Tag Archive for: Technology

The US has many chip vulnerabilities

Although semiconductor chips are ubiquitous nowadays, their production is concentrated in just a few countries, and this has left the US economy and military highly vulnerable at a time of rising geopolitical tensions. While the United States commands a leading position in designing and providing the software for the high-end chips used in AI technologies, production of the chips themselves occurs elsewhere. To head off the risk of catastrophic supply disruptions, the US needs a coherent strategy that embraces all nodes of the semiconductor industry.

That is why the CHIPS and Science Act, signed by President Joe Biden in 2022, provided funding to reshore manufacturing capacity for high-end chips. According to the Semiconductor Industry Association, the impact has been significant: currently planned investments should give the US control of almost 30 percent of global wafer fabrication capacity for chips below ten nanometres by 2032. Only Taiwan and South Korea currently have foundries to produce such chips. China, by contrast, will control only 2 percent of manufacturing capacity, while Europe and Japan’s share will rise to about 12 percent.

But US President Donald Trump is now trying to roll back this strategy, describing the CHIPS Act—one of his predecessor’s signature achievements—as a waste of money. His administration is instead seeking to tighten the export restrictions that Biden introduced to frustrate China’s AI ambitions.

It is a strategic mistake to de-emphasise strengthening domestic capacity through targeted industrial policies. Coercive measures against China not only have proved ineffective, but may have even accelerated Chinese innovation. DeepSeek’s highly competitive models were apparently developed at a fraction of the cost of OpenAI’s. A substantial share of the semiconductors used in DeepSeek’s R1 model comprises chips that were smuggled through intermediaries in Singapore and other Asian countries, and DeepSeek relied on clever engineering techniques to overcome the remaining hardware limitations it faced. Meanwhile, Chinese tech giants such as Alibaba and Tencent are developing similar AI models under similar supply constraints.

Even before the DeepSeek breakthrough, there were doubts about the effectiveness of US trade restrictions. The Biden administration’s export ban, adopted in October 2022, targeted chips smaller than 16nm, banning not only exports of the final product, but also the equipment and the human capital needed to develop them. Less than a year later, in August 2023, Huawei launched a new smartphone model (the Mate 60) that uses a 7nm chip.

Even if China no longer has access to the most advanced lithography machines, it can still use old ones to produce 7nm chips, albeit at a higher cost. While these older machines do not allow it to go below 7nm (Taiwan Semiconductor Manufacturing Company is working on 1nm chips), Huawei and DeepSeek’s achievements are a cautionary tale. China now has every reason to develop its own semiconductor industry, and it may have made more progress than we think.

To reduce its own supply-chain vulnerabilities, the US cannot rely on an isolationist reshoring-only approach. Given how broadly the current supply chain is distributed, leveraging existing alliances is the only viable way forward. ASML, the Dutch firm with a near-monopoly on the high-end lithography machines used to make the most advanced chips, cannot simply be recreated overnight.

So far, the US has focused on reducing security risks related to the most sophisticated chips, giving short shrift to the higher-node chips that are needed to run modern economies. Yet these legacy chips (those above 28nm) are key components in cars, airplanes, fighter jets, medical devices, smartphones, computers and much more.

According to the Semiconductor Industry Association, China is expected to control almost 40 percent of global wafer fabrication capacity for these types of chips by 2032, while Taiwan, the US and Europe will account for 25 percent, 10 percent, and 3 percent, respectively. China will thus control a major strategic chokepoint, enabling it to bring the US economy to a halt with its own export bans. It also will have a sizable military edge, because it could impair US defences by cutting off the supply of legacy chips. Finally, China’s security services could put back doors into Chinese-made chips, allowing for espionage or even cyberattacks on US infrastructure.

Compounding the challenge, Chinese-made chips are usually already incorporated into final products by the time they reach the US. If the US wants to curtail imports of potentially compromised hardware, it will have to do it indirectly, tracking down chips at customs by dismantling assembled products. That would be exceedingly costly.

Fortunately, the US does not lack policy tools to reduce its vulnerabilities. When it comes to military applications of legacy chips, it can resort to procurement restrictions, trade sanctions (justified on national-security grounds), and cybersecurity defences. As for expanding domestic production capacity, it can use anti-dumping and countervailing duties to counter unfair Chinese practices, such as its heavy subsidisation of domestic producers.

Chips, and the data they support, will be the oil of the future. The US needs to devise a comprehensive strategy that addresses the full range of its current vulnerabilities. That means looking beyond the most advanced chips and the AI race.

South Korea has acted decisively on DeepSeek. Other countries must stop hesitating

South Korea has suspended new downloads of DeepSeek, and it was were right to do so.

Chinese tech firms operate under the shadow of state influence, misusing data for surveillance and geopolitical advantage. Any country that values its data and sovereignty must watch this national security threat and take note of South Korea’s response.

Every AI tool captures vast amounts of data, but DeepSeek collects data unnecessary to its function as a simple chatbot. The company was caught over-collecting personal data and failed to be transparent about where that data was going. This typifies China’s lack of transparency about data collection, usage and storage.

South Korea’s National Intelligence Service flagged the chatbot for logging keystrokes and chat interactions, which were all stored on Chinese-controlled servers.

Once data enters China’s jurisdiction, it’s fair game for Beijing’s intelligence agencies. That’s not paranoia; it’s the law. Chinese companies must hand over data to the government upon request. South Korea saw the writing on the wall and acted before it was too late.

Data in the wrong hands can be weaponised. By cross-referencing DeepSeek’s collected data with other stolen datasets, Chinese intelligence agencies could build profiles on foreign officials, business leaders, journalists and dissidents. Keystroke tracking could help to identify individuals even when they use anonymous communication platforms. AI-powered analysis could pinpoint behavioral patterns, making it easier to manipulate public opinion or even blackmail individuals with compromising data.

If this sounds familiar, you’re not mistaken. Huawei was banned from operating 5G networks in multiple countries based on similar concerns. TikTok has come under scrutiny for its ties to the Chinese government. China has spent years perfecting cyber-espionage and DeepSeek appears to be the latest tool in its arsenal, joining the growing list of Chinese tech products raising red flags.

