News of the Cyber World

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5 VC Firms Invested $3 Billion in Chinese AI and Semiconductors

Five U.S. venture capital firms have invested more than $3 billion in critical technology projects in communist China, according to the results of a congressional investigation.

That sum includes direct investments into companies with ties to China’s military, surveillance apparatus, and ongoing human rights abuses in Xinjiang.

The findings stem from a bipartisan investigation into U.S. venture capital funding in China by the House Select Committee on Strategic Competition with the Chinese Communist Party (CCP).

These firms’ investments directly aided the CCP’s strategic goals against the United States, according to a Feb. 8 select committee statement shared with The Epoch Times.

“The lawmakers found that these firms invested at least $3 billion in, and provided expertise and other benefits to, People’s Republic of China (PRC) critical technology companies, including many aiding the Chinese military, surveillance state, or the CCP’s genocide in Xinjiang,” the statement reads.

The select committee’s report, also shared with The Epoch Times, details the investigation into investments made by GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital China, and Walden International.

The committee specifically investigated the five firms’ investments in two sectors: artificial intelligence (AI) and semiconductors.

“Both technologies have civilian and military applications,” the report states. “Both will drive the future of war-fighting, and both are necessary components of the Chinese Communist Party’s (CCP) Orwellian surveillance state and human rights abuses.”
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The vast bulk of the investments, totaling some $1.9 billion, was made to Chinese AI firms, according to the report. Another $1 billion went to semiconductor corporations, including those owned by the state.
Of that, some $190 million went into AI companies that are now blacklisted by the U.S. government for directly supporting the PLA, and another $140 million went to AI companies with known links to the PLA.

“U.S. investments were critical to the early growth and success of some of the PRC’s largest and most notorious AI and semiconductor companies, many of which are now blacklisted by the U.S. government over national security concerns, and many of which are supported by the PRC government,” the report states.

Importantly, the investigation found that the investments advanced the strategic goals of the CCP while directly undercutting the United States’ position internationally, according to the report.

This article mentioned some sanctions imposed by the US government on New Year's Eve. Here's the related article on that topic.

Pentagon Blacklists New Chinese Tech Firms Linked to Chinese Military

The Pentagon on Jan. 31 added over a dozen Chinese tech firms to its backlist of companies with ties to the Chinese military.

Among new companies added include memory chip maker YMTC, artificial intelligence company Megvii, drone maker Chengdu JOUAV, lidar maker Hesai Technology, and tech company NetPosa, according to the Department of Defense (DOD).

Updating the list is “an important continuing effort in highlighting and countering” the Chinese Communist Party’s military-civil fusion strategy, the Pentagon stated in a press release.

This “strategy supports the modernization goals of the People’s Liberation Army (PLA) by ensuring it can acquire advanced technologies and expertise” developed by Chinese companies, universities, and research programs that appear to be civilian entities, the DOD added.

The latest additions have brought the total to over 70 Chinese firms on the list designated by the United States as Chinese military companies. The list has already included major Chinese companies, such as Huawei, chipmaker SMIC, aviation company AVIC, BGI Genomics Co, China Mobile, energy company CNOOC, and China Railway Construction Corp.

The designation is required by Section 1260H of the National Defense Authorization Act, which directs the Secretary of Defense to update a list of Chinese military companies annually until Dec. 31, 2030. The Pentagon started the list in June 2020.

Earlier, on Jan. 29, GOP senators sent a letter to Secretary of Defense Lloyd Austin, pushing the DOD to publish the list. The letter raised concerns over DOD’s failure to release the list as required. It also asked the Pentagon to “update on the process for determining how the Department of Defense develops, updates, and publishes the list.”

For some reason, we didn't learn about this updated list till early February 2024.

OpenAI Boss Sam Altman Seeks *Trillions* to Fund AI Chip Production

The Wall Street Journal reports that OpenAI CEO Sam Altman is in talks with investors, including the United Arab Emirates government, to raise massive amounts of capital for a project aimed at boosting the world’s ability to produce AI chips. The initiative could require accumulating between $5 and $7 trillion, according to sources familiar with the matter.

The fundraising plans are intended to solve constraints to OpenAI’s growth, particularly the limited supply of graphics processing units (GPUs) needed to train large AI models like ChatGPT. Altman has complained there simply aren’t enough GPUs available to power OpenAI’s quest for artificial general intelligence.

Realizing Altman’s goals would require convincing governments, industry partners, and investors around the globe to participate. So far, Altman has met with the UAE’s Sheikh Tahnoun bin Zayed al Nahyan, SoftBank CEO Masayoshi Son, and chipmakers like Taiwan Semiconductor Manufacturing Co. (TSMC).

