Weekly Breakdown of AI Global Affairs and Cyber Defense
Welcome back to the Midweek CyberScan and AI Diplomat Series, your go-to source for the latest buzz in security, defence, AI business, and global affairs. This week, we’ve got a smorgasbord of news that’s hotter than a server room in July. Buckle up, because the tech world’s latest shenanigans are nothing short of a high-stakes corporate thriller.
First up, Apple’s making waves by securing a board observer role with OpenAI, rubbing shoulders with Microsoft and sparking a new chapter in their friendly (read: cutthroat) rivalry. Speaking of rivalries, Microsoft’s $1.5 billion partnership with UAE-based G42 has Washington sweating over the strategic approach to support national security against China's technological competition. Meanwhile, Australia’s gone full Sherlock, unmasking a China-backed hacker group and putting everyone on high alert.
And just when you thought “national security” couldn’t get more intriguing, the Albanese Government teams up with Amazon Web Services in a $2 billion deal to build a Top Secret Cloud, set to catapult Australia’s cyber capabilities into the stratosphere. Stay informed and entertained with insights on the global forces moving artificial intelligence businesses and digital defence policy.
Apple Secures OpenAI Board Observer Role
In a significant turn of events, Apple is set to secure an OpenAI board observer role as part of its deal to integrate ChatGPT into the upcoming iOS 18. According to Bloomberg's Mark Gurman, Phil Schiller, Apple's head of the App Store and former CMO, will assume this role. This development places Apple on par with Microsoft, which has invested $13 billion in OpenAI for a similar position. Gurman elaborates, "Having Microsoft and Apple sit in on board meetings could create complications for the tech giants, which have been rivals and partners over the decades."
From an editorial perspective, this scenario is not just about strategic collaboration but also highlights the growing tension between hyperscalers and their efforts to dominate the LLM ecosystem. The inclusion of Apple and Microsoft on OpenAI's board raises questions about the convergence of hyperscalers leveraging their market dominance to influence multiple independent organisations and AI labs. This situation could potentially lead to antitrust issues or market influence that is overly biased towards these global behemoths.
The role of governance and regulators becomes crucial in overseeing the activities of these tech giants within different boards. The intervention of Microsoft, Apple, and other hyperscalers like the Magnificent Seven pushes their influence across the AI environment, potentially stalling the democratisation of AI. As OpenAI navigates this complex relationship, the tech world must watch closely to see how these giants will collaborate and compete within the AI landscape.
Industry commentators have been quick to react...
"Microsoft's cost for an OpenAI board observer role? Around $15 billion. Apple's cost for an OpenAI board observer role? $0. Jokes aside, this is pretty wild, MG Siegler tweeted.
And Ian Carroll: "OPEN AI names 4 new board members and sketchy just got sketchy-er …..But hey, the brave new world of tomorrow’s gonna need a ministry of truth right? 🤷♂️.”
While humorous, these comments underscore the potential for conflict and the delicate balance required to manage these relationships.
National Security and Geopolitical Tensions: Microsoft's Contentious G42 Investment
Microsoft's $1.5 billion minority investment in UAE-based G42 has ignited national security concerns. Initially endorsed by the U.S. government, the deal aims to diminish G42's ties with Chinese companies. However, Bloomberg reports ongoing scepticism in Washington about G42's commitment to fully severing its connections with China. The report highlights, "Pentagon officials are sceptical G42 will entirely uncouple from China, according to people familiar with the situation."
From an editorial perspective, this deal underscores the sensitivity between the U.S.-led sponsorship of the Microsoft-G42 deal and its perceived strategic flaws. Using China as the fundamental reason to persuade G42 to ally with the U.S. brings more tension and potentially similar roles from China and other states to sponsor strategic commercial alliances in AI development. This raises the question of whether AI is at the mercy of government policy rather than being developed as a pure creation for open-source knowledge and societal improvement.
Bloomberg continues, "Microsoft's chronic cybersecurity failures, enumerated recently in a scathing government report, have also stoked fears that foreign powers could access sensitive U.S. networks." The national security implications of this deal extend beyond the immediate financial transaction, reflecting broader geopolitical tensions.