Chinese actors have displayed a pattern of digital intrusion. Recent events include the Volt Typhoon and Salt Typhoon operations, which targeted US digital infrastructure and telecom networks. These attacks compromised the data of more than one million people, including government officials. Looking to Europe, Germany fell victim to Chinese-backed hackers breaching its federal cartography agency.

China is using AI tools for influence, data gathering and geopolitical maneuvering. AI is a versatile tool through which the flow of information is controlled.

The risk goes far beyond espionage. It extends to economic coercion and intellectual property theft. For example, multinational companies relying on AI-powered tools may unknowingly send sensitive business strategies to foreign adversaries. Government agencies may unknowingly feed points of information that would be classified in aggregate into an AI system that Beijing can tap into. The consequences would be far-reaching and deeply troubling.

What if South Korea had looked the other way? Millions of South Korean citizens would have been at risk of Chinese coercion and exposed to data harvesting under the guise of harmless AI. In an era where data shapes power, handing control to foreign entities is dangerous.

Some countries are beginning to grasp these threats. India and Australia are ramping up scrutiny of foreign AI applications, and Australia and Taiwan have banned DeepSeek on government devices. The European Union is tightening regulations to demand transparency and accountability for data usage.

The United States, on the other hand, is still deliberating. President Donald Trump has focused on AI as a push for Silicon Valley to lift its game, rather than considering the technology’s national security implications. US lawmakers are beginning to propose restrictions on AI tools linked to foreign adversaries. For Texan officials and US navy personnel, for example, DeepSeek has been banned due to its links to the Chinese government.

However, regulatory action has been slow to gain traction, caught in a web of political disagreements and lobbying pressures. Meanwhile, security agencies warn that inaction could leave critical infrastructure and government institutions vulnerable to AI-driven espionage. Without decisive policies, the US risks becoming not only a prime target for data manipulation and intelligence gathering, but a soft target. It must act to prevent another major data breach, before it finds itself reacting to one. Waiting is not an option.

China’s AI ambitions aren’t slowing down, and global vigilance must not flag. The battle for digital sovereignty is already underway, and governments that hesitate will find themselves at a disadvantage from both economic and security standpoints.

Act now or pay later. AI is the new frontier of global competition, and data is the ultimate weapon. Those who don’t secure it will face the consequences. South Korea made the right move—who’s next?

As Trump sacks scientists, Australia should hire them. US drain is our brain gain

US President Donald Trump, his powerful offsider Elon Musk and his Department of Government Efficiency (DOGE) are slashing public spending in an effort to save US taxpayers anywhere between US$500 billion and US$2 trillion.

Caught up in these enormous cuts are scientists, researchers, medical experts, technologists and PhD scholars who are losing jobs, grants and scholarships at an unprecedented rate as funding streams are cancelled or put on hold.

To date, DOGE has allegedly made only US$105 billion of cuts. This means they have, at minimum, hundreds of billions to go. In the science and technology sector, these early cuts may be just the beginning.

Believe it or not, there is an enormous opportunity for Australia in this unusual situation. If the government acts quickly, this is a once-in-a-century brain gain opportunity.

Australia should take a two-pronged approach. We should attract some of our best and brightest back home from places such as Silicon Valley while also offering fast-track visas to top US-based scientists and researchers who are newly out of a job or low on the funding they need to keep their start-up or scientific lab running.

Australia’s ability to keep up with rapid advances in scientific developments and critical technologies will determine the shape and size of our economy for decades to come. Most of our strategic partners—the United States, Japan, Britain, the European Union and South Korea—are larger and have globally competitive tech sectors they’ve spent decades building. In recent years, these have included artificial intelligence, semiconductors, quantum and biotechnology.

As a mid-sized mining and tourism-dependent economy, Australia has long known we need to diversify our economy and increase our low national spend on research and development, which sits well below the OECD average.  We also know we need greater self-sufficiency so we don’t continue to become over-reliant on any one single market for access to technologies we have deemed ‘critical’ to our future. Building greater sovereign capability in our science and technology sector is a more important goal than ever.

But we are struggling to keep pace with others. We haven’t spent decades investing in building up our tech sector or making big technological bets when we’ve had the opportunity. Things are now moving so quickly that we’re increasingly in danger of being completely left behind.

Coming from behind doesn’t mean we can’t catch up. It does mean, however, that we need to prioritise innovative and out-of-the-box thinking and we must take more risks.

In early 2025, we find ourselves in an unusual situation where our closest ally has, rather unexpectedly, flooded the global market with science and technology talent. The cuts are ongoing and broad, impacting almost everything, including medical schools advancing cancer prevention, high-performance computing, climate and oceanic analysis and the use of AI in national security work.

Other countries will respond to this opportunity quickly. As public funding into universities declines and US universities reduce PhD admissions, top Chinese universities are already proactively recruiting overseas students, allowing undergraduates to skip traditional pathways to fill up PhD programs in areas such as mathematics, engineering, computer science and environmental science.

Canada, seen as a global leader for attracting technology talent, will likely be a key beneficiary of this talent flood. Its variety of visas, low processing times and proactive talent recruitment campaigns is one reason it recently saw 10,000 foreign tech workers in the US apply for permanent residency in Canada in one 48-hour period.

For decades, the US has provided funding and a home for many of our scientists, entrepreneurs and technologists. Now there’s a unique opportunity for us to reverse that brain drain while also increasing our investment in US talent and technologies. In doing so, we’d be contributing to greater burden-sharing in the US-Australia alliance (specifically AUKUS Pillar 2), noting that Australia has long benefited from—even piggybacked—on US scientific advancements and breakthroughs made in everything from health to renewable energies to defence technologies.

In order to identify the types of scientists, researchers and technologists that would be of greatest benefit to Australia and the potential visa options open to them, the Department of Home Affairs should work with our diplomats, our defence, CSIRO and Department of Industry Science and Resources officials, our intelligence community, and others to form a small, agile taskforce.

Minister for Home Affairs Tony Burke should work with parliamentary colleagues and his department to quickly explore options to expand and fast track visas. Visa options must be fast and flexible or we’ll lose out to other countries vying for their expertise.

