PART II: WINNING THE TECHNOLOGY COMPETITION
Chapter 14: Technology Protection
Following is a summary of Part II, Chapter 14 of the National Security Commission on Artificial Intelligence's final report. Use the below links to access a PDF version of the Chapter, Blueprint for Action, and the Commission's Full Report.
America’s ability to out-innovate competitors is the dominant component of any U.S. strategy for technology leadership. Promoting research, entrepreneurship, and talent development remain the key ingredients of success.
However, as the margin of U.S. technological advantage narrows and foreign efforts to acquire American know how and technology increase, the United States must also reexamine how it can protect ideas, hardware, companies, and its values.
The United States confronts sustained threats from state-directed technology transfer and theft targeting artificial intelligence (AI) and other cutting-edge, dual-use technologies and basic research.
The United States confronts sustained threats from state-directed technology transfer and theft targeting artificial intelligence (AI) and other cutting-edge, dual-use technologies and basic research. China poses the most significant challenge. The Chinese Communist Party (CCP) has embarked on a multi-pronged campaign of licit and illicit technology transfer to become a “science and technology superpower” by 2050.1 The campaign deliberately targets U.S. critical sectors, companies, and research institutions.2 China’s theft of U.S. technology—be it through circumventing export controls, commercial deals with U.S. companies to access intellectual property (IP), or espionage—costs the United States $300 billion to $600 billion per year.3 And that only captures immediate losses, not the ongoing damage to the U.S. economy over time.
China simultaneously exploits open research environments through cyber-enabled intrusion, talent recruitment programs, and manipulated research partnerships.4 In effect, China is using American taxpayers’ dollars to fund its military and economic modernization.
Russia also poses a significant illicit technology transfer threat, particularly as it relates to technologies with defense applications. Although the Russian government’s efforts to steal U.S. technology and IP do not operate at the same scale of comparable CCP efforts, Russia nonetheless is an aggressive and capable collector of technologies. It is likely to pose continued technology transfer threats over the coming decade, utilizing existing commercial and academic entities, as well as traditional and cyber espionage.5
Modernizing Export Controls and Investment Screening
How the United States designs policies to limit the movement of commercial goods or capital in the interests of national security will be one of the defining challenges of the next decade, as dual-use commercial technologies become increasingly important to national security. Export controls can and should be utilized not only to prevent the transfer of particularly sensitive equipment to strategic competitors, but also to slow competitors’ efforts to develop indigenous industries in sensitive technologies with defense applications.
If executed properly, export controls that slow competitors can sustain existing U.S. defense advantages over long periods of time. However, as currently designed and utilized, U.S. export controls and investment screening procedures are imperfect instruments for the AI competition.
AI is dual-use and the emerging technology economies of the United States and China are deeply interconnected, which makes it extremely difficult to design controls that are feasible, maximize strategic impact, and minimize economic costs. While these tradeoffs are not new, they are becoming more extreme, as the dual-use nature of AI means many of its individual components most critical to national security are also commonplace in the commercial sector.
Meanwhile, U.S. regulatory capacity has not kept pace with technical developments, as the Departments of Commerce, Treasury, and State all lack sufficient technical and analytical capacity to effectively design and efficiently enforce technology protection policies on dual-use emerging technologies.
Congress has taken some important steps in recent years to adapt technology protection regimes to challenges posed by emerging technologies, most notably the Export Control Reform Act of 2018 (ECRA) and the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).6 However, more than two years after their passage, implementation of key aspects of both laws remains unfinished, hindering enforcement and confounding the affected industries.7
These conditions present policymakers with a difficult choice between under-protection, which will give competitors unacceptable levels of access to sensitive technologies, and over-protection, which has the potential to stifle innovation and harm overall U.S. competitiveness.
The Government Should
Align the export control policies of the United States, the Netherlands, and Japan regarding SME.
The Departments of State and Commerce should work with the governments of the Netherlands and Japan to align the export licensing processes of all three countries regarding high-end SME, particularly EUV and ArF immersion lithography equipment, toward a policy of presumptive denial of licenses for exports of such equipment to China.
