Microsoft has announced plans to provide Apple iOS devices to its employees in China so they can access authentication apps due to the unavailability of Google’s Android services in the country. This move, part of Microsoft’s global Secure Future Initiative, aims to mitigate security risks highlighted by recent breaches, including a high-profile hack by Russian hackers earlier this year.
Bloomberg News first reported that Microsoft, starting in September, will instruct its employees in China to use Apple devices at the workplace. The decision is driven by the absence of the Google Play Store in China, which limits employees’ access to essential security apps like Microsoft Authenticator and Identity Pass.
A Microsoft spokesperson confirmed the shift, emphasising the need for reliable access to required security apps. The company, which has operated in China since 1992 and maintains a significant research and development centre there, will provide iPhone 15 models to employees currently using Android handsets across China, including Hong Kong.
Australia’s government cybersecurity agency has pointed fingers at a China-backed hacker group, APT40, for pilfering passwords and usernames from two undisclosed Australian networks back in 2022. The Australian Cyber Security Centre, in collaboration with leading cybersecurity agencies from the US, Britain, Canada, New Zealand, Japan, South Korea, and Germany, released a joint report attributing these malicious cyber operations to China’s Ministry of State Security, the primary agency overseeing foreign intelligence. Despite these claims, China’s embassy in Australia refrained from immediate comments on the matter, dismissing the hacking allegations as ‘political manoeuvring’.
The accusations against APT40 come in the wake of previous allegations by US and British officials in March, implicating Beijing in a large-scale cyberespionage campaign that targeted a wide range of individuals and entities, including lawmakers, academics, journalists, and defence contractors. Moreover, New Zealand also reported on APT40’s targeting of its parliamentary services and parliamentary counsel office in 2021, which resulted in unauthorised access to critical information.
In response to these cyber threats, Defence Minister Richard Marles emphasised the commitment of the Australian government to safeguard its organisations and citizens in the cyber sphere. The attribution of cyber attacks marks a significant step for Australia, signalling its proactive stance in addressing cybersecurity challenges. The timing of this report is noteworthy as Australia and China are in the process of repairing strained relations following tensions that peaked in 2020 over the origins of COVID-19, leading to retaliatory tariffs imposed by Beijing on Australian exports, most of which have now been lifted.
The identification of APT40’s cyber activities stresses the persistent threat posed by state-sponsored hacker groups and the critical importance of robust cybersecurity measures to protect sensitive information and national security. The incident serves as a reminder of the importance of joint attribution networks and international cooperation in combating cyber threats.
The European Commission has initiated a consultation with the semiconductor industry to gather views on China’s expanded production of older-generation computer chips, known as legacy chips. The effort precedes two voluntary surveys targeting the chip industry and major chip-using firms, which are due in September. The Commission aims to assess the role of legacy chips in supply chains and explore potential joint measures with the US to address dependency and market distortion.
That move comes amid rising tensions between the EU and China as the European Union seeks to shield its industries from Chinese competition. Recently, the Commission imposed provisional tariffs of up to 37.6% on Chinese electric vehicles, signalling a potentially tougher stance towards Beijing. Chinese investment in legacy chip production, driven by state subsidies and US restrictions on advanced chips, has raised concerns in the West about long-term market implications and potential oversupply.
The Commission’s antitrust chief, Margrethe Vestager, hinted in April at a possible investigation into legacy chips after discussions with US officials. A detailed report released by the European Commission earlier this year highlighted the extensive support provided by the Chinese government to domestic firms across various sectors, including semiconductors. The new chip-focused surveys are broader in scope than previous US security-focused surveys, aiming to gather comprehensive data on chip sourcing, products, pricing, and competitive estimates.
Chinese Premier Li Qiang has called for global cooperation and a more open mindset in the field of AI amid growing competition between China and the United States. Speaking at the World AI Conference (WAIC) in Shanghai, Li emphasised the importance of international collaboration, noting that each country has unique strengths in AI technology, data, and markets.
China has made significant strides in generative AI, with the UN reporting that Beijing has led the filing of generative AI patents globally. The progress has sparked concern in the US and other nations, who worry about potential espionage uses of Chinese technology. In April, the US revoked licenses for some chip exports after unveiling a Huawei computer powered by Intel AI technology.
Premier Li urged the promotion of cross-border data movement, free trade of equipment, and infrastructure connectivity to foster AI development. He also highlighted the need for international cooperation to address the risks associated with rapidly advancing AI technology, advocating for the establishment of global AI regulations and technical standards.
A recent report indicates that China’s major venture capital investments increasingly focus on technology sectors that are aligned with government policies, such as AI and semiconductors. Despite an overall decline in funding, China accounted for 90% of global venture capital (VC) in the chip sector last year, investing $22.2 billion, more than double the $9.5 billion from 2022.
According to Preqin, a private investment data company, three significant deals, primarily involving partnerships between municipal authorities and Sino IC Capital, accounted for half of the semiconductor venture investments. Sino IC Capital manages the state-backed China Integrated Circuit Industry Investment Fund, also known as the Big Fund.
