How to Prevent War with China with Dmitri Alperovitch and Chris Krebs
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Hi, everyone from New York Magazine and the Vox Media Podcast Network. This is On with Kara Swisher and I'm Kara Swisher. Today, we're going to talk about our ultimate frenemy, China. Earlier this month, President Biden held a trilateral meeting with Japanese Prime Minister Fami Ashida and Philippine President Ferdinand Marcos Jr. to discuss strengthening economic ties and ramping up security in the South China Sea. But the invisible presence in the room was Chinese leader Xi Jinping.

American lawmakers are worried that China is spying on us, manipulating public opinion with TikTok, and also getting ready to invade Taiwan in the not-so-distant future. Earlier this week, they passed a bipartisan foreign aid bill that includes over $8 billion for Taiwan and other allies in the Indo-Pacific and tacked on an amendment that could lead to a ban on TikTok in the U.S. Yes, they did it, kids.

I obviously have a lot of thoughts on the matter, so make sure to listen next Monday when I interview Democratic Senator Maria Cantwell from Washington, whose support was crucial to getting the bill passed. I've also known her a long time when she was a former tech executive up in Seattle. But first, we're bringing you a live conversation taped at American University on April 16th with two people who know a lot about cybersecurity, foreign policy, and U.S.-China relations.

I've also known them a long time, and it was a really bracing conversation. Dmitry Alperovitch is the co-founder and former CTO of CrowdStrike and the executive chairman of Silverado Policy Accelerator, a Washington think tank focused on national security. He's got a new book coming out called World on the Brink, How America Can Beat China in the Race for the 21st Century.

And Chris Krebs is the chief intelligence officer at Sentinel-1 and the former director of CISA, the Cybersecurity and Infrastructure Security Agency. As you may remember, former President Trump infamously fired him via tweet after Krebs refused to back Trump's stolen election theories.

Our expert question this episode comes from former Republican Congressman Mike Gallagher of Wisconsin, who was chairman of the Select Committee on the Strategic Competition between the U.S. and the Chinese Communist Party, at least until he left office on April 19th. I also did a great interview with him recently, which you should go back and listen to. We'll have my conversation with Dimitri and Chris in just a minute.

Hi, Dimitri. Hi, Chris. Thanks for joining me. Thanks for having us. So I'm excited to talk to you both, and you both have a background in cybersecurity. Let's start with Taiwan, which is sort of the red-hot center of things. Dimitri, let's start out with your new book, World on the Brink, How America Can Beat China in the Race for the 21st Century.

In the prologue, you described a scenario in which China invades Taiwan on November 13th, 2028. Thank you for that exact date. And the U.S. has to decide what to do next. I'm going to be honest, you sounded a little apocalyptic, but it's completely something that we can imagine. Explain the scenario you envision and why that date. Well, let me first start with the fact that

In December of 2021, I went public on then Twitter and said that I was convinced that Putin was going to invade Ukraine before the end of that winter. One of the first analysts to predict that. Unfortunately, I was right. The same reasons that convinced me that Putin was going to take Ukraine or attempt to take Ukraine were

are playing out in the pacific you've got an authoritarian dictator that has surrounded himself with yes men that wants to get into the history books as the new mao uh in putin's case as a new peter the great that is making their countries

great again, to borrow another phrase, and they're focused on the strategic implications, the geopolitical implications, the security implications to their country of expanding and taking these buffer states as they see in Ukraine in case of Putin and Taiwan in the case of China. And I'm increasingly worried that we are on the path to a catastrophic war. And I cannot underestimate

how impactful this conflict would be. I mean, when you estimate the level of casualties that we would encounter should we fight in this war, it could exceed the daily casualties we saw in World War II, right? Just unimaginable loss of life, infrastructure destruction, and impact to the economy. Trillions of dollars will be wiped out.

