In a joint call by intelligence and counterintelligence leaders from the Five Eyes nations last Tuesday, Beijing was accused of engaging in theft of intellectual property on an “unprecedented” scale. The Five Eyes, consisting of Australia, Canada, New Zealand, the United Kingdom, and the United States, called on industry and universities to assist in countering this threat of Chinese espionage.
Chinese espionage targeting industrial and academic research is nothing new. FBI Director Christopher Wray stated that China has long employed various techniques such as cyber intrusions, human intelligence operations, and seemingly innocuous corporate investments to target businesses. According to Mike Burgess, the Director-General of the Australian Security Intelligence Organization, the Chinese government is engaged in the most sustained, scaled, and sophisticated theft of intellectual property in history.
The Chinese embassy in Washington dismissed the allegations as baseless, expressing its firm opposition and stating that China is committed to protecting intellectual property. The embassy denied engaging in the conduct it has been accused of.
What is causing concern among the Five Eyes nations is the use of artificial intelligence (AI) in these espionage campaigns. The officials worry that AI could amplify and augment the threat. FBI Director Wray expressed concern about AI’s potential to leverage data and enhance China’s already extensive hacking program.
The concern over AI comes shortly after the US announced further restrictions that would prohibit the export of certain semiconductor manufacturing equipment to China, particularly equipment relevant to AI chip development. This move aims to impede the production of AI-capable models in Chinese data centers.
In the context of the broader Chinese threat, the US Department of Defense’s annual report to Congress highlighted China’s long-term strategy. The report emphasized China’s goal to create a self-reliant defense-industrial sector and leverage espionage activities to acquire sensitive military-grade equipment.
The Five Eyes intelligence leaders decided to go public with their concerns in an extraordinary joint appearance on CBS News’ “60 Minutes.” Ken McCallum, the Director-General of the UK’s MI5, underscored the scope of Chinese espionage, emphasizing its impact on academic research and promising startup companies. McCallum warned that individuals who do not consider themselves targets of espionage may still be manipulated, citing over 20,000 disguised approaches to individuals in the UK with relevant information.
Experts from the industry also highlighted the challenges faced by open societies in combating Chinese espionage. Ted Miracco, the CEO of Approov, praised the intelligence communities’ recognition of the threat but noted that it had come years after the blatant theft of intellectual property had been known. He emphasized China’s centralized governance structure, which provides access to vast and diverse data without significant ethical restrictions. Miracco suggested that open societies need to maximize their own innovation and protect their valuable intellectual property and individual freedoms.
David Mitchell, the CTO of HYAS, agreed that Chinese espionage is not a new concern but stated that it has reached an unprecedented scale and tempo. He noted the significant challenges faced by the private sector in dealing with skilled nation-state hacking teams and called for improvements in security posture, coordination between the private sector and government, and advancements in response capabilities.
In conclusion, the Five Eyes nations have raised public awareness about the threat of Chinese industrial espionage. They have highlighted the involvement of AI in these campaigns and called for greater vigilance among industry and academic institutions. The challenge for open societies lies in competing against a closed society like China, but they possess innovation ecosystems that can lead to breakthroughs in AI technologies. Public-private cooperation and improvements in security posture are seen as crucial in mitigating this evolving threat.