China’s AI military commander substitutes for human military leaders in simulated war games hosted by the Joint Operations College of the National Defence University, amidst growing tensions with the US over the use of militarised AI in combat. The bots, the first of their kind, are completely automated, possess the perception and reasoning skills of human military leaders, and are learning at an exponential rate. They have also been programmed to illustrate the weaknesses of some of the country’s most celebrated military leaders such as General Peng Dehuai, and General Lin Biao.
The AI arms race between the two countries can be likened to the chicken and egg analogy, in that both countries have expressed interest in regulating the use of these unmanned implements on the battlefield; yet, there are increasing media coverage of either on-going experiments or caged prototypes in both countries. These include the rifle-toting robot dogs, and surveillance and attack drones, some of which reportedly have already been used in battlefields in Gaza and in the Ukraine. The situation renders international rule-making in the space increasingly difficult, particularly as other players, such as NATO seek to ramp up investments in tech-driven defence systems.
A US official is heading to Japan following discussions with the Dutch government to strengthen efforts to limit China’s semiconductor production capabilities. Alan Estevez, the US export policy chief, aims to build on a 2023 agreement between the USA, Japan, and the Netherlands to prevent China from accessing advanced chipmaking equipment, which could enhance its military.
US officials have had ongoing discussions with allies, including visits to the Netherlands, to prevent ASML from servicing certain equipment in China. While ASML expects to service most of its equipment sold to China, US rules prevent using American spare parts.
The Chinese Embassy in Washington did not respond to requests for comment.
Lawmakers criticised Microsoft for failing to prevent these cyberattacks, which exposed federal networks to significant risk. They highlighted a report by the Cyber Safety Review Board (CSRB) that condemned Microsoft for lack of transparency regarding the China hack, labelling it preventable. Smith acknowledged the report’s findings and stated that Microsoft acted on most of its recommendations. He emphasised the growing threat posed by nations like China, Russia, North Korea, and Iran, which are increasingly sophisticated and aggressive in their cyberattacks.
During the hearing, Smith defended Microsoft’s role, saying that the US State Department’s discovery of the hack demonstrated the collaborative nature of cybersecurity. However, Congressman Bennie Thompson expressed dissatisfaction, stressing that Microsoft is responsible for detecting such breaches. Given its substantial investments there, panel members also inquired about Microsoft’s operations in China. Smith noted that the company earns around 1.5% of its revenue from China and is working to reduce its engineering presence in the country.
Despite facing significant criticism over the past year, some panel members, including Republican Congresswoman Marjorie Taylor Greene, commended Smith for accepting responsibility. In response to the CSRB’s findings, Microsoft has pledged to prioritise security above all else, launching a new cybersecurity initiative in November to bolster its defences and ensure greater transparency moving forward.
The Dutch military intelligence and security service (MIVD) has raised alarms over a global Chinese cyber-espionage campaign, that successfully targeted ‘a significant number of victims’, including Western governments, international organisations and the defense industry. The Netherlands’ National Cyber Security Centre (NCSC) provided the details of this operation in the warning sharing how state-sponsored hackers exploited a vulnerability in FortiGate devices for ‘at least two months before Fortinet announced the vulnerability.’
This vulnerability, identified as CVE-2022-42475, was leveraged during a ‘zero-day period’ to compromise around 14,000 devices in Netherlands. In particular, the warning says that the had successfully breached the internal computer network of the Dutch Ministry of Defence. After gaining access, the hackers deployed a remote access trojan (RAT) named COATHANGER to perform reconnaissance and exfiltrate user account information from the Active Directory server. It, however, remains unclear how many of these systems were infected with the COATHANGER malware. The MIVD warned that identifying and removing these infections is particularly challenging.
“The NCSC and the Dutch intelligence services therefore state that it is likely that the state actor still has access to systems of a significant number of victims,” the report cautioned, emphasizing the ongoing threat posed by this extensive cyber-espionage campaign.
