A stern glance from all Five Eyes.

In an “unprecedented” joint call by Five Eyes intelligence and counterintelligence leaders last Tuesday, the officials called out Beijing for what they characterized as theft of intellectual property on an "unprecedented" scale.

Industrial and academic research are targets.

The Five Eyes--Australia, Canada, New Zealand, the United Kingdom, and the United States--called on industry and universities to help counter this threat of Chinese espionage. Such espionage is nothing new. FBI Director Christopher Wray said, as quoted by Reuters, "China has long targeted businesses with a web of techniques all at once: cyber intrusions, human intelligence operations, seemingly innocuous corporate investments and transactions. Every strand of that web had become more brazen, and more dangerous." Mike Burgess, Director-General of the Australian Security Intelligence Organization, put it even more strongly. "The Chinese government is engaged in the most sustained, scaled and sophisticated theft of intellectual property and expertise in human history," he said.

A spokesman for the Chinese embassy in Washington dismissed the allegations as baseless. "We firmly oppose the groundless allegations and smears towards China and hope the relevant parties can view China’s development objectively and fairly." China is, the embassy said, resolutely committed to the protection of intellectual property and wouldn't engage in the conduct it's accused of.

Artificial intelligence as an enabler of espionage.

What is new, and what the Five Eyes find particularly unsettling, is the use of artificial intelligence in these campaigns, given its potential to amplify and augment the threat. "We worry about AI as an amplifier for all sorts of misconduct," Wray said. "If you think about what AI can do to help leverage that data to take what's already the largest hacking program in the world by a country mile, and make it that much more effective - that's what we're worried about,"

The officials spoke shortly after the US announced a further round of restrictions that would prohibit the export of "additional types of semiconductor manufacturing equipment" to China, specifically equipment that might be useful in developing and producing chips useful in artificial intelligence applications. The New York Times reported, "The rules appear likely to halt most shipments of advanced semiconductors from the United States to Chinese data centers, which use them to produce models capable of artificial intelligence. More U.S. companies seeking to sell China advanced chips, or the machinery used to make them, will be required to notify the government of their plans, or obtain a special license."

Cyberespionage in the context of the larger Chinese threat, as seen from the US.

The US Department of Defense this month described, in its annual report to Congress, "Military and Security Developments Involving the People's Republic of China," what it takes to be China's long-term strategy. "The PRC’s long-term goal is to create an entirely self-reliant defense-industrial sector—fused with a strong civilian industrial and technology sector—that can meet the PLA’s needs for modern military capabilities," the report said. "The PRC has mobilized vast resources in support of its defense modernization, including through its Military-Civil Fusion (MCF) Development Strategy, as well as espionage activities to acquire sensitive, dual-use, and military-grade equipment."

Publicity intended to shine light on Chinese industrial espionage.

The intelligence leaders of the Five Eyes have been unusually open in their assessment of the Chinese espionage threat. They took their concerns to the broader public in an unprecedented joint appearance on CBS News' "60 Minutes" this Sunday.

Ken McCallum, Director-General of the UK's MI5, emphasized the scope of the Chinese program. "This is not just about government secrets or military secrets. It's not even just about critical infrastructure. It's about academic research in our universities. It's about promising startup companies. People, in short, who probably don't think national security is about them." He called for greater awareness of the ways in which individuals who are unlikely to the possibility of espionage a second thought are prospected by the Chinese services. "So we see the theft happening in a range of ways. One is that we see employees within those companies being manipulated. Often, in the first instance, they are not aware of what is happening. We have seen, for example, the use of professional networking sites to reach out in sort of masked, disguised ways to people in the U.K., either who have security clearance or who are working in interesting areas of technology. We've now seen over 20,000 examples of that kind of disguised approach to people in the U.K. who have information that the Chinese State wishes to get its hands on."

Thus the point of publicity is public awareness, in the hope that light might serve as a disinfectant.

Industry experts urge security appropriate to open societies.

Approov's CEO, Ted Miracco, wrote, in emailed comments, "Statements from the intelligence communities at the Five Eyes countries are a positive recognition of the persistent threat of Chinese espionage. However, this escalation is coming years, perhaps decades, after we had known about the blatant theft of intellectual property from China."

As open societies," he added, "we face significant challenges in competing against a closed society like China in the field of AI. China has a centralized governance structure, which gives it access to a large amount of diverse and centralized data, without a lot of ethical restrictions on how it will be used. In contrast, the Five Eyes countries face challenges in accessing similar volumes and types of data due to privacy concerns and legal frameworks that prioritize individual rights. China has also been aggressively investing in AI research and development, leading to a significant pool of talented scientists, engineers, and researchers."

In addition to vulnerabilities, open societies possess certain characteristic advantages. “The Five Eyes countries have well-established innovation ecosystems, including leading universities, research institutions, and a vibrant private sector that fosters a culture of innovation which can lead to breakthroughs in AI technologies. However, the question that remains is can open societies capitalize on these innovations, safeguard individual freedoms, and protect their valuable IP over the long term?”

David Mitchell, Chief Technical Officer at HYAS, agrees with the intelligence leaders that the Chinese espionage threat is nothing new. But he also agrees that it’s reached an unheard-of scale and tempo. “The PRC has been a cyber concern for as long as I can remember but has grown to become an existential threat over the last few years. The sheer number of motivated hacking teams, the scale of the toolsets and the coordination are unlike anything we’ve ever seen — and add AI to the equation and we have a serious problem. The private sector is not equipped to deal with such skilled nation state teams for a variety of reasons — a lack of network visibility, disjointed security platforms and understaffed organizations."

He also agrees on the importance of public-private cooperation. “Without improvements in our security posture, products, and response, along with coordination between the private sector and government, it is hard to see this threat dissipating anytime soon.”