30,000 personnel. The facility, which features its own road network, railway system, and elevated bridges, aims to drive advancements in semiconductors, wireless networks, and the Internet of Things. Despite ongoing US sanctions and export controls designed to hinder its progress, Huawei has managed to launch new 5G phones powered by advanced made-in-China chips and continues to push forward with significant investments, including the $1.4 billion required for this new center.
Kaspersky Lab closing US division; laying off workers
Zero Day
Kim Zetter
Russian cybersecurity firm Kaspersky Lab is closing its US operations and laying off employees following a US Commerce Department ban on the sale of its software, effective July 20. Despite initially planning to challenge the ban, Kaspersky decided to "gradually wind down" its US business due to non-viable business opportunities. The ban was prompted by national security concerns over potential misuse of Kaspersky software by the Russian government for espionage or sabotage. The decision follows earlier bans on Kaspersky's software in US federal and military systems. The company will also cease updates for existing U.S. users starting September 29, potentially reducing the software's effectiveness over time.
Qualcomm sues Chinese handset-maker in India to defend African market
The Register
Simon Sharwood
Qualcomm has filed a patent infringement lawsuit against Chinese smartphone maker Transsion in the High Court of Delhi, India. Transsion, known for its Tecno, Itel, and Infinix brands, is prominent in Africa and had a 9.9% global market share in Q1 2024. The lawsuit is notable as it is filed in India, a country familiar with Western legal systems and keen on protecting intellectual property to boost its electronics manufacturing sector. The court has agreed to hear the case and has given Transsion time to prepare its defense. Qualcomm's action highlights its ongoing efforts to protect its patents globally.
Artificial Intelligence
Apple, Nvidia, Anthropic used thousands of swiped YouTube videos to train AI
Proof Media
Annie Gilbertson and Alex Reisner
A Proof News investigation revealed that top AI companies, including Anthropic, Nvidia, Apple, and Salesforce, used subtitles from 173,536 YouTube videos without permission to train their AI models, violating YouTube’s terms of service. The dataset, named YouTube Subtitles, contained transcripts from educational channels like Khan Academy and Harvard, popular shows, and even conspiracy content. This unauthorized use of creators’ work has raised significant concerns about data misuse and the lack of compensation for content creators, who invest significant resources into their productions.
OpenAI promised to make its AI safe: Employees say it ‘failed’ its first test
The Washington Post
Pranshu Verma, Nitasha Tiku and Cat Zakrzewski
Last summer, OpenAI promised the White House to rigorously test new AI versions to prevent misuse. However, this spring, some team members felt pressured to rush the safety tests for the new GPT-4 Omni model to meet a May launch date. Despite concerns about prioritising commercial goals over safety, OpenAI conducted extensive tests and delayed some features to ensure safety. This situation highlights the need for robust AI safety standards and raises questions about the effectiveness of tech companies regulating themselves.
How Microsoft’s Satya Nadella became tech’s steely eyed AI gambler
The New York Times
Karen Weise and Cade Metz
Nadella sees AI as a crucial opportunity for Microsoft to dominate the tech industry. This strategy has been well-received by investors, contributing to a 70% increase in Microsoft's market value over the past two years. Earlier this year, Satya Nadella, CEO of Microsoft, made a surprising deal by acquiring Inflection AI, a Silicon Valley start-up led by Mustafa Suleyman, co-founder of DeepMind. Despite Inflection's lack of profitability and Suleyman's challenging reputation, Microsoft invested over $650 million to license its technology, hire its staff, and place Suleyman in charge of a major part of Microsoft's business. This move is part of Nadella's larger strategy of bold investments in artificial intelligence, including a $13 billion commitment to OpenAI.
Elon Musk couldn’t beat him, AI just might
WIRED
Jason Parham
A recent study by the Center for Countering Digital Hate has found that rage is profitable on social media platforms. Following the Israel-Hamas conflict, accounts spreading anti-Jewish and anti-Muslim content have gained significant followers on X, with the platform reportedly benefiting from advertisements displayed alongside these posts. Imran Ahmed, the Centre's founder, has been highlighting the monetisation of hate speech since 9/11 and advocates for holding tech companies accountable. The study underscores the risks of allowing tech companies to self-regulate and calls for stricter laws to safeguard the public from AI-generated misinformation and hate speech.
Misc
Record labels sue Verizon for not disconnecting pirates’ Internet service
ArsTechnica
Jon Brodkin
Major record labels Universal, Sony, and Warner have sued Verizon, alleging the Internet Service Provider knowingly continued to provide service to customers accused of music piracy despite receiving over 340,000 copyright infringement notices since 2020. The lawsuit, filed in the US District Court for the Southern District of New York, claims Verizon prioritised profits over legal obligations and failed to act against repeat infringers, including one subscriber linked to 4,450 infringement notices. The labels also criticised Verizon’s onerous conditions for filing complaints, making it difficult for copyright holders to report infringements.
Events & Podcasts
The Sydney Dialogue
ASPI
The Sydney Dialogue was created to help bring together governments, businesses and civil society to discuss and progress policy options. We will forecast the technologies of the next decade that will change our societies, economies and national security, prioritising speakers and delegates who are willing to push the envelope. We will promote diverse views that stimulate real conversations about the best ways to seize opportunities and minimise risks.
Jobs
Director of Cyber, Technology & Security (CTS)
ASPI
ASPI is looking for an exceptional and experienced senior leader to lead our largest team focused on emerging security challenges in the Indo-Pacific. This is an exceptional opportunity for a talented senior leader to contribute to the work of one of the Indo-Pacific’s top think-tanks with a focus on emerging security issues, and our region. The role provides a unique opportunity for a strategic and creative leader to drive the team’s evolution and to continue influencing public policy making in Australia and across the globe. The role is responsible for the oversight and delivery of a wide range of data-driven research projects. The closing date for applications is 28 July 2024 – an early application is advised as we reserve the right to close the vacancy early if suitable applications are received.
Program Manager - Cyber, Technology & Security (CTS)
ASPI
The team has an exciting role for a talented and proactive individual to work with the CTS Director and Deputy Director on program and research coordination, strategic engagement and grants. This is a key role within the CTS team working with the Director, Deputy Director and Program Coordinator on project delivery, fundraising and coordination of team activities. The focus of the role is to help manage and support the individual researchers to collectively deliver projects, accurately, on time and in the most effective way to impact policy. The closing date for applications is 25 July 2024 – an early application is advised as we reserve the right to close the vacancy early if suitable applications are received.
The Daily Cyber & Tech Digest is brought to you by the Cyber, Technology & Security team at ASPI.