China’s Ministry of Commerce has announced draft rules aiming to expand e-commerce businesses that trade across borders, including promoting the construction of overseas warehouses. E-commerce companies will be supported by national ministries and government departments, helping them ‘go global’, the ministry said. Beyond spreading its reach outwards, the draft rules aim to regulate inbound trade by improving data management and optimising export supervision as well.
Why is this important?
These draft rules come at a crucial point when local e-commerce has been facing a more general macroeconomic slow down, and when cross-border trade has been growing exponentially. That same growth has pushed regulators beyond China to consider stricter rules for large e-commerce firms. The EU has recently done so against online marketplace Temu.
Chinese AI chip firms, including industry leaders such as MetaX and Enflame, are downgrading their chip designs in order to comply with Taiwan Semiconductor Manufacturing Company’s (TSMC) stringent supply chain security protocols and regulatory requirements. This strategic adjustment comes amidst heightened scrutiny and restrictions imposed by the US on semiconductor exports to Chinese companies, which includes limitations on accessing advanced manufacturing technologies critical for AI chip production.
The US has imposed strict export controls to obstruct China’s military advancements in AI and supercomputing. These controls include restrictions on sophisticated processors from companies like Nvidia, as well as on-chip manufacturing equipment crucial for advanced semiconductor production. That move has prevented TSMC and other overseas chip manufacturers using US tools from fulfilling orders for these restricted technologies.
In response to these restrictions, top Chinese AI chip firms MetaX and Enflame have reportedly submitted downgraded chip designs to TSMC in late 2023. MetaX, founded by former Advanced Micro Devices (AMD) executives and backed by state support, had to introduce the C280 chip after its more advanced C500 Graphic Processing Unit (GPU) ran out of stock in China earlier in the year. Enflame, also Shanghai-based and supported by Tencent, faces similar challenges.
Why does it matter?
The decision to downgrade chip designs to meet production demands reflects the delicate balance between technological advancement and supply chain resilience. While simplifying designs may expedite production and mitigate supply risks in the short term, it also raises questions about long-term innovation and competitiveness. The ability to innovate and deliver cutting-edge AI technologies hinges on access to advanced chip manufacturing processes, which are increasingly concentrated among a few global players.
China has unveiled an AI chatbot based on principles derived from President Xi Jinping’s political ideology. The chatbot, named ‘Xue Xi’, aims to propagate ‘Xi Jinping Thought’ through conversational interactions with users. Xi Jinping Thought, also known as ‘Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era‘, is made up of 14 principles, including ensuring the absolute power of the Chinese Communist Party, strengthening national security and socialist values, as well as improving people’s livelihoods and well-being.
Developed by a team at Tsinghua University, ‘Xue Xi’ utilises natural language processing to engage users in discussions about Xi Jinping’s ideas on governance, socialism with Chinese characteristics, and national rejuvenation. The chatbot was trained on seven databases, six of which were mostly related to information technologies provided by China’s internet watchdog and the Cyberspace Administration of China (CAC).
The chatbot’s creation is the latest effort of a broader strategy to spread the Chinese leader’s ideology and an attempt to leverage technology, strengthen ideological education and promote ideological loyalty among citizens. Students have had to take classes on Xi Jinping’s Thoughts in schools, and an app called Study Xi Strong Nation was also rolled out in 2019 to allow users to learn and take quizzes about his ideologies.
Why Does It Matter?
The launch of Xue Xi raises important questions about the intersection of AI technology and political ideology. It represents China’s innovative approach to using AI for ideological dissemination, aiming to ensure widespread adherence to Xi Jinping Thought. By deploying AI in this manner, China advances its technological capabilities and seeks to shape public discourse and reinforce state-approved narratives. Critics argue that such initiatives could exacerbate issues related to censorship and surveillance, potentially limiting freedom of expression and promoting conformity to government viewpoints. Moreover, the development of ‘Xue Xi’ underscores China’s broader ambition to lead in AI development, positioning itself as a pioneer in using technology for ideological governance.