Strengthening Research Protection
The U.S. research enterprise should be protected as a national asset. China’s campaign to exploit U.S.-based research violates the research community’s core principles of integrity, openness, accountability, and fairness.8 U.S. response measures to counter the actions of China’s government are nascent.9
There is a need for more technically versed intelligence collection and analysis on threats to the science and technology sector and a need to disseminate that information more broadly.10 Government agencies, law enforcement, and research institutions need ready access to tools and resources to conduct nuanced risk assessment and build transparency around specific threats and tactics.
The government and research institutions share responsibility for protecting core values and countering malicious activities. Responses should be coordinated with like-minded allies and partners to reinforce norms around openness of fundamental research, research integrity, and protection of IP.
Strengthening the integrity of the research process will support the foundations of open research. However, if not approached thoughtfully, U.S. policy actions to counter technology transfer could harm U.S. competitiveness and global scientific progress.
Countering the CCP’s actions does not require severing most ties between research communities in China and the United States. The United States benefits from collaboration by staying connected with cutting-edge work in China and welcoming their PhD-level top talent11 that comes to study at U.S. universities and remains in the United States at rates of 85% to 90% after graduating.12
The Government Should
Build capacity to protect the integrity of the U.S. research environment.
Congress should start by passing the Academic Research Protection Act (ARPA) and establishing a government-sponsored center of excellence on research security.13 The ARPA legislation would create a dedicated National Commission on Research Protection, improve dissemination of open-source intelligence relating to foreign threats, and facilitate the sharing of studies and practices between government and research organizations.
Coordinate research protection efforts internationally with allies and partners.
The Office of Science and Technology Policy, the Department of State, and the Department of Justice should coordinate with allies and partners to further information-sharing on detrimental academic collaboration with entities affiliated with China’s People’s Liberation Army (PLA) and develop multilateral responses to mitigate the harm from these actions.
Counter foreign talent recruitment programs.
We commend recent action by Congress to limit the detrimental impact of these programs by mandating standardized disclosure requirements for federally funded research that will require comprehensive disclosure of conflicts of interest, conflicts of commitment, and all outside and foreign support.14
Strengthen visa vetting to limit problematic research collaborations.
The United States should guard against the entrance of researchers with problematic affiliations through implementation of a special review process for visa applications from advanced-degree students and researchers with ties to research institutions affiliated with foreign military and intelligence organizations of designated countries of concern.36.15
1 Outline of the National Innovation-Driven Development Strategy, Central Committee of the Communist Party of China and the PRC State Council (May 19, 2016) (translation by CSET on Dec. 11, 2019), https://cset.georgetown.edu/research/outline-of-the-national-innovation-driven-development-strategy/. 2 Deputy Assistant Attorney General Adam S. Hickey of the National Security Division Delivers Remarks at the Fifth National Conference on CFIUS and Team Telecom, U.S. Department of Justice (April 24, 2019), https://www.justice.gov/opa/speech/deputy-assistant-attorney-general-adam-s-hickey-national-security-division-delivers-0. 3 China Theft of Technology is Biggest Law Enforcement Threat to U.S., FBI Says, The Guardian (Feb. 6, 2020), https://www.theguardian.com/world/2020/feb/06/china-technology-theft-fbi-biggest-threat (quoting William Evanina, director of the National Counterintelligence and Security Center). 4 A recent JASON study on the issue found that “[a]ctions of the Chinese government and its institutions that are not in accord with U.S. values of science ethics have raised concerns about foreign influence in the U.S. academic sector . . . there are problems with respect to research transparency, lack of reciprocity in collaborations and consortia, and reporting of commitments and potential conflicts of interest, related to these actions.” JASON, Fundamental Research Security, MITRE Corporation at 39 (Dec. 2019), https://www.nsf.gov/news/special_reports/jasonse13curity/JSR-19-2IFundamentalResearchSecurity_12062019FINAL.pdf. 5 In 2018 the U.S. National Counterintelligence and Security Center stated: “The threat to U.S. technology from Russia will continue over the coming years as Moscow attempts to bolster an economy struggling with endemic corruption, state control, and a loss of talent departing for jobs abroad.” Foreign Economic Espionage in Cyberspace, National Counterintelligence and Security Center at 8 (2018), https://s3-us-west-2.amazonaws.com/cyberscoop-media/wp-content/uploads/201 8/07/26114025/2018ForeignEconomic-Espionage-Pub_FINAL.pdf.