Australia’s ambassador in the US, Kevin Rudd, and his team are well placed to provide a picture of which top scientists have lost funding. They could work with others in government to promote Australia as a top destination for technology talent while also working collaboratively with the US government to explain how these investments would also benefit them.

The government can play a key knowledge broker role by helping to link up scientific labs and startups with grant opportunities, universities and venture capital firms open to investing in them. In exceptional cases, wealthy individuals should make an extraordinary contribution to Australia’s national interests by partnering with the government to attract outstanding scientists and their teams. This public-private investment may end up helping Australia through the next pandemic, provide us with a leading edge in AUKUS Pillar 2 technologies or devise a cure for Alzheimer’s. It could unearth new methods for environmentally sustainable and cost-competitive extraction of critical minerals. All would provide shared benefit to our alliance with the US and close partnerships.

Knowing Musk’s cuts will continue, the winner of the Australian election should assess and expand this talent drive, particularly given the inevitable benefits to our job market and national prosperity.

In 2025, in the concerning global environment we find ourselves in, a business as usual approach won’t cut it. Australia must be ready to jump on rare opportunities as they arise, take more risks and make big bets.

An enormous opportunity is here now. Soon it will be staring us in the face. It’s time for our parliamentarians to jump.

Amusing ourselves to death

Forty years ago, in a seminal masterpiece titled Amusing Ourselves to Death, US author Neil Postman warned that we had entered a brave new world in which people were enslaved by television and other technology-driven entertainment. The threat of subjugation comes not from the oppressive arm of authoritarian regimes and concentration camps but from our own willing submission and surrender.

‘Big brother does not watch us, by his choice. We watch him, by ours’, Postman wrote in 1985.

There is no need for wardens or gates or Ministries of Truth. When a population becomes distract­ed by trivia, when cultural life is redefined as a perpetual round of entertainments, when serious public conversation becomes a form of baby-talk, when, in short, people become an audience and their public business a vaudeville act, then a nation finds itself at risk; culture-death is a clear possibility.

Postman’s insight would have been spot-on had he written this today about TikTok. Postman was mostly thinking about mass media with a commercial imperative. People would be enslaved to superficial consumerism. But add a technologically advanced authoritarian power with platforms that—unlike terrestrial TV—are essentially borderless and can reach around the globe, and you have George Orwell’s Big Brother put together with Aldous Huxley’s cultural and spiritual entropy.

Addictive digital entertainment can be corrosive even without a malign puppeteer. But with an entity such as the Chinese Communist Party fiddling the algorithms, it could be catastrophic.

Just in 2025, we have seen much of the Western world so spellbound by TikTok that the thought of living without it brought on the anguish normally reserved for the impact of conflict. ‘TikTok refugees’ became a description, as though they had been displaced like Jews fleeing Europe or Yazidis escaping Islamic State.

Postman noted that we were innately prepared to ‘resist a prison when the gates begin to close around us … But what if there are no cries of anguish to be heard? Who is prepared to take arms against a sea of amusements?’

The cries of anguish were depressingly muted as TikTok built up a following in Western countries that now means four in 10 Americans aged under 30 get their news from TikTok, according to a recent survey by the Pew Research Center.

When a ban was flagged, the cries came from those who couldn’t bear to give up the platform and from free speech absolutists who believed any rules amounted to government overreach. If our most popular radio stations had been based in Germany in the late 1930s, the Soviet Union during the Cold War or Syria during the ISIS caliphate, our leaders would have protected the public, regardless of popularity and notwithstanding that it would constitute government intervention in the so-called free market of ideas.

In fact, the market isn’t free because powerful actors can man­ipulate the information landscape.

Billionaire Elon Musk gives free-speech advocates a bad name by posting not just different opinions but promoting false content on issues such as Ukraine on his platform X. But more sinister is a platform such as TikTok, which is headquartered in authoritarian China and ultim­ately at the control of the CCP, with algorithms that have been demonstrated to manipulate audiences by privileging posts that serve Beijing’s strategic interests and downgrading content that does not.

Despite such threats, we have no clear framework to protect ourselves from powerful information platforms, including the newest generative artificial intelligence models such as DeepSeek, which will be increasingly available—and, thanks to their affordability, attractive—despite operating under Chinese government control. As a US court declared in upholding the congressional ban on TikTok, giving a foreign power a vector to shape and influence people’s thinking was a constraint on free speech, not an enabler of it.

Freedoms of speech and expression are core democratic principles but they need active protection. This means the involvement of governments.

US Vice-President JD Vance told the Munich Security Conference that Donald Trump represented a ‘new sheriff in town’ who would defend free speech and ‘will fight to defend your right to offer it in the public square, agree or disagree’. It was an admirable derivative of the quote attributed to Evelyn Beatrice Hall describing Voltaire’s principle of ‘I may not agree with what you say, but I will defend to the death your right to say it’. But just as we have regulators for financial and other markets, we need regulation of our information markets.

By all means, speech should be as free as possible. Awful mustn’t equal unlawful, to borrow Australian Security Intelligence Organisation boss Mike Burgess’ phrase. Speech that hurts the feelings of others or advocates unpopular views cannot be the threshold for censorship. Such lazy and faint-hearted policymaking creates only a more brittle society. But that doesn’t mean we should make ourselves fish in a barrel for malign foreign powers.

Anarchy is not freedom. Governments need to brave the minefield that is modern information technology. If a platform poses risks that cannot be avoided, as with TikTok, it should be banned.

Other platforms that sit within democratic nations’ jurisdictions should be subjected to risk mitigations such as content moderation to deter and punish criminal activity. X, Facebook, Instagram and YouTube can be used as avenues for information operations, as shown by Russia buying advertisements on Facebook or CCP-backed trolls posting on X and YouTube, or be used as vectors for organised crime. Even the most ardent free-speech advocates would agree that drug trafficking, child abuse or joining a terrorist group are illegal offline and therefore should be illegal online.

No marketplace remains free and fair when governments overregulate or abdicate responsibility.

The once-free markets of trade and investment have been eroded by China to such an extent that just this week Trump issued a foreign investment policy to protect US ‘critical technology, critical infrastructure, personal data, and other sensitive areas’ from ‘foreign adversaries such as the PRC’, including by making ‘foreign investment subject to appropriate security provisions’.

