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CYBER-ATTACKS: THE NEXT-TECHNOLOGY GENERATION A FiRe 2023 Keynote Conversation with Gilman Louie, CEO & Co-Founder, America's Frontier Fund Hosted by Jody Westby, CEO, Global Cyber Risk Why Read: Financial attacks, information warfare, cyber warfare, identity theft. How to proactively navigate a world flooded with GPT4 fraud. ______ Jody Westby: Good morning. Gilman Louie. Thank you so much for joining us and being with us this morning. I'd like to give [the audience] a couple of highlights of Gilman's background. I encourage you to look at his bio [see below] - but just to set the context of our discussion this morning: Gilman is chairman of the National Intelligence University, he's chairman of the Federation of American Scientists, a member of the President's Intelligence Advisory Board and also the State Department's Foreign Affairs Policy Board, and he's been awarded numerous honors and medals from our intelligence community. So, thank you for that. Gilman is not here representing US government or any role in that capacity. So, anything he says are his personal views today. Gilman, as a schoolboy, you were fascinated with games. I remember you told me that one of your teachers said to you one day: "Gilman, if all you're going to do is play games, you're never going to amount to anything." [Laughter] And yet you were ahead of the curve and emerged as one of Silicon Valley's successful gaming entrepreneurs before you came to In-Q-Tel as their first CEO - and the rest is history. And we thank you for everything you've done for our country in these years. But over the past 20 years, you've had this rare inside view into government role in innovation, the R&D process, innovation trends, and the threat environment - how it's changing and how that impacts our national security. We're going to talk about more than just cybersecurity this morning, but I would like to start with that, with our biggest disrupter, AI - it's also captured a lot of our attention in the last few days - as well as cybersecurity. Because we have the criminals in the nation-states using this to enhance their attack methods, but also to find new paths into systems. And now every vendor's claiming they're using AI so that they can better protect our systems. What do you think about this? Are we in a new era of cybersecurity? Or are the bad uses of AI going to outweigh the good? How do we keep that from happening? Gilman Louie: Well, you know, I think we should take a step back and think about how AI is beginning to affect every aspect of life. From healthcare to education to how we take pictures, or how we use our phones and talk to Siri, and a whole new wave of generative AI. It's just beginning to impact not only how we cope, but how we begin to interact with our machines and with each other. And it's just the very, very beginning. I had the advantage of sitting on the National Security Commission for Artificial Intelligence; it was a congressionally mandated study along with the White House. We did a three-year study on the impact of AI and the kinds of things that worried us the most, particularly if we're in a competitive nation-state situation with other countries - and economically, what does this really mean, as AI begins to be integrated in all aspects of life? I would say a few things: first, as governments relate to technology, particularly here in the United States, we - as a technologist, particularly from the San Francisco Bay Area - we tend to rewrite history, right? So we embrace the 1980s - the late '70s, early '80s - of Silicon Valley. It's Intel and Fairchild and Apple and Oracle and every company that kind of has emerged from that great ecosystem. What people forget is that that ecosystem was created back in the 1940s, when the US government invested money into that area to deal with electronic warfare and radar. And that brought a certain amount of talent to the region, and their kids' kids were the ones who kind of continued that revolution. And so there is a tight, tight relationship between the government's ability - not just the Department of Defense, but through the National Science foundations and many of the other programs - to fund basic technology and research that is foundational in building out all these capabilities. Tesla, Google, Oracle - all can point to their beginnings as a close relationship with the US government. JW: Microsoft, too. GL: Microsoft, too. JW: The 2023 National Defense Science and Technology Strategy was released recently, and they list 14 critical technologies. We've talked about many of them in the last couple days, but the Strategy noted: "Infused with private investment, companies around the world conduct research and development with dual-use commercial and defense applications. These changes in commercial markets have altered the dynamics for who creates cutting-edge knowledge and tools for the military and how countries access them." I found that fascinating. I haven't thought