After months of mounting scrutiny of American companies’ involvement with Chinese AI and surveillance technology, and particularly its deployment in Xinjiang, the spotlight has returned to Google with renewed pressure over its AI research partnerships.

“Billionaire Tech Investor Peter Thiel believes Google should be investigated for treason. He accuses Google of working with the Chinese Government.” @foxandfriends A great and brilliant guy who knows this subject better than anyone! The Trump Administration will take a look!

— Donald J. Trump (@realDonaldTrump) July 16, 2019

The Wall Street Journal’s Sarah E. Needleman and Rob Copeland reported on Thiel’s remarks:

The statement by Mr. Trump, tweeted Tuesday morning, came after Mr. Thiel, in a keynote speech Sunday at the National Conservatism Conference in Washington, D.C., called for the Federal Bureau of Investigation and Central Intelligence Agency to investigate Alphabet Inc.’s Google unit, which he claimed is working with China’s government instead of the U.S. military.

[…] Several hours later, in remarks to reporters at a White House cabinet meeting, Mr. Trump said he is encouraging Attorney General William Barr to look into the allegation and see “if there’s any truth to it.” A representative from the Justice Department couldn’t be reached for comment.

[…] In an interview Monday with Fox News Channel’s Tucker Carlson, Mr. Thiel suggested Chinese intelligence agents are likely to have infiltrated Google as it works on an artificial-intelligence project in the country. Mr. Thiel, in the interview, didn’t offer evidence that backed his claims.

[…] “As we have said before, we do not work with the Chinese military,” Google said in a statement. A Google representative declined to comment on whether the company works with the Chinese government. [Source]

CNBC’s Kate Fazzini described Thiel’s comments as "a fiery political speech by a firebrand with an interest in deflecting regulators’ attention from Facebook," on whose board Thiel sits, adding that "there is no specific evidence pointing to Google, and claims of ‘treasonous’ activity are overblown." But the possibility of infiltration is real, as former Facebook Chief Information Security Officer Alex Stamos argued on Twitter:

It is completely reasonable to assume that MSS and SVR have subverted employees at all the major tech companies. This is part of the threat model for all competent tech security teams when building internal controls, monitoring and response. https://t.co/xiKsSKsxF2

— Alex Stamos (@alexstamos) July 16, 2019

Former cybersecurity official Richard Clarke also endorsed aspects of Thiel’s accusation, as CNBC’s Jessica Bursztynsky reported:

“Here’s what I think is true: Google refused to work for the Pentagon on artificial intelligence,” said Richard Clarke, whose 30-year government career also included stints as White House counterterrorism coordinator under former presidents Bill Clinton and George W. Bush. Clarke was referencing Google’s contract with the Defense Department, which expired earlier this year and was not renewed.

“If you turn around and you work on artificial intelligence in China, and you don’t really know what they’re going to do with that, I think there’s an issue,” Clarke said in a “Squawk Box” interview.

[…] When asked by CNBC’s Andrew Ross Sorkin if Clarke had evidence of Google working with China, the cybersecurity expert said Wednesday that the U.S. tech giant is working on AI projects there. “Do you think there’s a real distinction” between Chinese companies and the Chinese government, he asked, rhetorically. [Source]

Clarke’s remarks echo those made in March by acting Defense Secretary Patrick Shanahan, which also received Presidential Twitter endorsement: "Google is helping China and their military, but not the U.S. Terrible!"

Following Shanahan’s accusation, the Project for a New American Security’s Elsa B. Kania tweeted:

I have not seen explicit evidence that Google’s activities in China are directly benefiting Chinese military developments to date. […] I do think it’s clear that many of China’s leading universities are actively supporting the Chinese military and defense industry. Of course, such partnerships and engagements are not unique to China, but do appear to be deepening. When Google (or any American company or university) chooses to engage with a Chinese counterpart, I hope that this this increased blurring of boundaries between academic and military-oriented research in China, particularly in artificial intelligence, will be a consideration.

At the same time, I deeply believe that the openness of the American innovation ecosystem is among our greatest competitive advantages, and global partnerships in research, including, in some cases, with Chinese counterparts, can be a core element of that. So personally, I wouldn’t advocate that such academic collaborations be curtailed, and I think that the balancing of risk and benefit ideally ought to occur on a case-by-case basis. [Source]

Google’s possible military collaboration came up again earlier this month, as South China Morning Post’s Stephen Chen reported:

A lead scientist from Google took part in research in Beijing with applications that include military, medicine and education, according to China’s largest government science institute.

