Wafer chips vs Moore’s law, weaponized interdependence, tech crackdown in China and ransomware getting out of hand
Summer hits differently after almost a year of lockdown so hopefully these #discoveries make up for the 📻 silence in the past two weeks.
Tech crackdown (or correction) in China
The past week was full of news about China's actions towards its tech enterprises. In addition to the size of the companies targeted, what's also fascinating is the nature of complaints brought against these companies.
Online grocery units of Meituan and Pinduoduo also suffered scrutiny recently for improper pricing. According to several reports, it all started with Alibaba's $2.8 billion fine for improper financial and consumer lending conduct in October of last year and the wave of state investigations will continue into the future.
China's president is targeting data based platform companies (a very broad definition) to eradicate the systemic risk of consumer debt. In other words, the crackdown is about protecting consumers and maintaining financial stability. But looking at the valuation of state vs private enterprise, the picture becomes different.
The companies mentioned above are valued more than the state bank and collect as much information – via different but aggregated services – as the state. From this perspective the recent moves maybe about not letting any tech company (even if homegrown) become too big to govern. This echoes a sentiment voiced by the French President about Facebook and Google a few years ago.
Another way to tackle big tech is by creating “10,000 little giants” and a generation of “hidden champions”. Six Chinese ministries envision the creation of smaller companies that specialise in niche sectors. These would further protect China's technological sovereignty from any supply chain attacks from manufacturers that are currently located in Germany, US and Japan.
Ransomware is getting out of hand
The latest victim is the bitcoin.org website which experienced a DDoS attack while the perpetrators demanded 0.5 BTC. It seems that attackers are moving down the chain from grid infrastructure targets. Hundreds of smaller scale businesses were targeted and the super market chain Coop had to close its doors for two days while the situation was being resolved.
This newly launched website tracks the amount that's been paid in ransomware along with the cryptocurrency addresses used to receive the ransom.
On the same topic, the German newspaper Die Zeit ran an article about how unprepared Germany is in the face of cyber-attacks. More than 100 public institutions were targeted in attacks in the past years and had to pay to get control back. Cyber crime along with disinformation is a big topic ahead of this year's elections.
Moore's law and wafer chips
When you ran out of space to place transistors on a chip – increase the surface upon which transistors are placed. This is the premise of wafer scale hardware that uses the entirety of a silicon wafer. To address the extreme shortage of chips taking place these days and future dependencies, the EU has designated chip production and competence as one of the pillars of the Digital Compass program.
It aims to double the output capacity and reach 20% of the global supply by 2030. On the heels of this ambitious plan comes Bosch's $1.2 billion chip plan opening that took place in June.
John Hopkins' Henry Farrell and Georgetown University's Abraham Newton define weaponized interdependence as “a condition under which an actor can exploit its position in an embedded network to gain a bargaining advantage over others in a contained system”.
I first came across the concept in an article bearing the concept's name by the authors that was published in 2019. Arguing from an international relations perspective, they cite a few examples of weaponized interdependence such as the SWIFT network (elaborated in honourable mentions of digital sovereignty here) and communication technologies.
Their recently published book includes many other examples and is a goldmine for analysing this phenomenon which once understood take place in many aspects of today's geopolitics and geoeconomics. It also adds a particular angle to observe the digital sovereignty debate through.
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