about globalization of R&D, but that's right. So, is it time now that we rein some of that in? How do we innovate in this globally competitive, highly geopolitical environment and yet protect our national security interests? GL: It's a great question. I mean, I think the thing that makes America special is that researchers and scientists from all over the world want to come here, right? And the reason we want to come here is because we practice good, basic science. Good, basic science is open. Technology and applications of technologies need to be protected, but the role of technology is to serve all humankind. It's not just a viewpoint, but it allows us to continue to push the ball forward. In fact, some would argue that too much technology, particularly on the science side - too much science that's "kept secret" - leads to a destabilization of the world. The Federation of American Scientists is a great example. How many here saw the Oppenheimer movie? It's a great movie. Now, the speaker at the end who kind of panned the nominee for the head of Commerce was the chairman of the Federation of American Scientists, right? And what the FAS scientists were saying is, "Look, if we let the genie out of the bottle, the only way to rein it in is for us to be very thoughtful about the applications of these sciences and technologies." And quite frankly, the world is really not particularly good at keeping secrets. I mean, look, the atomic bomb - it only took, like, two years for it to leak out, because the stakes are so high, and the rewards are equally high, for somebody to steal those kinds of pieces of science and technology. So if we're going to compete in a world of open science, and we believe in the economic engine - and by the way, those 14 technologies that are on our - really, America's list - it's the same 14 that the Chinese are working on. It's the same 14 that the Europeans are working on. It's the same 14 that are part of Japan's plans, India's plans, Israel's plans, the Saudis' plans, Brazil's plans . . . Everybody knows what's on that 14 list. So, in that world, in which all these nation-states are competing, how do we make sure that the US and our sensibilities are using these technologies and leading the way on appropriate uses of the technologies? The best way to do it is by example and by attracting talent to this country to build great companies, being mindful of the upsides and downsides of these technologies and the appropriate use of these technologies that serve the planet. I think in that model - where entrepreneurs, scientists, social scientists, and the public have a say, versus a model based on autocracy, where one individual gets to make all the calls - I just think ours is a better system. And in the long term, while there are days that it may look like that system is more efficient, I think we win out. JW: Yeah; yes. I mean, the universities are loath to do classified research because they want to have open research and open science and not discriminate among the students. But there's a time and a place for that. You know, I began my career practicing export control law, and then it kind of went away. I don't know about you, but over the last 20 years since you and I worked together, I've had a lot of companies approach me and say, "We don't know if we should be selling our technology globally." "Well, we better ask, check on that." "Naw, we don't care." And so the CEO would make a decision about whether to send it or not. GL: Yeah. JW: So then we had these export controls on the Li chips. And sort of a precursor was, you know, Huawei, ZTE - restrictions we put on that - and now some other communications-type equipments. Do you see this as a new trend? Are export controls back in style? Are we going to expand on that list of some of those 14 technologies, are we going to have a burdening basket of export controls? GL: It's always a challenge, right? I don't see a world where there are no export controls. It's not to any nation-state's national security interests to have: "Go ahead, let's put a weapons system that's out there that anybody can buy and anybody can use." You can only look at what's going on in Ukraine, and now what's happening in Gaza, [to see] how much commercial technology is impacting how we fight. You know, kids who race drones using commercial, off-the-shelf hobby kits are taking out multimillion-dollar systems. JW: Yes. GL: It's a very asymmetric world that we live in. I do believe in the current concept of "small yards and high fences" - that's the new Washington term. That is to say: "Protect those things that really, really, really matter." Don't overuse these toolsets, but use them where it's appropriate. On the chip side, I think the concern is, as we see what's happening, particularly in Ukraine: what happens if one side has access to high-performance semiconductors and the other side doesn't? JW: Yeah; yeah. GL: It is not a wonder, why washing-machine and dishwasher sales in Eastern Europe are way up right now. I