This deal highlights the complex relationship between technology, national security, and international diplomacy. The intersection of business interests, national security, and international relations creates a volatile environment where decisions are scrutinised from multiple angles. The G42-Microsoft deal serves as a case study in the delicate balancing act required to pursue business opportunities while safeguarding national interests.
As AI development becomes increasingly entangled with government policy, the democratisation of AI and critical tech may be stalled. The manipulation of AI advancements to serve strategic interests rather than open-source innovation could limit access to knowledge outside traditional markets like the United States. This evolving scenario underscores the need for careful consideration of the broader implications of these strategic alliances and interventions in the AI landscape.
China-Backed Hacker Group Unmasked by Australia and Allies
In a significant move, Australia has publicly attributed a series of cyber espionage activities to APT40, a state-sponsored hacking group linked to China’s Minister of State Security. The Australian government, alongside Five Eyes partners—New Zealand, Canada, the US, and the UK—plus Germany, Japan, and Korea, has blamed APT40 for targeting Australian government and private sector networks. This marks the first time Australia has taken the lead on a cyber advisory, as well as the first joint attribution by Japan and Korea with Australia. The hacking group was responsible for stealing hundreds of usernames and passwords from one Australian entity in April 2022.
“The Albanese government is committed to defending Australian organisations and individuals in the cyber domain, which is why for the first time we are leading this type of cyber attribution,” Marles said in a statement.
The diligence of the Australian Signals Directorate was pivotal in uncovering the threat, according to Defence Minister Richard Marles.
"In our current strategic circumstances, these attributions are increasingly important tools in deterring malicious cyber activity," Marles said.
Despite these tensions, Foreign Minister Penny Wong emphasised that Australia would continue to engage with China without compromising national security. Home Affairs Minister Clare O'Neil underscored the severity of the threat, stating that cyber intrusions from foreign governments are "one of the most significant threats we face." This coordinated effort highlights the growing international resolve to counter state-sponsored cyber threats.
Global Hyperscalers Invest in Australia's AI and Cloud Infrastructure
In a groundbreaking move, the Albanese Government has announced a strategic partnership with Amazon Web Services (AWS) to establish a highly secure Top Secret (TS) Cloud for the Australian Government. Over the next decade, the government will invest at least $2 billion to bolster Australia’s cyber capabilities. This initiative underscores a significant commitment to modernising the nation's defence infrastructure and enhancing information-sharing capabilities within the security sector.
This landmark partnership will see AWS establish a sovereign TS Cloud in Australia, providing resilient information, communication, and technology (ICT) services for the Australian Government. The project is expected to generate up to 2,000 local Australian jobs. Deputy Prime Minister Richard Marles highlighted the investment's potential, stating,
“It will ensure that we have a far more resilient, capable, lethal, prominent, and potent defence force for the future.”
The initiative includes constructing three data centres in Australia, designed to house the nation’s most sensitive intelligence information.
Rachel Noble, Director General of the Australian Signals Directorate, emphasised the transformative impact of this initiative, noting, “This will provide a state-of-the-art collaborative space for our intelligence and defence community to store and access top-secret data. This will transform how we work together as agencies and partners.”
As one of the Five Eyes countries sharing the most highly classified intelligence, Australia has faced regular cyberattacks from Chinese and Russian actors. The need for secure ways to share intelligence and targeting data with allies like the United States, Britain, Canada, and New Zealand has become increasingly critical.
The cyber partnership with AWS aims to address these challenges by providing a secure, resilient framework for future strategic operations. The joint initiative offers significant opportunities for Australian industry, engaging local businesses in the design and construction of the TS Cloud, driving innovation and job creation in cybersecurity, data analytics, and cloud computing. This project builds on AWS’ planned $13.2 billion investment in Australian infrastructure through 2027, supporting the creation of 11,000 local jobs, and further solidifies Australia's position at the forefront of global defence and intelligence technology.