Under the current vision, investors would provide capital to build new chip foundries that would be operated by existing manufacturers and OpenAI would be a major customer, buying large volumes of chips from the new plants. The effort would likely utilize substantial debt financing and could take years to come to fruition.

The amount of investment required would eclipse the current size of the semiconductor industry. TSMC, a potential partner, is aware of the plans and open to participation if allowed by the U.S. government, which considers domestic chip production strategically important. Altman has also discussed the idea with Microsoft CEO Satya Nadella, whose company relies on AI advances to drive growth. Microsoft already provides the computing power for OpenAI’s AI development.

Instagram, Threads to Stop Recommending Political Content

Mark Zuckerberg’s Instagram and Threads will no longer recommend political content on their social media platforms, the company announced on Friday. Zuckerberg’s latest move to control the national conversation will include attempting to quiet down the popular Breitbart News Instagram account.

“If you decide to follow accounts that post political content, we don’t want to get between you and their posts, but we also don’t want to proactively recommend political content from accounts you don’t follow,” Instagram announced in a Friday press release.

The Meta-owned social media platform suggested that this change is being made because, “We want Instagram and Threads to be a great experience for everyone.”

Instagram added that the change is also an extension to “our existing approach to how we treat political content.”

“We don’t proactively recommend content about politics on recommendation surfaces across Instagram and Threads,” the company said. “If you still want these posts recommended to you, you will have a control to see them.”

The areas of Instagram that will be affected by this change are Explore, Reels, In-Feed Recommendations and Suggested Users, the social media platform said.

Instagram added that this will not affect how users are shown content from accounts they have chosen to follow.

“If political content — potentially related to things like laws, elections, or social topics — is posted by an account that is not eligible to be recommended, that account’s content can still reach their followers in Feed and Stories,” Instagram explained.

The company also noted that professional accounts will be able to “check their eligibility to be recommended based on whether they recently posted political content,” and are encouraged to “edit or remove recent posts, request a review if they disagree with our decision, or stop posting this type of content for a period of time,” if they want to be “eligible” for recommendation again.

 How dare they! Now you as a content creator have to adapt to their policies on political content to be recommended by their systems! That's blatant case of manipulation by Meta!

If Joe Biden Can’t Win in 2024, Maybe AI Can Win for Him

This is an opinion piece based of a couple of Microsoft's recent publications available online.

A February 5 headline from Microsoft’s own site sends the signal: “Here’s how we’re working with journalists to create the newsrooms of the future with AI.” That’s the intended future: The marriage of Big Tech and Big Journalism, with a hybrid offspring coming soon to a screen near you.

Highlighting new “partnerships” with various publications and non-profits, Microsoft tells us, “We are helping these organizations identify and refine the procedures and policies to use AI responsibly in newsgathering and business practices,” adding that the goal is to “identify ways AI can help create efficient business practices and help build sustainable newsrooms for generations to come.”
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Yet, so far, at least, AI journalism has not been a success. Most obviously, reporters realize that AI could send them down the same automated chute as bobbin turners and hod carriers. So they’ve been calling out AI when it’s gotten too flagrant, as in the recent case of Sports Illustrated. That was a victory for journos, although, of course, soon thereafter, the publication shut down.

Without a doubt, the cost-cutters and spread-sheeters will keep slicing, and at the same time, AI will keep improving, even if it might always have problems in the uncanny valley.

According to Wikipedia, the uncanny valley hypothesis predicts that an entity appearing almost human will risk eliciting eerie feelings in viewers.

Yet Microsoft charges ahead, unspooling a slew of botwords—“responsible,” “sustainable,” “efficient”—that seem half cyborg. Of course, it’s all a cloak for the woke. Such wokeness should be no surprise, given that AI is being built in places such as Seattle and San Francisco. (This blue-state-origin problem will be endemic until red states figure out how to make their own AI.)

This announcement from Microsoft is not just about the news business in general. It is also about “democratic elections worldwide.” The Microsoft February 5 announcement makes this explicitly clear:

Today, Microsoft is launching several collaborations with news organizations to adopt generative AI. In a year where billions of people will vote in democratic elections worldwide, journalism is critical to creating healthy information ecosystems, and it is our mission, working with the industry, to ensure that newsrooms can innovate to serve this year and in the future.

How convenient for President Joe Biden and the Democrats that Microsoft is creating this “healthy information ecosystem” in time for the 2024 election.