don't think it's because there's a sudden surge for everybody to wash their dishes. I mean, literally, people are de-soldering chips out of consumer products to put back into weapons systems. So if you think forward, particularly around AI - I mean, I think there was a moment most experts thought that those who had the most data were going to win the AI war. So, because China has a different viewpoint on privacy and security, very much state-oriented, everybody thought they would be leading in AI. But it turns out, at least in this generation, compute is the thing that matters most. So, those Nvidia chips, those special chips that are being used by Google and some of the other scalers, are critical to make sure that your AI outperforms the other guy's AI, in a world in which systems - particularly intelligence systems and weapons systems and defense systems - are going to be driven by compute power: the "If I can think faster than you, if I can be 10% smarter than you, I'm going to win to fight" mindset, the old OODA Loop - you know, "Every move I make, I gain some more angles on you." That's just the reality. Look, we're not trying to prevent trade between nation-states. We want China's economy to be strong. Because an economy that's falling apart not only would have global ramifications, but it may cause kinds of behaviors we do not want to see. So, we want people to have stable trade. But we want to make sure the technologies are used appropriately in the areas where it really matters. So, it's like: small yards, take a handful of things, high fences, enforcement - together with a very aggressive policy to promote science and technology leadership on a global basis, I think is a good strategy to go forward. JW: Yeah. I'm wondering if the dogs in those yards are big or little dogs. [Laughter] GL: Big dogs. BIG. Big. [Laughter] JW: Just a week ago, the DoD issued its - this is a big name - 2023 Data Analytics and Artificial Intelligence Adoption Strategy. We were talking about the length of DoD titles yesterday. GL: DoD's acronyms are [stretching arms out full length]. [Laughter] JW: Deputy Secretary of Defense Kathleen Hicks noted in the report: "America's DNA is to innovate, and it has repeatedly enabled us to drive and master the future character of warfare." Wow. "Drive and master the future character of warfare." So now we have the Chinese. They want to use robotic soldiers because the "one baby" policy has left them without enough men for their million-man army. And we have these autonomous weapons and drones that have completely reshaped how we fight wars. So, with the planet in conflict - and right now, we're sort of on the sidelines; even though we're a supplier, we're on the sidelines - how do we use our innovation prowess to "drive and master" the shape of warfare? GL: Well, you know, warfare is just one - probably the most devastating - form of influence, right? Because warfare is really when everything else fails. So, it's when your diplomacy fails - when your inability to project a framework for appropriate operations; when all those systems fail - that you break down to warfare. Warfare is the extreme use of force to make somebody do something that they don't want to do. On the other side, by the way, is influence. And so, when we start talking about this issue around misinformation and disinformation as a part of influence campaigns, that's just the earliest phases of a way of forcing a population or a government to do something that it would not naturally do. I think, as we think about these technologies and how potential competitors and adversaries are using these technologies, it would be a mistake just to look at the kinetic side of the house. Quite frankly, if an adversary is winning on the influence campaign, winning on the cyber front, they may win the game even before the first shots are fired, right? And when you're down in the fight, you clearly want to make sure that your systems can operate, can talk to each other, can be trusted - that you have the maximum amount of information to make good decisions on the battlefield. But that battlefield is changing, because the battlefield now is in Crete, in Las Vegas, it's somebody who's flying a drone; it's somebody who used to be a student, hiding behind a bush, flying a little remote device with a bomb on the other end. That spectrum is very, very different. And particularly with the application of AI; that AI will change the complete nature, but it will continue to move left of the fight. These technologies will be used to win the war before the first shot is fired. JW: We really are talking about different warfare. GL: It's a very different warfare. It's kind of ironic; we kind of go back to Sun Tzu. [Laughter] It's like, gee, you know, wow - you reread Sun Tzu in the context of today's technology, and you can kind of get a sense of what warfare is becoming more and more like, and what future forms of influence and use of force will be like, as these technologies become more and more