A key principle of the new presidential policy is that ‘investment at all costs is not always in the national interest’.

In other words, security measures and rules keep US critical infrastructure free.

While it has not yet gained much media attention, it is among the most important economic security policies ever taken to counter Beijing’s objective to ‘systematically direct and facilitate investment in United States companies and assets to obtain cutting-edge technologies, intellectual property and leverage in strategic industries’, and all of the US’s allies and democratic partners should publicly support it and implement it domestically.

We like to think that technologies are neutral mediums that are only vehicles for improvement. As Postman wrote, this belief often rises to the status of an ideology or faith.

‘All that is required to make it stick is a population that devoutly believes in the inevitability of progress’, he wrote. ‘And in this sense … history is moving us toward some preordained paradise and that technology is the force behind that movement.’

Science and technology have of course delivered extraordinary improvements to our health, our economic productivity, our access to information and our ability to connect with other people regardless of geography—provided we engage with it wisely. We must not become cynical about technology entirely, which is why we must maintain control over it and ensure it serves our interests.

The ultimate solution is knowledge and participation. As Postman concluded, the answer must be found in ‘how we watch’. With no discussion on how to use technology, there has been no ‘public understanding of what information is and how it gives direction to a culture’.

Postman wrote that ‘no medium is excessively dangerous if its users understand what its dangers are’. For that to happen, education was the ‘solution to all dangerous social problems’.

He insisted we were ‘in a race between education and disaster’.

To give education a fighting chance, especially against the predations of technologically capable authoritarian powers, democratic governments need to exert responsible and judicious regulation of technology to perform their most basic duty of protecting the freedom of their citizens.

US cuts to science and technology could fast-track China’s tech dominance

Is the United States now trying to lose the technology race with China? It certainly seems to be.

The race is tight, and now the Trump administration is slashing funding for the three national institutions that have underpinned science and technology (S&T) and what advantage the US still has.

China is outpacing the US in the volume of high-impact research in 57 of the 64 critical technologies in ASPI’s Critical Technology Tracker. The US’s main remaining advantage is downstream in implementing technology, and even that’s at risk as China’s significant S&T investments pay off.

Now the US’s lead may disappear even faster following cuts to the National Institutes of Health (NIH), National Aeronautics and Space Agency (NASA) and National Science Foundation (NSF).

The NIH is the biggest public funder of biomedical research worldwide and impacts global health in ways often taken for granted. For example, it supported the foundational work that led to the Haemophilus influenzae type b vaccine which, by some estimates, prevented 1.2 million infant deaths between 2000 and 2015. NASA is a stalwart of space research and inadvertently has contributed to medical innovations as it has attended to the health of its astronauts, such as the ear thermometer. The NSF funds all non-medical scientific research (biology, quantum computing, artificial intelligence, space and advanced materials) in the US and manages major research facilities.

The NIH stands to lose $4 billion out of the $32 billion already allocated to US research grants in 2024. This $4 billion cut is not just 11.4 percent of the NIH’s research grants; it will also limit its ability to cover indirect costs associated with equipment, maintenance, safety and personnel—everything that keeps world-class research facilities ticking.

According to The New York Times, indirect costs make up 29 percent of grant funds on average. With only 85 out of 613 institutions having indirect costs below 15 percent, a decision to cap indirect costs at 15 percent will at least halve the funds for maintaining labs for most NIH grant recipients.

If you are a grand-slam-winning tennis champion, these indirect costs are akin to the payments for your team of coaches, strategists, medical entourage, all your equipment and access to training facilities. Without these, you won’t stay at number one. It’s the same in the critical technology race.

Typically, labs and other research facilities have state-of-the-art equipment, which have indirect costs commensurate with their level of sophistication. This means that high-level labs—where breakthroughs often happen—have more to lose when funding is cut for indirect costs.

The biggest losers in these cuts will be top US universities, medical schools and hospitals, many of which are among the top 10 institutions in the Tech Tracker for biotechnologies, including MD Anderson Cancer Center, Memorial Sloan Kettering and many teaching hospitals within the Harvard Medical School. The NIH not only provides research funding in the biomedical fields; it also has 27 biomedical research institutions. The NIH combined is currently ranked second for vaccines and medical countermeasures and eighth for genetic engineering in the Critical Technology Tracker, highlighting its global importance and competitiveness.

NIH-funded research has contributed to early detection and prevention of cancers, chemotherapy and immunotherapy. The NIH also helped develop vaccines for flu and RSV (Respiratory Syncytial Virus), as well as the mRNA Covid-19 vaccine. These are the very institutions that the US government will rely on to develop the future vaccines needed to protect Americans from the next global pandemic.

In addition, in early February, biomedical research was again in the firing line with termination letters sent to hundreds of employees at the Centers for Disease Control and Prevention, the Food and Drug Administration, and the NIH. More job cuts are expected to follow, further weakening the sector.

Around the same time, the NSF froze all grant review processes to comply with new directives to end all diversity, equity, and inclusion (DEI) programs. According to the Washington Post, NSF staff were tasked with scrutinising active research grants—preciously approved by peer review—with a list of keywords including ‘women’, ‘diverse’ and ‘institutional’ to reverse any grants remotely related to DEI initiatives.

On 18 February, the haemorrhage of US S&T talent continued with a 10 percent cut to the NSF workforce. Given the NSF’s annual budget of $9 billion, the effect of this cut will be felt across all technologies. The Computer Research Association, for example, predicts devastating consequences for scientific innovation and talent in AI technologies and high performance computing, as the NSF funds 80 percent of fundamental computing research at US institutions. The association credits foundational US technologies behind AI, cybersecurity and quantum technologies to NSF funding.

The Critical Technology Tracker ranks the US first in quantum computing, with seven of the top 10 institutions based in the US. However, quantum technologies are priority areas for China, which unveiled its most advanced quantum computer, a 504-Qubit Superconductor, in December 2024. In 2022, the NSF’s Directorate for Technology, Innovation and Partnerships was set up to accelerate the implementation of NSF-funded discoveries from research to new industries, especially in technologies where the US faced the greatest competition. According to Reuters, the directorate lost 20 percent of its staff last week.