Overall, the report highlights three key takeaways. Firstly, China’s clean technology VC deals have surpassed those in the US in both value and volume for 2022 and 2023, especially in electric vehicles. Secondly, overall venture capital in Greater China has dropped sharply, a 42% decrease from the previous quarter, due to geopolitical tensions and fewer exit opportunities. Thirdly, foreign VC investments in Chinese firms have plummeted from $67 billion in 2021 to $19 billion in 2023, while domestic investments have remained stable.
Why does it matter?
The trend is clear evidence of the ongoing US-China tech supremacy war and the effect of US sanctions. With the US trade tariffs and restrictions on American venture capital firms prompting foreign investors to withdraw from the region, this report reveals how the Chinese government, in response, has stepped up and is backing state-funded entities to fill the void, with significant investments also coming from domestic tech companies.
China leads the world in generative AI patent requests, significantly outpacing the United States, according to the UN’s World Intellectual Property Organization (WIPO). The technology, which has surged in public awareness since late 2022, was linked to approximately 54,000 inventions over the past decade. More than a quarter of these were filed just last year, highlighting the rapid growth and interest in generative AI.
WIPO’s report, the first of its kind, aims to track trends in generative AI development through patent applications. Over 38,200 generative AI inventions originated from China in the past decade, far surpassing the nearly 6,300 from the USA. South Korea, Japan, and India followed with significantly fewer patents. Generative AI, which includes tools like ChatGPT, Google Gemini, and Baidu’s Ernie, is utilised across various industries, including life sciences, manufacturing, and telecommunications.
Despite the many patents, WIPO cautions that quantity does not equate to quality. It remains uncertain which patents will hold market value or have a transformative impact on society. While the US and China are often seen as rivals in AI development, US tech companies currently lead the production of cutting-edge AI systems. In 2023, US-based institutions produced 61 notable machine-learning models, compared to 21 from the EU and 15 from China. The US also leads in AI foundation models and private AI investments.
China’s Ministry of Industry has announced the inclusion of 20 cities, including Beijing and Shanghai, in a pilot initiative focused on ‘vehicle-road-cloud integration’ for intelligent connected vehicles. The program aims to establish a standardised and unified system by 2026, facilitating the deployment of smart-connected vehicles across the nation, according to a statement released by the ministry on Wednesday.
Why does it matter?
Recently, China announced increased policy support to accelerate the development of smart connected vehicles, which experts believe could make the country the world’s largest market for self-driving cars. As part of these efforts, the Ministry of Industry and Information Technology plans to allocate 100 million 11-digit mobile network numbers to enhance communication among vehicles and with back-end management systems. According to McKinsey & Co., projections estimate that China’s autonomous vehicle market could exceed $500 billion in revenue by 2030.
China’s government is working on developing standards for brain-computer interfaces. The Ministry of Industry and Information Technology announced plans to form a technical committee for this purpose. The committee will develop brain-computer interface standards for data encoding, communication, visualisation, electroencephalogram data collection, and applications in medicine, health, education, and entertainment while considering ethics and safety.
Members of the committee will come from relevant research institutions and government departments. Once the standards are set, Chinese researchers will be organised into clusters, all adhering to these new guidelines. The strategy aims to streamline efforts and allow China to set international standards before other countries, giving its local manufacturers an early advantage.
Why does it matter?
China has a history of trying to lead in international standards, as seen with Huawei’s 5.5G technology and its ambitions in IPv6 standards. While some efforts have failed, China continues to push for influence in standards bodies, which observers note can be susceptible to manipulation. Other bodies are already working to set standards on brain-computer interfaces, such as the Institute of Electrical and Electronics Engineers (IEEE) group on Neurotechnologies for Brain-Machine Interfacing. Moreover, private companies like Elon Musk’s Neuralink are also making strides in this field, which, if successful, might overshadow these standardisation efforts.
The UN General Assembly has adopted a resolution on AI capacity building, led by China. This non-binding resolution seeks to enhance developing countries’ AI capabilities through international cooperation and capacity-building initiatives. It also urges international organisations and financial institutions to support these efforts.
The resolution comes in the context of the ongoing technology rivalry between Beijing and Washington, as both nations strive to influence AI governance and portray each other as destabilising forces. Earlier this year, the US promoted a UN resolution advocating for ‘safe, secure, and trustworthy’ AI systems, gaining the support of over 110 countries, including China.
China’s resolution acknowledges the UN’s role in AI capacity-building and calls on Secretary-General Antonio Guterres to report on the unique challenges developing countries face and provide recommendations to address them.
Microsoft is restructuring its retail strategy in mainland China, consolidating its retail channels amid reports of closing its network of authorised physical retailers. The tech giant did not confirm the closures or specify the number of stores affected but emphasised the need to adapt to changing customer needs.
Microsoft assured its products would remain available in China through retail partners and its website despite not operating physical stores directly in the region. However, the company did not detail which partners would continue to stock its products.
The change of strategy reflects Microsoft’s ongoing efforts to optimise its retail strategy in one of the world’s largest markets, ensuring accessibility and customer satisfaction through diverse channels, despite diplomatic and political challenges and restrictions.