The research paper, about the development of new computer-human interaction technology, focuses on a smart target-selection assistant that can speed up on-screen mobile target selection by more than 50 per cent and improve accuracy by nearly 80 per cent, the government institute said.

[…] Google confirmed its involvement but denied a link to the military. “This paper addresses a very general research question in user experience design of how people interact with moving items on a touch screen,” said a Google spokesperson on Wednesday. “This paper is simply not about military applications.

[…] An AI weapon researcher working for the People’s Liberation Army said it was possible for foreigners from international technology companies to work on China’s defence-related projects.

[…] “For instance, they can be asked to develop an algorithm but not briefed on the details of how the algorithm would be used.” [Source]

Yet another recent controversy involved a partner company of the OpenPower Foundation, an innovation-focused nonprofit led by Google and IBM. The Intercept’s Ryan Gallagher revealed that the foundation was supporting development of surveillance technologies by the Shenzhen-based company Semptian:

Anna Bacciarelli, a researcher at Amnesty International, said that the OpenPower Foundation’s decision to work with Semptian raises questions about its adherence to international human rights standards. "All companies have a responsibility to conduct human rights due diligence throughout their operations and supply chains," Bacciarelli said, "including through partnerships and collaborations."

[…] After receiving tips from confidential sources about Semptian’s role in mass surveillance, a reporter contacted the company using an assumed name and posing as a potential customer. In response, a Semptian employee sent documents showing that the company — under the guise of iNext — has developed a mass surveillance system named Aegis, which it says can "store and analyze unlimited data."

[…] Semptian has benefited from the collaboration with American companies, gaining access to specialized knowledge and new technologies. The Chinese firm boasts on its website that it is "actively working with world-class companies such as IBM and Xilinx"; it claims that it is the only company in the Asia-Pacific region that can provide its customers with new data-processing devices that were developed with the help of these U.S. companies.

[…] By 2013, Semptian had begun promoting its products across the world. The company’s representatives traveled to Europe, where they appeared at a security trade fair that was held in a conference hall in the northeast of Paris. At that event, documents show, Semptian offered international government officials in attendance the chance to copy the Chinese internet model by purchasing a "National Firewall" which the company said could "block undesirable information from [the] internet." [Source]

The video also shows the system can monitor people based on their instant messenger name, email address, social media account, forum or blog ID, & cellphone IMSI code or a computer MAC address, a unique series of numbers associated with each device.

— Ryan Gallagher (@rj_gallagher) July 11, 2019

In a follow-up report, Gallagher described Semptian’s exports of portable systems for facial recognition, tracking phone locations, and intercepting mobile communications:

After receiving tips from confidential sources about Semptian’s role in mass surveillance, a reporter contacted the company using an assumed name and posing as a potential customer. In emails, a Semptian representative confirmed that the company had provided its surveillance tools to security agencies in the Middle East and North Africa — and said it had fitted a mass surveillance system in an unnamed country, creating a digital dragnet across its entire population.

The mass surveillance system, named Aegis, is designed to monitor phone and internet use. It can “store and analyze unlimited data” and “show the connections of everyone,” according to documents provided by the company.

[…] Elsa Kania, an adjunct senior fellow at the Center for a New American Security, a policy think tank, said that Semptian’s exports appear to fit with a broader trend, which has seen Chinese companies export surveillance and censorship technologies in an effort to tap into new markets while also promoting China ideologically.

“The Chinese Communist Party seeks to bolster and support regimes that are not unlike itself,” Kania said. “It is deeply concerning, because we are seeing rapid diffusion of technologies that, while subject to abuses in democracies, are even more problematic in regimes where there aren’t checks and balances and an open civil society.” [Source]

Interesting that Semptian's website appears to have been taken offline. That's the company whose tech we revealed last week is being used by the Chinese govt to monitor millions of people & has been working w/ @IBM & other US corporations. pic.twitter.com/J0cqXOoGD1

— Ryan Gallagher (@rj_gallagher) July 16, 2019

The website of Semptian front company iNext has also vanished. Just as well I saved copies. ? pic.twitter.com/QLIexJvU2b

— Ryan Gallagher (@rj_gallagher) July 16, 2019

The New York Times’ Paul Mozur highlighted another questionable OpenPower Foundation partnership in China in 2015.

Google has also faced periodic flares of criticism over Project Dragonfly, a censorship- and surveillance-compliant service intended for the Chinese search market. Leaked plans for Dragonfly (first reported by Gallagher) sparked fierce internal and external criticism, leading to the project’s reported abandonment in December. Google’s officials and representatives have repeatedly denied any ongoing work or current plans in the face of suspicions to the contrary. The company’s Vice President of Public Policy Karan Bhatia used somewhat stronger language in a Senate Judiciary Committee hearing last week, saying that Dragonfly had been "terminated," but a spokesperson’s subsequent response to requests for clarification almost precisely echoed earlier statements.