Prince Harry Settles Tabloid Phone Hacking Claim With British Newspaper

Prince Harry said Friday that his “mission” to rein in the British media continues, after he accepted costs and damages from a tabloid publisher that invaded his privacy with phone hacking and other illegal snooping.

Harry’s attorney, David Sherborne, said at a court hearing that Mirror Group Newspapers had agreed to pay all of the prince’s legal costs, plus “substantial” damages, and would make an interim payment of 400,000 pounds ($505,000) within 14 days. The final tab will be assessed later.

Harry said he had been vindicated, and vowed: “Our mission continues.”

“We have uncovered and proved the shockingly dishonest way in which the Mirror acted for so many years, and then sought to conceal the truth,” the 39-year-old royal said in a statement read outside the High Court in London by his lawyer.

Harry was awarded 140,000 pounds ($177,000) in damages in December, after a judge found that phone hacking was “widespread and habitual” at Mirror Group Newspapers in the late 1990s, went on for more than a decade and that executives at the papers covered it up. Judge Timothy Fancourt found that Harry´s phone was hacked “to a modest extent.”

The settlement avoids new trials over 115 more tabloid articles that Harry says were the product of hacking or other intrusions.

Mirror Group said in a statement that it was “pleased to have reached this agreement, which gives our business further clarity to move forward from events that took place many years ago and for which we have apologized.”

Harry´s case against the publisher of the Daily Mirror is one of several that he has launched in a campaign against the British media, which he blames for blighting his life and hounding both his late mother Princess Diana and his wife Meghan.

State Attorneys General Combat Joe Biden’s Move to Use AI to Censor ‘Disinformation’

The 20 attorneys general, led by Utah Attorney General Sean Reyes, said in a letter to Commerce Secretary Gina Raimondo:

The Executive Order seeks — without Congressional authorization — to centralize governmental control over an emerging technology being developed by the private sector. In doing so, the Executive Order opens the door to using the federal government’s control over AI for political ends, such as censoring responses in the name of combatting ‘disinformation.’

The Biden executive order sets new standards for artificial intelligence safety; the Biden administration said that the move would help protect Americans from fraud enabled by AI.

However, the attorneys general said the move established a “gatekeeping function” for the Commerce Department to oversee AI development and force developers to go through an “opaque and undemocratic process.”

“We are further concerned that the Executive Order’s bureaucratic and nebulous supervisory process will discourage AI development, further entrench large tech incumbents, and do little to protect citizens,” the attorneys general said.

A House Judiciary Committee report on Tuesday found that AI tools being developed by the Biden administration could be used to censor alleged disinformation on an industrial scale.

The Republican-led Judiciary Committee said the Biden administration is spending millions of dollars on AI tools to combat alleged misinformation, which could then be utilized by big tech companies.

Grants from the National Sciences Foundation are going to the Massachusetts Institute of Technology (MIT), the University of Wisconsin-Madison, and the University of Michigan for a program called “Trust & Authenticity in Communication Systems.”

Although the program could help remove child sex abuse material (CSAM) and deep fake photos, lawmakers such as House Judiciary Committee Chairman Jim Jordan (R-OH) believe these tools could be used by censor-happy platforms such as YouTube, Reddit, and Facebook to censor free speech.

Venture capitalist Marc Andreessen wrote last June how AI could be used to stifle free speech.

Multinational Firm Loses $25 Million to Sophisticated AI Deepfake Zoom Heist

CNN reports that the scam unfolded as the unsuspecting employee was invited into a video conference with individuals he believed were his colleagues. However following an investigation, the Hong Kong police discovered that the entire video call setup was fabricated using deepfake technology. Senior Superintendent Baron Chan Shun-Ching detailed to RTHK, Hong Kong’s public broadcaster, how the finance worker was tricked by artificial recreations of several senior executives, marking a new era in the sophistication of cyber fraud.

The employee was initially suspicious after receiving an email about a secretive transaction from the company’s UK-based CFO, but these doubts were put to rest during a video call. The deepfake representations were convincing enough to mimic the appearance and voice of known colleagues, leading the worker to authorize a transfer of approximately $25.6 million (200 million Hong Kong dollars).

This incident is part of a growing trend where criminals exploit deepfake technology to commit fraud. Hong Kong police announced the arrest of six individuals connected to similar schemes. From July to September of the previous year, these criminals utilized eight stolen Hong Kong identity cards to apply for 90 loans and register 54 bank accounts, employing AI deepfakes to deceive facial recognition systems on at least 20 occasions.

The fraudulent transaction was only uncovered after the employee verified the details with the company’s headquarters, leading to a police investigation. The identities of the company and the victim have not been disclosed by the authorities.