literally within hours of that war. So we have to do everything in our power to make sure that we don't fail like we failed with Ukraine, that we actually deter this conflict. Because even if we win it, it will be a complete disaster for the world. And that was really the goal of this book, is to sound the alarm and, most importantly, to focus on the solutions of how do we actually get this done. Why this date? And I will, you know, one of the things, years ago I was at an Aspen security conference and an admiral there who was in the area in the Pacific Fleet

thought China was the biggest danger we face from a cyber security perspective. Talk about why you picked this. Why November 13th? You're just making it up for a scenario? No, I do think it's likely to the

the window for invasion, I think does open up in 2028. You probably have heard a lot about the CIA director Burns and others in the U S government talking about how she has given the order to his military to get ready by 2027. That doesn't mean that the invasion takes place in 2027. I actually think it's unlikely to take place in 2027 because they're going to be very busy with the new party Congress to reelect, uh,

Xi for what is likely to be his fifth term in office. And just because he's given the order for them to be ready doesn't mean that they actually will get there. As we know, government agencies don't necessarily work on the timeline you want them to. But also, why does he want that to be

the case in 2027 is because he's gonna be in front of party Congress and he wants to be able to tout the achievement that we are now ready to do this at a moment's notice. And I think once he gets past that election, Congress party election obviously, he will start thinking about his legacy

The problem with him is that just like Putin, he's looking at his own mortality. He's going to be 79 in 2032, the end of that term. Unlike our system, they don't tend to elect their leaders into their 80s. And he may not, you know, get another term after that. So that 28 through 32 window is very dangerous. What else is happening in 28? You have a Taiwan election that can give you Kaz's belly, depending on how it goes, in January of that year with inauguration of a president in May. You also have the Olympics.

in Los Angeles that summer, which will be very distracting for the United States. And of course, you have our election, where regardless of... It will be another person will be president. Another person will be president, not Joe Biden or Trump. So you will have a new president coming in and a lame duck presidency, most likely in November of that year that

can be very distracting. And as we know, when lame duck presences occur after elections, people head for the door, right? They start looking for jobs. So the national security establishment just gets completely wiped out from a political appointee perspective. So it'll be really skeleton administration, distracted from the Olympics, a Taiwan situation that could get worse.

that could give him an opportunity to go. It doesn't mean that it will happen in 28, it could happen in 29, 30, 31, but that's when I think the window opens. It will happen, that's your feeling. So Chris, your thoughts on this scenario. Do you agree with Dimitri? Do you think we're on the brink of war with China? And if Xi Jinping does invade Taiwan, what role will cyber play? And I'd love you to give an idea of what they've been doing up until this date, what they've been doing in recent years. There are single most important cyber issues

adversary pacing threat as the Pentagon and others have said for years now, but didn't you leave out the sea state? Like with April, what's going on with the weather around Taiwan that would allow for the amphibious attack? Is that part of the calculus as well?

No, you should read the book, Chris. I know you haven't gotten a copy yet, but I actually think that the weather conditions do not play as big of a role as is often said, because this is not going to be a beach invasion. This is not Saving Private Ryan Chinese edition. I spent a lot of time walking the terrain of Taiwan. There's only a few ways that I think this can be done. And the sea conditions in Taiwan are actually terrible almost all year round. It's basically impassable to anything but large container ships. So it's a very, very tough place to invade. Right.

Well, so, so part of the military doctrine for the Chinese Communist Party is, you know, one way to want to fight, and this is, you know, going back to Sun Tzu and all that, but, you know, actually don't allow your adversary, your enemy to fight.

And part of what they've been doing with cyber for years now is winnowing their way into U.S. critical infrastructure in the region as well as here in the U.S. So what's known as operational preparation of the battlefield, putting themselves into a place where if they have to flip a switch, they can. But the point is when they know they're going to push go, and I'm not

As convinced as Dimitri, I do think that regardless of whether there's been a political decision to invade, they're absolutely working towards the ability to invade. And part of that, again, is to ensure that they're in the right position. So first prong of their cyber attack would be hitting defense industrial base areas.

hitting military installations, communications, logistics, all in the region. And in the region, I would include Honolulu. But Guam, Diego Garcia, Okinawa, all of the US military, as well as other allies that are in the region, take off their ability to project force. The second aspect of this is more consistent with a broader information operations approach.

approach of technical attack plus psychological impacts. And so what they would do is hit US civilian critical infrastructure, water facilities, power, anything that we use on a daily basis, knock it offline so that us, not the military, but the civilian population are distracted, are upset. And once you start getting into three, four, five, six days

of not having power or water, you get pretty upset with your political leaders. I mean, y'all remember the summer of 2021 when Colonial Pipeline went down and in this area, you could not get gas for about a week. Think about that at scale across more sectors of infrastructure.