6 See Pub. L. 115-232, Title XVII, Subtitle B, 132 Stat. 1636, 2208, as amended by Pub. L. 116-6, Division H, Title II, Section 205 Consolidated Appropriations Act, 2019, 133 Stat. 13, 476; Pub. L. 115-232, Title XVII, Subtitle A, 132 Stat. 1636, 2174. 7 Of particular note, ECRA requires the Department of Commerce to identify “emerging and foundational technologies that are essential to the national security of the United States” that are not otherwise controlled, but to date Commerce has not identified a single technology under this provision. This has left gaps in the U.S. approach to protecting its advantages in high-tech sectors, including AI, and created uncertainty for industry. See Pub. L. 115-232, Title XVII, Subtitle B, 132 Stat. 1636, 2208, as amended by Pub. L. 116-6, Division H, Title II, Section 205 Consolidated Appropriations Act, 2019, 133 Stat. 13, 476.
8 JASON, Fundamental Research Security, MITRE Corporation (Dec. 2019), https://www.nsf.gov/news/special_reports/jasonsecurity/JSR-19-2IFundamentalResearchSecurity_12062019FINAL.pdf. 9 Promising efforts have been initiated through the National Counterintelligence Task Force and the Office of Science and Technology Policy’s Joint Committee on Research Environments, as well as among universities, to build communities of interest to share best practices and conduct internal audits around disclosure policies and cybersecurity. See National Science and Technology Council, The White House (last accessed Jan. 1, 2021), https://www.whitehouse.gov/ostp/nstc/, and the Academic Security and Counter Exploitation Program launched by the Texas A&M University System, Academic Security and Counter Exploitation Program, Texas A&M University (last accessed Jan. 11, 2021), https://asce.tamus.edu/. 10 Chapter 5 of this report recommends that the Intelligence Community (IC) should prioritize and accelerate collection of scientific and technical intelligence to better understand adversary capabilities and intentions.
11 The Commission supports measures to strengthen the ability of the United States to attract and retain top AI talent coming from China and elsewhere. See Chapter 10 of this report. 12 Remco Zwetsloot, U.S.-China STEM Talent “Decoupling,” Johns Hopkins Applied Physics Laboratory at 13 (2020), https://www.jhuapl.edu/assessing-us-china-technology-connections/dist/407b0211ec49299608551326041488d4.pdf.
13 See H.R. 8346, Academic Research Protection Act, 116th Congress (2020), https://www.congress.gov/bill/116th-congress/house-bill/8346. The legislation sought to establish a National Commission on Research Protection; establish an open-source intelligence clearinghouse relating to foreign threats to academic research overseen by the Director of National Intelligence (DNI); improve guidance from the Departments of State and Commerce to ensure academic institutions are meeting export-control responsibilities; and develop a Federal Bureau of Investigation (FBI) outreach strategy on threats to the academic community.
14 See Pub. L. 116-283, sec. 223, William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, 134 Stat. 3388 (2021).
15 The Commission recommends this as an update to Presidential Proclamation 10043 that suspends F or J visas to study or conduct research for Chinese nationals affiliated with the Chinese government military-civil fusion strategy. 85 Fed. Reg. 34353, Suspension of Entry as Nonimmigrants of Certain Students and Researchers from the People’s Republic of China, Executive Office of the President (May 29, 2020), https://www.federalregister.gov/documents/2020/06/04/2020-12217/suspension-of-entry-as-nonimmigrants-of-certain-students-and-researchers-from-the-peoples-republic.