Congress may be hell-bent on forcing TikTok's Chinese owners to sell the social media company so that communists can no longer control impressionable American teens with propaganda. But that's not the only effort federal officials are taking to reduce the impact of foreign threats in the sensitive field of technology.
For example, in the United Arab Emirates, the US government worked with Microsoft to acquire a minority stake in G42, the country's leading artificial intelligence company. A key part of securing the deal was ensuring that G42 disposed of the Chinese hardware it was using in its operations.
In recent weeks alone, the U.S. government has issued numerous subsidies to both domestic and friendly foreign semiconductor manufacturers in an effort to thwart the dominance of Taiwan-based TSMC, the world's largest semiconductor company. U.S. authorities strongly believe that TSMC is under Chinese influence.
Semiconductor subsidies have generally been greeted with enthusiasm. Consider Senate Majority Leader Chuck Schumer (D-N.Y.)'s reaction to the recent $6.1 billion grant to Micron Technology. Micron Technology will help Schumer build manufacturing plants both in his hometown and in Idaho.
“This monumental and historic federal investment will help Micron deliver on an innovative, $100 billion-plus four-fab project in central New York, creating an estimated 50,000 jobs.” said Schumer.
This grant comes from the federal CHIPS and Science Act, which has a budget of $52.6 billion, along with other grants to Intel, Samsung, and even TSMC to ramp up U.S. manufacturing facilities. There is.
In fact, U.S. chip production has shrunk from 37% of the global market in 1990 to just 12% in 2020, according to the Semiconductor Industry Association. Therefore, in an era of ever-increasing insecurity, hostile corporations, and tremendous competitive forces, it is important to note that the U.S. government is willing to invest in this industry and others at a time when national security issues are at stake. It may seem logical to subsidize important technology industries.
“AI and cybersecurity are already essential to national defense systems and infrastructure, and governments must ensure these technologies are protected from foreign interference or manipulation,” said Palo Alto, Calif.-based said Ted Miraco, CEO of cybersecurity firm Approov Mobile Security. “Data and AI are also key drivers of economic growth and competitiveness, and governments are recognizing the need to foster strong domestic AI industries and keep pace on the global stage. The aim of these interventions is not only to reduce risks, but also to maximize the benefits that these technologies can provide to society.”
And the United States is simply doing what other actors around the world, especially China and Russia, have said are long-term goals.
“Achieving AI superiority is a priority for the United States, China, and Russia in their national security strategies,” said Tom Kellerman, senior vice president of cyber strategy at Los Altos, Calif.-based Contrast. “Therefore, a new arms race is occurring.” Security “The race to singularity has grown rapidly over the past five years, and it represents a comprehensive, long-term commitment by the U.S. government.”
Not everyone is participating
Not everyone agrees that government action in the form of subsidies or active collaboration with private companies to influence markets is the best course of action.
According to the Cato Institute, the federal government spends about $100 billion a year on “corporate welfare,” which equates to $800 per household. Chris Edwards, chairman of the Kilts family for financial research at the Cato Institute, told the Washington Examiner that such subsidies and grants can make recipient companies bloated and inefficient.
“The role of the federal government is to track threats and warn about the Chinese, not to actively intervene in the market,” he said. “How do we prevent China from accessing or stealing our cutting-edge technology? We don't know the answer. But I don't think the answer is to subsidize our companies.”
Such government actions are contrary to those of venture capital firms, which intentionally minimize injecting money into startups and young companies to keep them lean and efficient, he said. added. The huge amount of venture capital and angel funding in the U.S. high-tech industry over the past decade means there are no “market failures” that would require federal subsidy intervention.
Rather, it's excessive regulation and higher-than-average international corporate tax rates that scare foreign companies away from investing in the U.S., Edwards said.
it happened before
Whatever the merits, the idea of giving federal subsidies to private companies or interfering with private business in the name of national security, such as Microsoft G42, is not new, says Security and Geopolitical Strategy. says Irina Tsukelman, president of the company Scarab Rising. risk group.
“This growing trend is a more modern take on the technology and arms race that the United States faced with the Soviet Union during the Cold War,” she said. “But unlike during the Cold War, the United States is now dealing with a network of adversaries with far more significant technological capabilities than what it faced then.”
And China has focused much of its intelligence gathering on industrial espionage so that it can infiltrate the private sector and steal trade secrets in critical security areas such as advanced internet, cyber, and AI. She said it was a prime example of a country with , semiconductors, etc.
“China views both the economic and defense sectors as zero-sum games, which means it is willing to resort to illicit means to undermine competition and gain competitive advantage,” she said. Ta.
Ultimately, the risks may be too high to rely on the free market to solve all the problems posed by security and foreign threats. Commerce Secretary Gina Raimondo said in her recent comments that the United States may bear some of the blame for allowing this to happen.
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“We let the manufacturing industry in this country wither away in search of cheap labor in Asia, cheap capital in Asia, and now we're here,” she said in a recent television interview on CBS. “We simply pursued profit over national security.”
She said this type of behavior cannot be allowed to continue unchecked as security concerns continue to grow.
Nick Thomas is a writer based in Denver, Colorado.