And so the point there is that while they're taking off our ability to project force, they're also undercutting our political will. And if you think about down the street here on Capitol Hill, what would be going on down there?

it kind of leads you to chaos is the idea it's chaos and are we really going to prosecute the war here and if you combine that with a significant loss of life and a bunch of body bags coming home I think and talk about the psychological warfare which you touched on which has been going on for

Forever. Right. So we talk about cyber all the time and we talk about miss dis propaganda, you know, the different kinds of information warfare. The Chinese have been investing in propaganda and information warfare for years that the Russians have been there really kind of in the 2016 election, developing the playbook on how to interfere politically. But the Chinese have been at it at a much more local level. They've, I mean, I,

I'm joking here a little bit, but it kind of gives you a sense of the level they've been operating historically, but it's almost at the dog catcher level. They're in the communities where they have expats and others that have migrated and they really want to be able to control and influence their diaspora. And so they engage at the local and the community level. Much more recently though, they've been elevating it up into DC and Congress and

Even using some of their influence and leverage back home on deals, business deals, permits, authorities to operate, and getting U.S. and other businesses to come back and lobby U.S.

I won't say directly on their behalf, but indirectly on their behalf. Because if you want that deal, if you want that license, if you want that permit, you need to start thinking about getting some policy change in D.C. And that's just kind of the obvious stuff. Then there's this other kind of Subroza work that's going on where, again, they're copying the Russian playbook of permeating social media

using fake personas, using pink slime websites. They're not very good at it, though. They are missing kind of the connection culturally, but nonetheless, they are trying, they're practicing, they're getting reps on keyboard. The director of national intelligence said in the 2022 midterm election review that the Chinese absolutely attempted to influence politics

in that election. No question. And why wouldn't they, right? Right. So, Dimitri, you write there are five reasons Taiwan matters to Xi Jinping. History, destiny, security, geography, and ego. History and destiny are clear. China believes Taiwan was traded or ceded or separated and belongs to China. They want it back.

Which, by the way, is not true. Okay. All right. They want it back, nonetheless. Ego is also clear. He wants a big win for his legacy. He's clearly gotten radicalized over the years. He was sort of a capitalist and has moved somewhere else in that lexicon. But talk about the security implications and the geography. Tell me about maps. So you have to look at the map of the region. And when you look at it from the perspective of China...

you actually appreciate how insecure they feel because they're basically, as they look out at the world from their shores, they're basically completely surrounded by U.S. military bases and U.S. partners. So all the way from the Korean Peninsula, South Korea, we have almost 30,000 American troops to the Japanese islands where we have American troops, to Taiwan, which the view is an outpost of the United States, to the Philippines where we once again have military bases. That entire first island chained

with the Korean peninsula is basically containing China today. And if you're the Chinese Navy that wants to project power across both the Pacific and ultimately the world, you have to go through these choke points between the Japanese islands and Taiwan or between Taiwan and the Philippines that again, fully controlled by the US Navy. If you wanna be a great power as they do, you can't allow that to happen. And Taiwan is that anchor point that if they take Taiwan, they're gonna be able to push the US

out of the Western Pacific, push us all the way back to potentially Hawaii, it will change the entire dynamic of that region. So it's not only a security issue for them, but it's also a power projection issue where taking Taiwan will allow them to dominate Asia, where you have 50% of the world's GDP, most of the world's supply chains, most of the growth.

And as I argue in the book, Taiwan leads to becoming a hegemon in Asia, and a hegemon in Asia leads to becoming a hegemon in the world. And that's why the United States should care about Taiwan. Yes, chips are important, but frankly, it's insulting to the Taiwanese to reduce them to chips.