Similarly, NASA, currently ranked first in space launch systems research in the Tech Tracker, may face a 10 percent cut to its specialised workforce. These massive cuts have been put on hold, but if they resume, the loss of talent would be a blow to an important component of the technological race, especially with a worldwide shortage of tech specialists. Historically, US space and satellite companies have benefited from NASA’s decades-long public investments in research and development.

The Economist reported that the scrutiny of DEI programs extended to keywords related to climate change. The National Oceanic and Atmospheric Administration (NOAA) and NASA are therefore expecting major job cuts for their work in climate science and extreme weather patterns. The NOAA plays an important role in weather prediction. Its research on space and sensors is visible in the Tech Tracker across the areas of small satellites, gravitational sensors, and sonar and acoustic sensors.

While the US is cutting its funding, China continues its systematic, long-term investment in critical technologies. Synthetic biology is a sector in which China has the largest lead in the Tech Tracker. Over the past 5 years, China has published 57.7 percent of high-impact research in the field, while the US has produced just 13.1 percent.

Synthetic biology is the design and building of new biological systems. It has applications in many areas, such as agriculture and medicine, which directly affect food security and health. Like quantum computing, synthetic biology is an emerging technology where scientific innovation and intellectual property ownership can determine future industry dominance. Since 2006, China has prioritised synthetic biology and built a tech ecosystem around this emerging technology, comprising research institutes and industry.

As Drew Endy, a synthetic biologist from Stanford University, pointed out, the research infrastructure that China has built to support its all-of-nation approach to emerging biotechnology is now the envy of the world. The contrast between China’s investment strategy and the cuts imposed on the NIH could not be starker.

If the US doesn’t want to lose the S&T race with China, it must review its funding cuts. Reducing the funding envelope to grants organisations that oversee scientific grants, such as the NIH and NSF, will stifle the scientific innovations and breakthroughs that have been central to the rise of the US as a technology superpower.

Countries that have long relied on US technological research may need to step up spending on scientific research, or they, too, will risk being left behind.

Microsoft breakthrough challenges Australia’s quantum strategy

The global strategic landscape is being redrawn not on battlefields, but in the arcane realm of quantum physics. Microsoft’s unveiling last week of Majorana 1 is a technological bombshell: it is the first quantum chip powered by a topological core architecture, ensuring fault resistance.

This breakthrough demands an urgent rethinking of Australia’s move to post-quantum encryption, as it challenges the foundations of our defence and intelligence capabilities.

Quantum computing, with its unparalleled ability to solve problems that are intractable for even the most powerful classical computers, will revolutionise warfare. The potential to break encryption, develop new materials with unprecedented properties and accelerate artificial intelligence has the potential to negate existing strategic advantages and create new vulnerabilities.

The implications are stark and immediate for a nation, such as Australia, that relies heavily on secure communications, advanced materials and cutting-edge intelligence capabilities.

By harnessing the exotic properties of a new type of material called a topoconductor, Microsoft has been able with the Majorana 1 chip to create more reliable and scalable qubits, the fundamental building blocks of quantum computers.

This breakthrough has enabled the company to develop a quantum chip that is not only more stable but also more compact, paving the way for the development of quantum computers capable of tackling real-world problems.

To put this into perspective, the Majorana 1 chip can accommodate eight topological qubits on a chip designed to scale to one million. This is a staggering jump from existing high-end chips, which typically contain only a few dozen qubits. The ability to scale to a million qubits opens up the possibility of solving problems that are currently impossible for even the most powerful supercomputers.

Practical quantum computing has profound implications for Australia’s defence and security.

An advanced ability to break encryption could compromise sensitive government and military communications, as well as critical infrastructure, leaving us even more vulnerable to espionage and sabotage.

The development of new materials with enhanced properties could lead to the creation of advanced weapons systems and defensive technologies, potentially rendering current defence capabilities obsolete and upending the strategic balance.

The acceleration of artificial intelligence could have far-reaching consequences for intelligence gathering, decision-making and autonomous weapons systems, potentially outstripping Australia’s current capabilities and leaving us at a decisive disadvantage.

Advice from the Australian Signals Directorate, as outlined in Australia’s Information Security Manual, and Britain’s National Cyber Security Centre has encouraged the adoption of post-quantum encryption. However, this guidance has often been accompanied by the caveat that the development of cryptographically relevant quantum computers is likely still years away. Consequently, this advice is often framed as relevant for those looking to post-2030 security. The advancements from Microsoft suggest that this timeline may be much shorter than anticipated.

Australia must invest in research and development and devise strategies to mitigate the risks posed by quantum computing. As Microsoft technical fellow Matthias Troyer,  says, ‘From the start, we wanted to make a quantum computer for commercial impact, not just thought leadership. We knew we needed a new qubit. We knew we had to scale.’

Australia needs a proactive and comprehensive approach to quantum computing, encompassing six key elements: accelerated research and development; cybersecurity resilience; strategic partnerships; workforce development; ethical frameworks; and rigorous self-regulation.

Increased investment in quantum computing research and development would ensure that Australia does not fall behind in the technology race. This investment should prioritise the development of quantum hardware and software, as well as the exploration of new applications and mitigation strategies.

Strengthening cybersecurity infrastructure and embracing global standards for quantum-resistant encryption algorithms would protect sensitive data and critical infrastructure from potential attacks. Australia must balance the use of global standards with investment in sovereign capabilities to avoid dependence on foreign technologies, which could be compromised or withheld in a conflict.

Collaboration with allies and partners, particularly the United States and Britain, would allow us to share knowledge, pool resources and develop a coordinated approach to face the challenges and seize the opportunities of quantum computing.

Investing in quantum education and workforce development would ensure that we have a skilled workforce capable of harnessing the potential of quantum. It would also help us to navigate the complexities of this new technology and maintain our competitive edge.

The development and deployment of quantum computing must be guided by robust ethical frameworks, ensuring that the technology is used for the benefit of humanity and does not exacerbate existing inequalities or create new risks.

Fostering a culture of responsible innovation and self-regulation within the quantum computing industry would maintain public trust and ensure ethical development and deployment of quantum capabilities.