mature. JW: The disinformation, I think, is one of the most dangerous things going on. I view it as kind of the perfect crime. Like Trump used a lot of the Cambridge Analytica data to influence voters to vote for him. That's perfectly legal. But what's not legal is to have a foreign government involved. So, Russia, we know, is interfering in our elections. But how do you prove that some disinformation that they put out on the various platforms that people read changed that person's mind and the way they voted? You just can't prove it. It's a very new time. GL: Well, particularly with deep fakes. JW: Yes. GL: So . . . I think technology companies are mindful. There are lots of interesting things happening on the technology side. One of the big concerns when you look at a picture is, is it a real picture? We're seeing this playing out in Gaza right now, where AI is actually being used to generate a lot of imagery that causes deep emotional responses from individuals, as well as writing very compelling scripts. You know, from a generation, across the world, who can't write anymore, we rely more and more on generative AI to do this. What's interesting is that companies like Adobe and other organizations are beginning to think about: How do we prove that this picture, when I snapped the camera, was the original picture? So, we're seeing a lot of innovation happening to say, from the point of collection: Was that a real situation? And how can you prove it? It's a little bit of blockchain, it's a little bit of crypto, it's a little bit of watermarking, but we're going to see more and more growth in those areas to be "Is it real or is it Memorex?" for those old enough to remember what Memorex was. I think there's going to be a big push, because it's going to be harder and harder for the average citizen - and, quite frankly, even for our government - to figure out: Is this real, or is it fake? JW: Let's talk about supply chains - that's a big buzzword these days. The quadrilateral - this is a tongue twister - Quadrilateral Security Dialogue . . . GL: Just say "Quad." JW: . . . between the US, Japan, Australia, and India clearly has China bothered. You're heading up a Quad investment network of public-private sector people from those four countries. Can you tell us about that? And how is that going to impact chain security? GL: First of all, the Quad is an economic multilateral engagement across those four countries. I think people woke up one day and realized that if you just take the four nations and you add together their gross domestic product, which is about 37% of the world's output, it's more than two-and-a-half times that of China. It's not that we don't want to see - again, as I said earlier - China be successful economically, because they produce great goods and services. And they have a major role, as the second-largest economy in the world. But at the same time, there isn't a need to feel like you're held hostage by that. That's 's choice, right? Four countries - 37% GDP, gross domestic output, across those four countries - versus 17% to 18% for China. That's a choice we make. We make a choice when we say, "We are going to outsource all of our battery production to China. We make a choice when we say, "All of our critical healthcare pharma applications, baseline materials to create drugs, we're going to move it to China." "We don't want the messiness of processing rare earths, so we're going to move it to China." Those are choices we make. I think the four countries are saying: "Let's make some better choices." It's not just economic investment, but it's being very thoughtful about what the world is going to need in supply chains to make sure that supply chains are not in one place that creates a single point of failure. That's not to say that other countries can't be adequate or important suppliers. But to make one country the supplier - that's a huge risk, right? And it's not particularly smart. I think the four countries kind of woke up, and they also realized that unless we solve the capital markets problem, China is doing it for us in some weird way, by probably kind of poor economic policies. But you can't build an economic policy hoping that you're going to be successful because the other guy's policy is a race to the bottom. So, it's pretty exciting. When you see India getting excited about its prospects for being the economic growth engine globally in the 2030s to the 2040 time frame; when Japan is saying: "Hey, we can reemerge, we're the third-largest economy in the world, we have a voice to be [heard]"; and when you have a country like Australia saying: "Geographically, we are relevant, and we have something to bring to the table, particularly in supply chains and in technology," it's a message to the world. No one country can do it on its own. China cannot do it on its own. The US can't do it on its own. In fact, if you think economically, there are four major markets that matter. Pardon me - now, it doesn't mean that if you're not part of these four