In this week’s edition, Eric Schmidt makes the case for innovation power, the Biden administration ties corporate behavior to CHIPS Act funding, the Supreme Court hears a case that challenges Section 230, and the US government releases a new cyber strategy. Additionally, Senate and House minority leaders demand that Fox News stop endorsing falsehoods about the 2020 election.
Industrial Policy & International Security
Why technology will define the future of geopolitics | Foreign Affairs
Eric Schmidt, Chair of the Special Competitive Studies Project, argues that innovation power will be the deciding factor in the great power competition between the US and China within the next decade. He defines innovation power as the ability to invent, adopt, and adapt new technologies. In China, innovation power is driven by the government, through civil-military fusion, whereas the US relies on a more decentralized system rooted in collaboration between government, industry, and academia. Since the end of the Cold War, the American private sector has become the more powerful player in US innovation power but Schmidt points out that today’s market forces aren’t enough to maintain technological and military superiority. Schmidt believes the US government must invest in key technology areas—artificial intelligence, semiconductors, renewable energy, etc.—and commit to immigration policies that make it easier for talented immigrants to come to the US. At the same time, he says the military must adopt new technologies more quickly and adjust its force structure and operational concepts accordingly.
Biden’s Semiconductor Plan Bets on Federal Aid to Change Corporate Behavior | New York Times
The Biden administration is tying its efforts to boost US semiconductor manufacturing, aimed at countering China, to a set of specific guidelines for corporate behavior. To qualify for any of the $40 billion of funding allocated by the CHIPS Act, manufacturers will need to satisfy a range of conditions. These include providing child care for employees, using low-emission energy sources, paying union wages for construction workers, avoiding stock buybacks, and potentially sharing profits with the government. This represents a departure from the traditional government approach of engaging with corporate America, but is intended to promote greater competitiveness, higher levels of US production, better working conditions, and lower levels of fossil fuel emissions. Some economists have raised concerns that the ancillary requirements could detract from Biden's core economic objectives and others have accused the administration of imposing liberal priorities on companies seeking CHIPS Act funds.
US Regulation
The Gonzalez v. Google case is now being heard by the US Supreme Court. The case fundamentally challenges Section 230 of the Communications Decency Act, passed in 1996, which grants internet companies immunity from legal action over third-party content. The plaintiffs argue that because the YouTube algorithm recommended pro-ISIS content, Google should be held accountable for the death of Nohemi Gonzalez in a 2015 ISIS terrorist attack in Paris. Section 230 supporters view online platforms as public forums for free expression while opponents believe social media companies that monetize and promote user content should be held liable for the content on their platforms. While there is bipartisan support to repeal Section 230, it’s possible that further regulation of online platforms could actually benefit the existing tech giants by creating larger barriers to entry, potentially hindering technology innovation. Hearing recaps indicate the Supreme Court is leaning in favor of the defense, which means Section 230 reform may fall to Congress.
Innovation
Neuralink human testing has reportedly received one FDA rejection already | TechCrunch
Neuralink, Elon Musk's brain-computer interface company, has reportedly been rejected by the FDA for human testing due to safety concerns. These included the possibility that the implant could migrate through the brain’s soft tissue, overheat, or cause brain damage during removal procedures for any reason. Moreover, the company has been cited previously for exceeding ethical boundaries during animal tests. The FDA’s caution is warranted given the potential risks of the new implant and robotic implantation method. While this technology promises breakthroughs for people with debilitating conditions, the risks are significant. Neuralink must prove that its implants are safe at a basic level before it can proceed with human testing.
Cyber
How the US National Cyber Strategy Reaches Beyond Government Agencies | Wall Street Journal
This week, the Biden administration released the new national cybersecurity strategy, replacing the prior document issued by the Trump administration in 2018. The new strategy defines the government’s approach to cybercrime, cyber defense, and the private sector’s responsibility. Notably, it goes further than past strategies and takes a more prescriptive approach to policy. Five key areas for action include improving critical infrastructure cyber defenses, disrupting hackers and criminal gangs, enhancing the security of technology sold to companies, investing in cyber upgrades, collaborating with international partners to combat cyber crime. Companies that fail to implement minimum security standards will face greater liability. Additionally, the strategy calls for the National Institute of Standards and Technology to develop guidelines that govern how personal data is collected and protected. The Office of the National Cyber Director, the Office of Management and Budget, and the National Security Council will work together to put the new strategy into effect, report progress to the president and lawmakers, and assess related changes to policy.
State & Local Tech Ecosystems
The age of the Silicon Valley ‘moonshot’ is over | The Washington Post
Big tech companies such as Google, Facebook, and Amazon are abandoning so-called “moonshot” projects as they come under pressure to cut costs. Even more mature efforts like Google’s self-driving car lab Waymo are facing new business constraints and layoffs. The companies are refocusing on their core businesses at the expense of moonshots; the risk of an economic downturn today is more pressing than being disrupted by an innovative startup. Amazon is shutting down a number of projects run by its internal incubator, Grand Challenge. And Facebook has either cut investment in or stopped the development of several products and services. While innovation will continue to happen in startups and big companies, a heightened sense of risk aversion could have a profound impact on the culture of Silicon Valley. As jobs with established companies become less secure, fewer employees may be willing to lend their talent to new startup efforts without the comfort of a safety net.
Democracy Online
Schumer, Jeffries demand Fox News stop ‘grave propaganda’ about 2020 election | The Washington Post
Democratic leaders, Senate Majority Leader Charles E. Schumer and House Minority Leader Hakeem Jeffries, have sent a letter to Fox News executives demanding the network stop endorsing falsehoods about the 2020 election. As part of Dominion Voting Systems’ defamation lawsuit against Fox Corp., Chairman Rupert Murdoch admitted in a recent deposition that he regrets the network didn’t push back harder against election misinformation. Schumer and Jeffries point out that Fox News hosts have continued to promote damaging stories despite executives’ awareness of the dangers of broadcasting unfounded claims. Their concerns that further reporting could incite more political violence were elevated by House Speaker Kevin McCarthy’s decision to release more than 40,000 hours of January 6th surveillance footage exclusively to Fox News host Tucker Carlson. Schumer and Jeffries appealed to Fox to “move beyond this damaging chapter in your company’s history by siding with the truth and reporting the facts.”