Microsoft’s Majorana 1 chip is here and is real. The quantum revolution is not a distant prospect; it is unfolding before our eyes. Its implications for national security and our national well-being are profound and far-reaching. Australia needs to harness the transformative power of quantum computing while mitigating its risks. Our nation’s security, and indeed our place in the world, may depend on it.

Australia needs Australian AI

Australia must do more to shape its artificial intelligence future. The release of DeepSeek is a stark reminder that if Australia does not invest in its own AI solutions, it will remain reliant on foreign technology—technology that may not align with its values and often carries the imprints of its country of origin.

This reliance means that Australian user data and the economic benefits derived from it will continue to flow offshore, subject to foreign legal jurisdictions and foreign corporate priorities.

When people engage with AI chatbot assistant-type services from platforms such as ChatGPT, Gemini, Copilot or DeepSeek—via web interfaces, mobile apps, or application programming interfaces (or APIs)—they are sharing their data with these services as well as receiving AI-generated responses. The market entry of DeepSeek, which stores its data in China and moderates its responses to align with Chinese Communist Party narratives, raises two critical concerns: the exploitation of data for foreign interests and the ability of AI-generated content to shape public discourse.

AI platforms not based in Australia operate under the legal frameworks of their home countries. In the case of DeepSeek, this means compliance with China’s national intelligence laws, which require firms to provide data to the government on request. User inputs including text, audio and uploaded files, and user information such as registration details, unique device identifiers, IP address and even behavioural inputs like keystroke patterns, could be accessed by Chinese authorities. The flow of Australian data into China’s data ecosystem poses a long-term risk that should not be overlooked.

While individual data points may seem insignificant on their own, in aggregate they provide valuable insights that could be leveraged in ways contrary to Australian interests. As a 2024 ASPI report found, the CCP seeks to harvest user data from globally popular Chinese apps, games and online platforms, to ‘gauge the pulse of public opinion’, gain insight into societal trends and preferences, and thereby improve its propaganda.

This may be even more powerful for chatbots, which can collect data for aggregation to understand audience sentiment in particular countries, and also be used as a tool for influence in those countries. AI models are shaped by the priorities of their developers, the datasets they are trained on, and the fine-tuning processes that refine their outputs. This means AI does not just provide information, it can be trained to reinforce particular narratives while omitting others.

Many chatbots include a safety layer to filter harmful content such as instructions for making drugs or weapons. In the case of DeepSeek, this moderation extends to political censorship. The model refuses to discuss politically sensitive topics such as the 1989 Tiananmen Square protests and aligns with official CCP positions on topics such as Taiwan and territorial disputes in the South China Sea. AI-generated narratives influence public perception, which can pose risks to the democratic process and social cohesion, especially as these tools become more commonly embedded in search engines, education and customer service.

Australia’s response should be about having the right safeguards in place to mitigate known risks. It needs to ensure that AI systems used in the country reflect its values, security interests, and regulatory standards. This challenge demands that Australia play an active role in AI development and implement regulatory frameworks that protect against harms and foster domestic innovation.

DeepSeek challenges the idea that only tech giants with massive resources can develop competitive AI models. With a team of just 300, DeepSeek reportedly developed its model for less than US$6 million, far less than the $40 million training cost of OpenAI’s GPT-4, or the $22 million cost for training Mistral’s Mistral Large. While some experts argue this figure may not reflect the full cost—including potential access to restricted advanced processors before US export controls took effect—the broader lesson is clear: significant AI advances are possible without vast financial backing.

DeepSeek has proven that having talent is even more important than having tech giants, which highlights an opportunity for Australia to participate meaningfully in AI development.

To harness its potential, Australia must foster an environment that nurtures homegrown talent and innovation. The announcement last week of the $32 million investment by Australian AI healthtech firm Harrison.ai by the National Reconstruction Fund is a step in the right direction, but investment in a single company is not enough.

Australia needs increased investment in education and research, strengthening existing developer communities—particularly open-source initiatives—supporting commercialisation efforts, and promoting success stories to build momentum. A well-supported AI sector would allow Australia to harness the benefits of AI without attempting to match the spending power of global tech giants. The focus should be on fostering an environment where AI talent can thrive and ethical AI can flourish, ensuring that Australia reaps both the economic and societal benefits.

Without strategic investment in domestic AI capabilities, Australia risks ceding influence over critical technologies that will shape its economy, security and society in the years ahead. The challenge is not just technological—it is strategic. Without decisive action, Australia will remain a passive consumer of AI technologies shaped by foreign priorities and foreign commercial interests, with long-term consequences for democratic integrity, economic security and public trust in AI-driven systems.

Meeting this challenge requires more than just regulatory safeguards; it demands sustained support for a strong domestic tech ecosystem.

The crisis in Western AI is real

The release of the Chinese DeepSeek-R1 large language model, with its impressive capabilities and low development cost, shocked financial markets and led to claims of a ‘Sputnik moment’ in artificial intelligence. But a powerful, innovative Chinese model achieving parity with US products should come as no surprise. It is the predictable result of a major US and Western policy failure, for which the AI industry itself bears much of the blame.

China’s growing AI capabilities were well known to the AI research community, and even to the interested public. After all, Chinese AI researchers and companies have been remarkably open about their progress, publishing papers, open-sourcing their software and speaking with US researchers and journalists. A New York Times article from last July was headlined, ‘China Is Closing the AI Gap with the United States’.

Two factors explain China’s achievement of near parity. First, China has an aggressive, coherent national policy to reach self-sufficiency and technical superiority across the entire digital technology stack, from semiconductor capital equipment and AI processors to hardware products and AI models—and in both commercial and military applications. Second, US (and EU) government policies and industry behavior have exhibited a depressing combination of complacency, incompetence and greed.

It should be obvious that Chinese President Xi Jinping and Russian President Vladimir Putin are no friends of the West and that AI will drive enormously consequential economic and military transformations. Given the stakes involved, maintaining AI leadership within democratic advanced economies justifies, and even demands, an enormous public-private strategic mobilisation on the scale of the Manhattan Project, NATO, various energy-independence efforts, or nuclear-weapons policies. Yet the West is doing the opposite.

