As we step into the Age of Artificial Intelligence (AI), China’s extensive history of cyber theft may finally yield substantial returns. For years, China has engaged in cyber espionage, pilfering American data encompassing trade secrets, manufacturing expertise, and sensitive research. However, a significant portion of this acquired data remained dormant, largely due to limitations in personnel, language proficiency, and expertise required for effective exploitation.
But with the advent of AI, this equation is rapidly changing, holding profound implications for America’s economic and security interests.
China now possesses the capability to harness its vast stockpiles of proprietary data to train AI models capable of uncovering intricate patterns, identifying novel opportunities, and even generating innovative products across various industries, scientific domains, and defense sectors. The quality of “training data” significantly enhances AI-driven insights, making them more robust and actionable. This transformation has gone relatively unnoticed, yet it exponentially amplifies the value of hacked corporate data, particularly for strategic competitors like China, which reportedly leads in 37 out of 44 technology areas globally.
The Biden administration’s National Security Strategy underscored the concept that economic security equates to national security, particularly in the context of the AI revolution. The emergent AI toolkit provides the Chinese Communist Party with an unprecedented opportunity to derive economic gains from the troves of secrets amassed over the years, posing a substantial risk to American national security interests.
China’s newfound advantage stands in stark contrast to the United States. American trade secrets are inherently non-public and compartmentalized across thousands of private corporations. Unlike China, no single U.S.-based entity possesses all corporate data, let alone utilizes it for training AI models to identify new market prospects. In essence, China has assembled an immense collection of AI training data extracted from countless non-public sources, alongside the vast pool of domestic data it accumulates from its citizens and businesses.
This discrepancy underlines the potential harm of China’s longstanding hacking campaign. We must assume that China can exploit its troves of stolen assets and domestic data to accelerate the development of new products, gain competitive advantages, and pinpoint critical vulnerabilities in American markets. China has both the means and motives to seize this opportunity. Conversely, non-autocratic countries, where sensitive corporate data are appropriately dispersed among private entities, lack equivalent capabilities.
Furthermore, China’s AI-derived products and services are likely to be elusive, given the myriad of data points shaping their creation. As a result, American businesses, along with the administration and Congress, must prepare for a future marked by unfair competition, with Chinese offerings built on an illicit repository of global intellectual property.
Addressing this threat necessitates increased deterrence and bolstered cyber resilience. Recent actions by U.S. and Australian law enforcement calling out China for its data collection operations and urging private businesses to secure critical systems are steps in the right direction. However, a more coordinated and assertive campaign is imperative to steer China off this course. Securing American interests against this evolving threat entails recognizing how generative AI magnifies the value of stolen data and treating this economic challenge as the national security crisis it has become.