major markets you're not an important player. But any company out there needs to be in at least two of the four markets to be successful. Those markets are North America, the EU, China, and India. Two to four means you're a viable company. Three of the four means you're a leading company. Four of the four means you're a dominating company. That's where you have Apple and Volkswagen - some of the companies that, up to this particular moment in time, have been successful in those four markets. But I think the concern is if the world breaks apart and becomes bipolar, you're going to have to make a choice about which one of those four markets you may have to drop out of in order to be successful in the other three. JW: Yes. We have time for a couple of questions. If you have questions, please go up to the microphone so we can do that. In this time of great power competition, which you were just talking about, what's the one thing you would advise CEOs to do to get through this gracefully? GL: It's a great question. I think CEOs are wrestling with it. Number One: you can't hide anymore. JW: No. GL: That used to be a great strategy - you know, just hide, right? [Laughter] Don't make public statements, don't get anybody upset, try to play all sides . . . And today, as we heard from the [previous FiRe] session, it's impossible to hide. You're going to get called out. So, you have to take a position. The second thing I would say to executives, global executives: Technology is not neutral. I think we made the mistake in the 1980s of believing that technology was neutral. Remember that Apple 1984 Super Bowl ad, it was all black and white - it was supposed to be IBM, by the way - but that evil person on the front. They had a bunch of minions leaning forward, and it was a dark day; it was 1984. And this beautiful Olympian, who's in color - she comes down and throws the hammer through the screen. The ad tagline was: "Introducing the Apple Macintosh: you'll see why 1984 won't be like '1984'." Guess what we created? We created 1984. So, now we're living with the ramifications of our version of 1984. We're going to get a chance to redo it again, with AI. So, this time around, to all those CEOs, as well as to those on the research side and nation-state side, on the government side, is if technology is not neutral, then you have to take a position of how that technology is used. You can't blindly say: "You know what? Yes, my technology is used for surveillance and authoritarian invasions, but that's okay, because we're just selling tech." That's no longer acceptable anymore. If your technologies are found in systems that are killing civilians, that's not acceptable anymore. So, get out of the hiding mentality, take a leadership position, have your shareholders back that leadership position, and move forth and create technologies and technologies in the uses of technologies that are appropriate for the world. JW: Excellent answer. [Addressing audience] Marc? Marc Raimondi, Chief of Staff, Silverado Policy Accelerator: Well, first of all, thank you, Gilman, for being here. And just for the rest of you: Gilman is the one person I know that is equally respected and revered in both Washington and Silicon Valley. So it's a real treat to have you here. Thank you. And you've taught me most of what I do know about these topics in our past engagements. I want to ask you your opinion on the microprocessor question. We [at Silverado] came out with a report a couple weeks ago, showing that while the administration is doing a good job cracking down on the sub-28-nanometer, the high-end chips, we're just not doing enough to protect the legacy, or what we call "foundational" chips, above 28 nanometers, and China is really running away with it. They have more fabs under construction than anywhere else in the world; they have put hundreds of billions of dollars into that. Does that concern you, that they are dropping the prices of these 30%, in some of the markets they're competing in, in an effort to do what they did with many other critical supply chains? GL: I think people, as you rightly point out, forget the importance of 40-nanometer and larger chips - which, by the way, are the things that we ran out of in order to produce your F-150 trucks. It wasn't the 5-nanometer and 7-nanometer chips. So, again: two choices we make. One of the problems we have on a global scale is everybody wants to chase the shiny object. The "shiny objects" are the 2- to 3-nanometer fab plants. We globally have to solve the supply-chain choke points of the legacy chipsets. Now, behavior that undercuts or replaces is historic, right? Every nation-state who's trying to ascend has practiced that game. But again, the reason why these multilateral alliances are so important is so that we can prevent what took place in American solar. Americans led the technology in solar cells. But we allowed ourselves in a world in which a nation-state was able to use nation-state strategy to displace American companies and technologies. It