AI is making significant strides in the healthcare sector, with Chinese researchers developing an AI hospital town that promises to revolutionise medical training and treatment. Dubbed ‘Agent Hospital’, this virtual environment, created by Tsinghua University researchers, features a large language model (LLM)-powered intelligent agents that act as doctors, nurses, and patients, all capable of autonomous interaction. These AI agents can treat thousands of patients quickly, achieving a 93.06% accuracy rate on medical exams. This innovative approach aims to enhance the training of medical professionals by allowing them to practice in a risk-free, simulated environment.
The AI hospital town not only offers advanced training opportunities for medical students but also has the potential to transform real-world healthcare delivery. The AI hospital can provide valuable insights and predictions by simulating various medical scenarios, including the spread of infectious diseases. The system utilises a vast repository of medical knowledge, enabling AI doctors to handle numerous cases efficiently and accurately, paving the way for high-quality, affordable, and convenient healthcare services.
While the future of AI in healthcare appears promising, significant challenges remain in implementing and promoting AI-driven medical solutions. Ensuring strict adherence to medical regulations, validating technological maturity, and developing effective AI-human collaboration mechanisms are essential to mitigate risks to public health. Experts emphasise that despite the impressive capabilities of AI, it can only partially replace the human touch in medicine. Personalised care, compassion, and legal responsibilities are aspects that AI cannot replicate, highlighting the indispensable role of human doctors in healthcare.
A Chinese nonprofit organisation linked to the government is reportedly coordinating efforts among major tech firms in China to develop open-source software with potential military applications, according to a report from the Jamestown Foundation, a US-based defence policy group. The OpenAtom Foundation oversees the development of open-source operating systems, including OpenHarmony, a variant of Huawei’s Harmony OS that was developed after the company faced US sanctions.
OpenAtom’s efforts extend beyond civilian use, with initiatives to develop alternatives to US technologies for defence applications, such as satellite systems. The foundation led the adaptation of OpenHarmony for Chinese satellites, which was launched in the previous year and is capable of capturing high-resolution images at a low cost.
Sunny Cheung from the Jamestown Foundation highlights OpenAtom’s pivotal role in China’s strategy for technological self-reliance, noting that many of its leaders have ties to the Chinese Ministry of Industry and Information Technology, and a significant portion of its staff are affiliated with the Chinese Communist Party. However, China’s foreign ministry declined to comment on these allegations.
While most of OpenAtom’s sponsors are Chinese firms like Alibaba and Tencent, US chipmaker Intel is also involved. Intel emphasised its commitment to fostering an open ecosystem strategy globally. The Jamestown Foundation suggests that the US should consider promoting its own open-source software initiatives to prevent China from gaining an advantage in this domain, which has largely been left to the private sector until now.
Taiwanese authorities have accused Luxshare Precision Industry, a Chinese Apple supplier, of illegally operating in Taiwan and attempting to poach tech talent. The Ministry of Justice Investigation Bureau identified Luxshare as one of eight companies from China engaging in these illegal activities but provided no further details. The crackdown is part of Taiwan’s broader efforts to protect its high-tech industry from Chinese firms trying to steal expertise and talent.
Additionally, the investigation bureau named Zhejiang Dahua Technology, a video surveillance equipment maker blacklisted by the US in 2019 for its role in the treatment of Muslim minorities in Xinjiang. Zhejiang Dahua allegedly set up covert operations in Taiwan and attempted to obscure its activities by listing employees under a different company name. Both Luxshare and Zhejiang Dahua have not responded to these accusations.
Taiwan, home to semiconductor giant TSMC and a leader in advanced chip manufacturing views these Chinese efforts as a significant threat to its technological edge. The bureau emphasised its commitment to cracking down on illegal operations and talent poaching, warning that it will enforce the law resolutely. This announcement follows a sweep conducted earlier this month targeting suspected illegal activities by Chinese tech firms.
