Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg
Speaker 1: BusinessWeek with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 1: We begin this hour with the latest on the fallout
Speaker 1: from the Microsoft SharePoint security issue. Microsoft saying that a
Speaker 1: Chinese hacking group exploiting security vulnerabilities in the company's SharePoint
Speaker 1: servers to deploy ransomware follows a cyber attack discovered last week. Carol,
Speaker 1: this cyber attack has affected hundreds of entities around the world,
Speaker 1: including about four hundred government agencies, corporations, and other groups.
Speaker 1: That's according to estimates from the security firm I Security,
Speaker 1: including the National Nuclear Security Administration.
Speaker 2: That's right, that USA agency is responsible for maintaining and
Speaker 2: designing the nation's cash of nuclear weapons that was among
Speaker 2: those breached. For more, let's bring in Jennifer Ubanks. She's
Speaker 2: the founder of Adaman Strategic Advisors. They advised companies and
Speaker 2: clients on cyber resilience, digital trends, information, and geopolitical risk.
Speaker 2: She spent great background more than three decades and tech,
Speaker 2: intelligence and national security, and served as the Deputy Director
Speaker 2: of the CIA for Digital Innovation from twenty nineteen through
Speaker 2: twenty twenty four. She joins us from Virginia. So great
Speaker 2: to have you with us. We've been dying to kind
Speaker 2: of do a little bit of a deeper dive into
Speaker 2: this story. This was a serious attack. I am curious
Speaker 2: about how you are seeing it and kind of the
Speaker 2: level that it seemed to be able to penetrate.
Speaker 3: Yeah, it's a great question, and thanks for the invitation today, Carol.
Speaker 3: You hit the high points in the introduction. I think
Speaker 3: that's really important. But I'm going to just shape it
Speaker 3: slightly differently and say that I think we'll look back
Speaker 3: on this breach as one of those milestone ones that
Speaker 3: where you measure the developments of strategic attempts to infiltrate
Speaker 3: our networks and our systems. We'll look back on it
Speaker 3: like solar winds, like the exchange server.
Speaker 4: Compromise in twenty twenty one.
Speaker 3: So what is most interesting to me here is that
Speaker 3: this was looked like an espionage operation, classic espionage to
Speaker 3: collect information, sensitive data, intellectual property, you name, it launched
Speaker 3: by three government affiliated entities, and then, as you mentioned,
Speaker 3: just about six days ago, about six days ago, it
Speaker 3: has flipped to ransomware. One of those three entities has
Speaker 3: started dropping ransomware on affected servers and then you know,
Speaker 3: demanding ransom extortion.
Speaker 4: So this is really something new that we've not seen previously.
Speaker 2: Can I just ask you China, you know Microsoft accusing
Speaker 2: hackers associated with the Chinese government of breaking into computer
Speaker 2: systems from your work in the government, it's China, our friend,
Speaker 2: And I asked that kind of instantly, naively, but I
Speaker 2: kind of know the answer. But tell me from a
Speaker 2: government perspective, how you look at China and how especially
Speaker 2: didn't we just open up in video chips to go
Speaker 2: back to China, Like, how do you look at what
Speaker 2: is the right relationship, especially with advanced technology American technology,
Speaker 2: how we should be.
Speaker 3: Yeah, that's a really complex question, and I'm going to
Speaker 3: hit it first from the cyber perspective, since as we're
Speaker 3: talking about this massive breach today and in terms of
Speaker 3: cyber capabilities, the People's Republic of China is amongst the
Speaker 3: most capable, most aggressive, most ambitious, most well resourced kind
Speaker 3: of actors anywhere in the world. If you took and
Speaker 3: there's a scale issue here, if you took all of
Speaker 3: the cyber actors affiliated with the Chinese government, it probably
Speaker 3: outnumbers everything in the US and all of our allies
Speaker 3: could bring to the fight together. The scale is really huge.
Speaker 3: And these three entities that have been identified by Microsoft
Speaker 3: are two the names don't really matter to all the
Speaker 3: viewers perhaps, but Linen Typhoon and Violet Typhoon they've been
Speaker 3: seen for a long time. They're considered advanced persistent threats.
Speaker 3: They have their own apt moniker numbers. The other is
Speaker 3: Storm twenty six oh three, if I'm not mistaken, twenty
Speaker 3: six oh three, and that's less visible, and it hints
Speaker 3: at this ecosystem that has taken shape in the People's
Speaker 3: Republic of China, where they have scaled their cyber operations
Speaker 3: globally by tapping into contract hackers. So each of these
Speaker 3: government entities in each province around the country can then
Speaker 3: reach out to contractors in pretty large numbers. And then
Speaker 3: the other interesting thing in that is that within that
Speaker 3: contractor ecosystem are also criminal actors. So there's this weird
Speaker 3: overlap between government contract entities and criminal entities such that
Speaker 3: the lines are becoming blurred. And that's one of the
Speaker 3: really interesting things about this particular breach, because we're seeing
Speaker 3: what looked like classic espionage sort of government on government
Speaker 3: or China of course, considers commercial espionage to be national
Speaker 3: security operations, so collecting on commercial interests, but then flipping
Speaker 3: to ransomware that starts to raise questions about what's going.