wasn't just the theft - which was bad enough - of the technologies. It's the fact that when you actually think about it, you might feel really good about putting a solar panel up on your roof because you feel like, "Hey, I'm green; I'm moving the ball forward and protecting the world against climate." But if you're putting a Chinese solar-cell panel up there, that panel was made by burning three years of coal - in other words, it takes three years of coal burning that they use to manufacture that one panel of the energy equivalent output. And so, on the chip side, we can't be in that situation. China will continue to be an important supplier of those legacy chips, but they can't be the only supplier of those chips. And we have to be much more aggressive internationally about patent enforcement and trade secrets. JW: Yeah; yeah. And dumping. Lowering the prices below that is dumping. Thank you, Gilman, again, for coming. GL: Thank you. It's great to be here.
About Gilman Louie Gilman Louie is the CEO and co-founder of America's Frontier Fund. He has over 30 years of national security and investment experience. He served as an early CEO of In-Q-Tel - the pioneering technology investment firm funded by the CIA (1999-2006), as an expert to the Defense Innovation Board (2016-20), and as a commissioner on the National Security Commission on Artificial Intelligence (2018-21). In addition to being a co-founder and partner at Alsop Louie Partners, Gilman is a co-founder and CEO of the America's Frontier Fund. Gilman is currently chair of the National Intelligence University and the Federation of American Scientists and a member of the President's Intelligence advisory board and the US Department of State's Foreign Affairs policy board. He serves on numerous other commercial and advisory boards, including Maxar Technologies, Niantic, and Aerospike and the nonprofit Markle Foundation and Federation of American Scientists. He has also served on the Diversity Senior Advisory Panel for the Intelligence Community and as a member of the Technology Advisory Group to the Senate Select Committee on Intelligence. Gilman is the recipient of the CIA Agency Seal Medallion (2004), the CIA Director's Award (2006), the Agency Seal Medallion (2006), and the Director of National Intelligence Medallion (2008). He received his BS in business administration from San Francisco State University, where he graduated magna cum laude.
About Jody R. Westby Drawing upon a unique combination of more than 20 years of technical, legal, policy, and business experience, Jody Westby, Esq., founded Global Cyber Risk LLC (GCR) in 2000. GCR provides first-tier advisory and technical services to organizations in the areas of cyber governance, privacy, cybersecurity, incident response, and digital asset inventories and data mapping. Her team has deep expertise in cybersecurity risk assessments against best practices and standards, including industrial control and SCADA systems used in manufacturing, utility grids, and critical infrastructure sectors. Jody also is a professional blogger for Forbes and writes a regular column for Leader's Edge magazine on cybersecurity issues. Jody is a member of the bars of the District of Columbia, Pennsylvania, and Colorado. She serves as chair of the American Bar Association's (ABA) Privacy and Computer Crime Committee (Science & Technology Law Section) and co-chair of the Cybercrime Committee (Criminal Justice Section) and has served four terms on the ABA President's Cybersecurity Task Force. She co-chaired the World Federation of Scientists' Permanent Monitoring Panel on Information Security and served on the ITU Secretary-General's High Level Experts Group on Cybersecurity. Jody is the author of seven books, all published by the American Bar Association. Her latest publication, D&O Guide to Cyber Governance: Fiduciary Duties in the Digital Age, builds on her 15 years of experience in the governance of cyber risks and widely recognized series of governance surveys and reports. She led the development of the International Toolkit on Cybercrime Legislation and was editor and co-author of the 2010 UN publication "The Quest for Cyber Peace." Previously, she launched In-Q-Tel for the CIA, was senior managing director at PricewaterhouseCoopers, was senior fellow and director of IT Studies for the Progress and Freedom Foundation, and was director of domestic policy for the US Chamber of Commerce. Jody practiced law at Shearman & Sterling and Paul, Weiss, Rifkind, Wharton & Garrison. Jody earned a BA, summa cum laude, from the University of Tulsa and a JD, magna cum laude, from Georgetown University Law Center and was named to the Order of the Coif. She is also a selected member of the American Bar Foundation and the Cosmos Club.
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I would like to thank Sally Anderson for serving as transcriber, and for making this just right, as always. Your comments are always welcome.
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