And Taiwan has mattered to us long before chips were even a thing. So it's a strategic point of view. Chinese aggression in the South China Sea, it was the main focus of the first U.S.-Japan-Philippines trilateral meeting. Talk about the South China Sea and what the importance of the South China Sea in the

which they call salami tactics. Is that correct? Salami slicing, where they're basically going in and they've been doing this for 20 plus years, um, taking these artificial reefs, these rocks in the South China sea, building up, um, artificial islands out of them that they would first say, uh,

are not militarized and they would put an air base on there, they would put a radar on there, and they've been doing that all across South China Sea where they now are the dominant power there, including in areas that are disputed, like with the Philippines in this place called Second Thomas Shoal, where Taiwan is the future threat, potentially four or five years out. The Second Thomas Shoal incident

Is the current threat because you have the situation where the Philippines had grounded one of the old World War two ships on on the show and they have Philippine Marines there that they try to resupply Regularly sort of to establish their presence and the Chinese are aggressively trying to prevent them They've been shooting water cannons at them injuring some of the people and this is potential for conflict because we have a mutual defense treaty with with the Philippines and

And in fact, the United States has recently reaffirmed that it applies to the ship that's in South China Sea. So we might actually get into a conflict with China even over... Over Seoul. Over Seoul. Very, very dangerous situation. Now, unlikely it would get into a full-scale war like over Taiwan. You would hope that cooler heads would prevail. But it's a very dangerous situation.

So, Chris, Prime Minister Kishida had some pretty strong words aimed at China. Unilateral attempts to change the status quo by force or coercion is absolutely unacceptable wherever it may be. But in general, even as they were talking about building up defenses and alliances, all three reiterated that they want to maintain mutually strategic relationships with China, keep the lines of communication open. Biden has been talking about reducing dependency, of course.

So what is the difference between de-risking and decoupling? And what should the U.S. be doing now? Because we have great reliance, you know, technology, goods. There's a very strong relationship between the countries. I think that one way to look at it is de-risking is one consulting company's term for it, and decoupling is another consulting firm's term for it.

But the way I see it, though, and de-risking is kind of the term that's very in vogue and particularly in Europe, is they look at diversifying supply chains out of China. But de-risking is a, hey, we've got an operation in China. We have to have this widget sourced from there. But can we get alternative solutions?

supply chain. So it's a China plus one model or China plus model. And we're seeing a lot of that. We're seeing a lot of companies that are moving elsewhere in, uh, just today. Uh, Tim Cook was visiting Vietnam, I think, I believe. Yes. Yeah. So you had Vietnam yet, you know, they, they set up a number of factories in India as well. Uh,

Decoupling is extracting out of China entirely. It's a much more aggressive shift. It's nearshoring, reshoring, friendshoring. It's coming back. Mexico has seen a significant boom in

the Monterey area. Although some Chinese companies are also thinking of locating there too. You listen to the same daily podcast from last year that I did. But yeah, a lot of firms, Chinese firms, are coming and setting up in Monterey and it gives them the advantage of having that UMSCA, made in Mexico, duty-free advantage. So they're being very smart about it. They're diversifying elsewhere. You may have also seen Microsoft cutting a deal with G24 in UAE. And part of that deal was

G24 is a Dubai-based AI company that had...

keyword, had relationships with the CCP and other Chinese entities. But as I understand it, part of that deal was G24 would have to sever relationships with the CCP for Microsoft to make their $1.5 billion investment. So you're seeing the China, not just the military risk and the invasion risk, but the financial and the supply chain risk,

factors kind of cascading across the world. And they're kind of finally, it seems, catching on in areas of, well, in the EU that has been very resistant, reluctant to get into the China conversation. And this is something that I saw up close and personal in the last administration when we were

advocating on behalf of alternatives to Huawei for 5G telecommunications providers. And it just...

It's not a particularly compelling case when a U.S. official comes into Europe and says, you can't buy that thing even though it's cheap and available, and they're going to give you 130% financing. But that's been ongoing with Huawei and everything else, the reluctance to do so. They were reluctant to get away from Russia, oil, too, until they weren't, correct? Well, absolutely. And the difference, though, is that the financial interdependencies...

with Russia are significantly smaller. Right, exactly. So when you think about that, the spring of 22, the number of companies that could just turn off an entire geography overnight, and a lot of them did because Jeff Sonnenfeld at Yale had them on a list and they were very responsive to that list.

a lot of companies were able to do that. You're not going to be able to do the same with China overnight. No, no, not at all. Especially, I mean, the two tech companies that are probably most exposed would be Apple and Tesla, right? Correct. And he's got enough problems already. Dimitri, if China invaded Taiwan and the U.S. didn't come to Taiwan's aid, there are two major impacts, a major shift in geopolitical power structures in Asia and beyond and global economic fallout. Of these two,