Speaker 1: On here, Jennifer. I've been doing this show with Carol
Speaker 1: for almost five years at this point, so I can
Speaker 1: steal a question from you that I know you're thinking about.
Speaker 1: It's something that you remind us of all the time, Carol,
Speaker 1: and that's the idea that, wait a second, doesn't the
Speaker 1: United States do stuff like this as well?
Speaker 4: I'm going to say no, yes, and no.
Speaker 3: Okay, So there's an understanding that in the world today
Speaker 3: and then world forever, espionage is a reality, and that's
Speaker 3: generally governments seeking information of strategic value about the plans
Speaker 3: and intentions of adversaries and competitors around the world. That
Speaker 3: has generally been within the realm of allowable activity, if
Speaker 3: you will.
Speaker 4: So if I.
Speaker 3: Wanted to understand what a hostile government plans do to
Speaker 3: harm the United States, and I had the hacking capability
Speaker 3: to do that, that would generally be, let's say, within
Speaker 3: the boundaries. What's different is that the PRC has a
Speaker 3: different approach they do, as you know, hack US companies
Speaker 3: on a very large scale. It's the greatest illegal transfer
Speaker 3: of wealth and human history has been through IP theft
Speaker 3: by the People's Republic of China from the United States
Speaker 3: and companies here.
Speaker 4: That's not something that the US does.
Speaker 3: And when we look at what's happening with this particular
Speaker 3: breach where you have government sponsored activity that has now
Speaker 3: in the last six days flipped to be ransomware, that's
Speaker 3: a whole other area.
Speaker 4: That's definitely something that the US government has not would
Speaker 4: not do.
Speaker 2: So I'm going to go back to the second part
Speaker 2: of my question. Then you know, we have once again
Speaker 2: and video is going to be selling chips right into China.
Speaker 2: So I'm just wondering what, you know, the thinking is,
Speaker 2: if they're going to build it, build it on US technology, right,
Speaker 2: like the tech war is on. But what's what's your
Speaker 2: observation on this?
Speaker 3: So this is a really interesting one, and I'll try
Speaker 3: to be very quick about it because it could be
Speaker 3: deep and weedy here. But in essence, what we're seeing
Speaker 3: is the emergence of two parallel digital ecosystems around the world.
Speaker 3: One that's US innovation and our partners and allies around
Speaker 3: the world, and it's rooted in concepts around democracy. So privacy,
Speaker 3: we try privacy, data, sovereignty, security, independence, our sovereignty, you
Speaker 3: name it. Another model, more digital authoritarian, is really modeled
Speaker 3: around monitoring, controlling societies, and maintaining state power. And that
Speaker 3: model is disseminating around the world through the infrastructure that
Speaker 3: the People's Republic of China is selling largely in the
Speaker 3: Global South, but not exclusively there. And so it's a
Speaker 3: long way of saying that I really appreciated the CEO
Speaker 3: of Nvidia's comments yesterday about how he wanted America to
Speaker 3: maintain that lead and be the stand because this issue
Speaker 3: of digital standards is really a battlefield for the future
Speaker 3: of technological leadership and technological leadership in this way, in
Speaker 3: my opinion, is really about global leadership, about superpower status,
Speaker 3: and we're going to have to lead in digital technology
Speaker 3: if we want to maintain that global lead more broadly.
Speaker 3: And so I can see the logic. I'm not saying
Speaker 3: good or bad, but I can see the logic behind
Speaker 3: promoting American innovation and standards so that we can weaken
Speaker 3: the emergence of that, say parallel digital ecosystem could compete
Speaker 3: with us.
Speaker 1: Jennifer Winy have ten seconds left? Can you just give
Speaker 1: us one tip to stay safe in an environment such
Speaker 1: as this.
Speaker 3: Oh yeah, apply all your patches, immediately, rotate your encryption
Speaker 3: keys if you're affected, and hunt for anything that might
Speaker 3: be on your systems and unplug your system if you
Speaker 3: think you might be affected while you're taking these measures.
Speaker 1: Okay, I said one thing that's for, But it's okay.
Speaker 1: We're going to let you encryption keys. I'm going to
Speaker 1: google this stuff. Oh thank god encrypted setting.
Speaker 2: Jennifer, come back real soon. This was fabulous. Jennifer you Bank,
Speaker 2: founder of and Aman Strategic Advisors, joining us right here
Speaker 2: on Bloomberg Business Week Daily