Google’s involvement in China goes beyond search and research:

When people tell you that Google is not in China, ignore them.

Google has 249 job openings in China. A large portion of them are for Google Cloud. But also ad sales, hardware (for Pixel & other devices, as well as their own servers & equipment), and also localization … pic.twitter.com/IeJy9bQl3a

— Tim Culpan (@tculpan) July 17, 2019

In an overview of Google’s current activities in China at CNBC, Arjun Kharpal highlighted cloud services; manufacturing of phones, smart home devices, and other hardware; and ad sales and app distribution outside China for Chinese firms. (The latter business has proven rocky, with Google repeatedly punishing Chinese developers for abusive ad practices.)

Bloomberg’s Mark Bergen and Emily Chang reported last week that Google may now be backing away from some activities in China:

Google’s chief executive officer told U.S. Senator Mark Warner that the company has ended some partnerships in China, the lawmaker said Tuesday on Bloomberg Television.

[…] Warner, a Democrat from Virginia, didn’t specify what projects he discussed with Google CEO Sundar Pichai. A spokeswoman for the senator said they spoke about a “range of partnerships.”

“I do think there’s some explaining that Google needs to make,” Warner said in an interview with Emily Chang on “Bloomberg Technology.” “I’ve met with the Google CEO. He said they are backing out of some of those partnerships, and they’re willing to work with the U.S. government.”

[…] “I think that Mr. Thiel and Mr. Trump’s statements are a little over the top,” Warner said. [Source]

This reported withdrawal would reflect broader trends, including widespread moves to diversify supply chains beyond China to avoid entanglement in Sino-U.S. trade tensions. NBC News’ Richard Engel and Kennett Werner recently described the shifting climate, in which purely economic factors are increasingly accompanied by political and ethical concerns:

“For tech companies, the operating environment is now highly politicized,” said Adam Segal, chair of emerging technologies and national security at the Council on Foreign Relations, a think tank. “They have to be a lot more sensitive to the potential uses there are in China and the types of technologies they’re involved in.”

[…] “There’s a sort of reckoning going on right now internally within companies about what’s required legally, and even if it’s not required legally, what are the ethical considerations,” said Samm Sacks, a fellow specializing in China and technology at New America, a think tank.

[…] “If we’re not clear on what constitutes misuse, how can we attempt to stop it?” said Lindsay Gorman, a fellow studying emerging technologies at the Alliance for Securing Democracy, a national security advocacy group.

“Having some principles on what level of involvement is okay would be essential to ensuring that our technologies don’t end up in the hands of people who are undermining human rights.” [Source]

At The Diplomat, the Council on Foreign Relations’ Viola Rothschild and Benjamin Della Rocca examined simultaneous changes in China’s own tech sector, citing recent "996" protests over grueling work schedules as one symptom.

Just two years ago, the rise of China’s tech sector (often termed its “new economy”) looked unstoppable. Between 2014 and 2017, Chinese telecommunications giant Huawei doubled its revenue, and a whopping 34 Chinese tech startups topped $1 billion valuations. By one forecast, the new economy was on track to create over 1 million jobs annually. But today, the once-prolific sector has reversed course: startups and tech giants alike have been reeling the past year. In the last quarter of 2018, WeChat owner Tencent saw net income fall by a third, and e-commerce giant JD.com lost $700 million. Alibaba forecasts that, this year, its sales will drop over 20 percent. And across publicly listed technology, media, and telecommunications (TMT) companies, last year’s earnings dropped 140 percent from 2017 — a larger plunge than any other Chinese sector.

What is going wrong? Since 2017, a volatile blend of political, economic, and social pressures have plagued new economy firms—and, therefore, new economy workers. However, one major driving force of China’s tech-sector turmoil, which has compounded these other headwinds, is the past year of conflict in the U.S.-China relationship. In particular, the ongoing trade war and disputes over data security and intellectual property have slashed profits, scared off investors, and created new operational risks for Chinese tech firms.

The faltering of China’s new economy also carries significant social consequences: worker suffering, simmering social unrest, and crackdowns on dissent from Beijing. Looking at this broader picture, it becomes clear that recent U.S. policies have done more to China than threaten Huawei’s bottom line. They are fanning the flames of broader social pressures — which, in turn, push Beijing to take steps that widen the growing rift between the U.S. and Chinese tech spaces. [Source]