In the US, government and academic research in AI are falling behind both China and the private sector. Owing to inadequate funding, neither government agencies nor universities can compete with the salaries and computing facilities offered by the likes of Google, Meta, OpenAI, or their Chinese counterparts. Moreover, US immigration policy toward graduate students and researchers is self-defeating and nonsensical, because it forces highly talented people to leave the country at the end of their studies.

Then there is the US policy on regulating Chinese access to AI-related technology. Export controls have been slow to appear, wholly inadequate, poorly staffed, easily evaded, and under-enforced. Chinese access to US AI technologies through services and licensing agreements has remained nearly unregulated, even when the underlying technologies, such as Nvidia processors, are themselves subject to export controls. The US announced stricter licensing rules just a week before former President Joe Biden left office.

Finally, US policy ignores the fact that AI R&D must be strongly supported, used, and, where necessary, regulated throughout the private sector, the government, and the military. The US still has no AI or IT equivalent of the Department of Energy, the National Institutes of Health, NASA, or the national laboratories that conduct (and tightly control) US nuclear-weapons R&D.

This situation is partly the result of sclerotic government bureaucracies in both the European Union and the US. The EU technology sector is severely overregulated, and the US Departments of Defense and Commerce, among other agencies, need reform.

Here, the tech industry is somewhat justified in criticising their governments. But the industry itself is not blameless: over time, lobbying efforts and revolving-door personnel appointments have weakened the capabilities of critically important public institutions. Many of the problems with US policy reflect the industry’s own resistance or neglect. In critical ways, it has been its own worst enemy, as well as the enemy of the West’s long-term security.

For example, ASML (the Dutch maker of state-of-the-art lithography machines used in chip manufacturing) and the US-based semiconductor-equipment supplier Applied Materials both lobbied to weaken export controls on semiconductor capital equipment, thus assisting China in its effort to displace TSMC, Nvidia and Intel. Not to be outdone, Nvidia designed special chips for the Chinese market that performed just slightly below the threshold set by export restrictions; these were then used to train DeepSeek-R1. And at the level of AI models, Meta and the venture capital firm Andreessen Horowitz have lobbied fiercely to prevent any limits on open-source products.

At least in public, the industry’s line has been: ‘the government is hopeless, but if you leave us alone, everything will be fine’. Yet things are not fine. China has nearly caught up with the US, and it is already ahead of Europe. Moreover, the US government is not hopeless, and must be enlisted to help. Historically, federal and academic research and development compare very favourably with private-sector efforts.

The internet, after all, was pioneered by the US Advanced Research Projects Agency (now DARPA), and the World Wide Web emerged from the European Organisation for Nuclear Research. Netscape co-founder Marc Andreessen created the first web browser at a federally funded supercomputer center within a public university. Meanwhile, private industry gave us online services such as CompuServe, Prodigy and AOL—centralised, closed, mutually incompatible walled gardens that were justly obliterated when the internet was opened to commercial use.

The challenges of AI research and development and China’s rise require a forceful, serious response. Where government capacity falls short, we need to bolster it; not destroy it. We need to pay competitive salaries for government and academic work; modernise US (and EU) technology infrastructure and procedures; create robust research and development capacity within the government, particularly for military applications; strengthen academic research; and implement rational policies for immigration, AI research and development funding, safety testing and export controls.

The one truly difficult policy problem is openness, particularly open-source licensing. We cannot let everyone have access to models optimised for hunter-killer drone attacks; nor, however, can we stamp ‘top secret’ on every model. We need to find a pragmatic middle ground, perhaps relying on national defence research laboratories and carefully crafted export controls for intermediate cases. Above all, we need the AI industry to realise that if we don’t hang together, we will hang separately.

Will DeepSeek upend US tech dominance?

In 1957, the Soviet Union launched the world’s first artificial satellite into orbit, sparking fears in the United States that, unless it took radical action to accelerate innovation, its Cold War adversary would leave it in the technological dust. Now, the Chinese startup DeepSeek has built an artificial intelligence model that it claims can outperform industry-leading US competitors, at a fraction of the cost, leading some commentators to proclaim that another ‘Sputnik moment’ has arrived.

But the focus on the US-China geopolitical rivalry misses the point. Rather than viewing DeepSeek as a stand-in for China, and established industry leaders (such as OpenAI, Meta and Anthropic) as representatives of the US, we should see this as a case of an ingenious startup emerging to challenge oligopolistic incumbents—a dynamic that is typically welcomed in open markets.

DeepSeek has proved that software ingenuity can compensate, at least partly, for hardware deficiencies. Its achievement raises an uncomfortable question: why haven’t leading US industry leaders achieved similar breakthroughs? Nobel laureate economist Daron Acemoglu points the finger at groupthink, which he says prevented Silicon Valley incumbents from adequately considering alternative approaches. He might have a point, but it is only half the story.

DeepSeek’s success didn’t happen overnight. In May 2024, the firm launched its V2 model, which boasted an exceptional cost-to-performance ratio and sparked a fierce price war among Chinese AI providers. Moreover, over the last year or so, Chinese firms—both giants (including Alibaba, Tencent and ByteDance) and startups (such as Moonshot AI, Zhipu AI, Baichuan AI, MiniMax and 01.AI)—have all developed cutting-edge AI models with remarkable cost efficiency.

Even within the US, researchers have long explored ways to improve the efficiency—and thus lower the costs—of AI training. For example, in 2022, former Meta researcher Tim Dettmers, now at the Allen Institute for Artificial Intelligence, and his co-authors published research on optimising AI models to run on less computing power. DeepSeek cited their research in the technical paper it released along with its V3 model.

Put simply, it would have been impossible for any AI firm—especially an industry leader—not to realise that lower-cost models were feasible. But US AI developers showed much less interest than their Chinese counterparts in pursuing this line of innovation. This was not a matter only of insularity or hubris; it appears to be a deliberate business choice.

AI development has so far been defined by the scaling law, which predicts that more computing power leads to more powerful models. This has fuelled demand for high-performance semiconductor chips, with more than 80 percent of the funds raised by many AI companies going toward computing resources.

That is why the biggest winner has been the advanced chipmaker Nvidia, which claimed 90 percent of the market for AI graphics processing units by the end of last year. Thanks to this virtual monopoly in the hardware layer, Nvidia could control the foundations of generative AI. The cloud-computing sector, which provides the on-demand computing power AI models require, is similarly concentrated, with Amazon, Google and Microsoft dominating the market.

But these upstream players aren’t just passive suppliers. They have strategically positioned themselves across the AI value chain by acquiring, investing in, or forming alliances with leading AI model developers. Nvidia has invested in OpenAI, Mistral, Perplexity and others. Google not only develops its own AI models, but also holds a stake in Anthropic, OpenAI’s main competitor. And Microsoft, an early OpenAI investor, recently backed Inflection AI in the US and expanded overseas, with investments in France’s Mistral and the United Arab Emirates’ G42.

Taking this approach has ensured that the entire AI industry depends on a few giant firms and entrenched a dynamic whereby rising demand for computing power across the sector increases these firms’ profits. As dominant players, they had less incentive to improve cost efficiency downstream, which could cut into their upstream profits.

Chinese AI firms have been operating within an entirely different reality, as US-led trade restrictions have prevented them from purchasing the most advanced chips. The goal of US export controls has always been to cripple China’s AI sector. But, as DeepSeek has shown, they have had the opposite effect, spurring precisely the innovations that will enable Chinese firms to challenge American AI oligopolies. Already, DeepSeek’s rise triggered a stock-market selloff of AI-related US companies, not least Nvidia.

This is surely unwelcome news for US President Donald Trump’s administration. Trump has made no secret of his determination to contain China, including by fulfilling his promise to impose a 10 percent across-the-board import tariff on Chinese goods. And he has heavily courted Silicon Valley bosses—once aligned with the Democratic Party—who have eagerly embraced the prospect of lax regulation.

But that does not mean that DeepSeek’s rise is bad news for the US or the AI industry more broadly. Over the past five years, calls to rein in the US’s tech giants have been growing louder. Despite the best efforts of former President Joe Biden’s administration, however, the US Congress has failed to introduce any meaningful legislation on this front. Ironically, thanks to US policies designed to constrain China’s AI ambitions, the US AI sector seems set to get some of the market competition that it so badly needs.

Geopolitics might have contributed to DeepSeek’s rise. But the firm’s disruption of the AI industry is about market—not great-power—competition.

Democracies should learn the TikTok lesson and restrict risky apps from day one

With its recent halt on implementing a legally mandated ban on TikTok, the United States is learning the hard way that when it comes to Chinese technology, an ounce of prevention is worth a pound of cure.

The US and like-minded democracies should no longer permit any social media platforms with direct ties to authoritarian governments with political censorship regimes to operate without restriction.

For years, technology and national security analysts have sketched out scenarios of what might happen if a democratic population were to become dependent on a Chinese-owned technology. Once such a technology becomes embedded in people’s daily lives and livelihoods, removing it stirs up a host of domestic political controversies, making it politically untenable to mitigate the national security risks.

That is exactly what has happened with TikTok. Around 170 million Americans—about half the country’s population and an even higher percentage of those using social media—use the short video app, owned by Chinese tech giant ByteDance. Millions of Americans have become dependent on their TikTok followings, built up over years, for their income or to promote their businesses. Tens of millions more use TikTok as a key source of information, community, and entertainment.

In classic American fashion, those users have refused to go gentle into that good night. As a law banning TikTok was set to go into effect on 19 January, many users downloaded the Chinese social media app RedNote, which isn’t just Chinese-owned—it is Chinese itself, based in Shanghai and subject to all Chinese national security and intelligence laws. Self-styled ‘TikTok refugees’ said they moved to RedNote to express their disregard for US government concern about the risks presented by Chinese companies. Overnight, RedNote, which presents even clearer security risks than TikTok, became the top download on the Apple app store in the US.

TikTok called on US President Donald Trump to offer a reprieve, and he did. On his first day in office, Trump signed an executive order authorising a 75-day extension on the law taking effect.

But it’s unclear what will happen next. We will need to see how a Trump administration navigates this issue. The law mandates either a forced divestiture or a ban. A previous US effort to force the sale of TikTok failed when the Chinese government issued new rules requiring Chinese companies to obtain a license for such a sale. Beijing did not grant ByteDance a license, effectively blocking the sale. Discussions are now reportedly underway for the sale of a 50 percent stake in TikTok to a US company, but that would not fulfill the law’s requirements.

This situation demonstrates the need to act early to inhibit the widespread adoption of social media platforms tied to authoritarian governments, such as Russia and China, that implement sweeping surveillance, censorship and manipulation of public opinion.

Western governments had all the information they needed about the risks of social media apps operating under authoritarian systems when TikTok took off in 2018—the year it became one of the world’s most downloaded apps. That was the time to act—the same time action was being taken to prevent Huawei from dominating the 5G telecommunications sector. The question now is whether we learn from our failures. While it’s too late to prevent TikTok from becoming a beloved American online space, it’s not too late to prevent the widespread adoption of similarly problematic apps. RedNote, for example, remains untouched, as do a host of other Chinese platforms.

The main argument against a sweeping ban on problematic foreign-owned apps is that this would infringe on free speech. But the opposite is true—as the US Court of Appeals essentially found. A social media platform under the sway of a foreign government obsessed with censorship and surveillance is an impediment to free speech. Democratic governments should act to preserve free speech by preventing these platforms from dominating online spaces.

Trade experts and economists understand that free markets don’t just happen naturally; creating and preserving a free market requires a strong government hand. There must be laws against unfair market behavior, mechanisms to bring cases against potential violators, means to investigate those claims, and strong enforcement. Sometimes the biggest violators are governments themselves.

In the same way, a free speech environment doesn’t happen naturally. There must be laws and practices in place to protect it. Put another way, it sometimes takes a strong government hand to create and preserve a free market for speech. As with free markets, sometimes the biggest violators of free speech are governments. And just as the public in a democracy has the ultimate power to vote out its own government for violating freedoms, protecting the public from foreign regimes and their intelligence services is the job of democratic governments.

The Chinese government has no right to censor or manipulate information on US soil. The Trump administration should act as soon as possible to ensure that no other social media companies linked to authoritarian governments can again play host to America’s virtual public square.