Which is worse for the US and the world? I guess they're both terrible. They're both terrible, but you could argue that we can get over the global depression that we'll be in, for sure, akin to what we experienced in the 1930s. Eventually, you get back to growth. But losing US preeminence in the world, that's something you can't get back. And the reality is that China is incredibly weak, right?

we talk a lot about their population decline they can go from 1.4 billion people today to about 550 million conservatively estimating by the end of the century that's a collapse of their population right their economic model is stagnating because they've reached the middle income trap just so many problems fundamental problems in their economy but if they take taiwan if they're able to set the rules of the road in asia

And they're gonna be able to do that. I mean, I've had conversations with senior Japanese government officials and others who have told me that if China occupies Taiwan, that is gonna change everything for them. They're gonna have a new sheriff in town that they're gonna have to sing in large parts of their tune in many ways that you see states that are neighboring Russia, they're not part of NATO singing to Russia's tune because they have no choice, right? If you're in Central Asia, the United States is far away. You may not want to do what Putin wants, but you have no other alternatives. And that's what's gonna happen

in Japan and Korea and Philippines, that entire region that is so vital to economic growth and arguably US national security. So it's gonna have huge ramifications. And then the other one, of course, is semiconductors. - I'll get to those in a second. But is there any scenario which we wouldn't come to their aid?

- Oh, I think it's at best a 50/50 decision because I think whoever's president, should this scenario come to pass, it's a very tough call, right? When you start looking at the American lives that would be lost, the economic impact,

it's a hard call. Even though Biden has said on four occasions that he'll come to Taiwan's defense, I think if he were confronted with this, he would struggle. Add into that, though, the kitchen table issues, right? When prices start ticking up at Walmart and all that, I mean, the base is just going to fall apart. It's going to be really hard to support this when things are as expensive as

you know, just the daily goods that you need are doubling, tripling. And a quick story for you. We have a question coming up from Congressman Gallagher. So last year, I did a tabletop exercise for his committee of the China Committee in the House on Wall Street with senior Wall Street executives participating. And we looked at the economic impacts of a confrontation with China. And literally one of the executives stood up in the room, looked

at all the options that were presented in terms of what we could do to China, sort of similar to what we did with Russia with sanctions, export controls, acid seizures, and the like. He said, all of this is like economic nuclear war. We can't do any of that without destroying our entire economy. Right. Well, in foreign direct investment in China is down in part because of the saber rattling. However, investments that preexisted

are staying. And companies are making moves right now on risk management to segment off those operations so they can withstand political and geopolitical turmoil. No one is pulling out. No, no, because it's a huge economy. We'll be back in a minute.

So I want to talk about cyber for a minute. You're both experts in the space, Chris, as the head of the Cybersecurity and Infrastructure Security Administration in the Trump administration. You were tasked with protecting Americans from Chinese hackers, among other threats. We just talked about the general threat they pose to American infrastructure. You already discussed that.

But the U.S. Cyber Safety Review Board recently released a report that eviscerated Microsoft's security culture and said the hack, which netted about 60,000 State Department emails, was preventable. Talk to us about the report and do you agree with it? Does anything surprise you?

So I'm in an interesting spot. I'm kind of the unholy trinity of being a former Microsoft employee, former head of a U.S. government agency that had significant engagement with Microsoft and now work for a competitor, at least in the security segment with Microsoft. So kind of wearing those three different hats. You're the perfect person to answer this. It was a very...

It was almost like, I'm not mad, I'm just disappointed. But then the more I read it and thought about it, I was like, no, I'm actually pretty mad because the national security implications. And look, Microsoft might not need the U.S. government. They have a very diverse global customer base, but the U.S. government has put a lot of eggs in the Microsoft basket. And if you see some of the decisions they've made for features and business, they're

At the expense of security, like making the conscious decision not to rotate keys because it created problems on the business side is a, that we can't have that right now with everything that's going on with the fact that we know Russia, we know China, we know the most sophisticated actors, including cyber criminals are going after Microsoft because of the

Sloppy business. Well, no, they're going after them because that's where everybody's gone. It's the Willie Sutton equivalent. Why do you rob banks? Because that's where the money is. Why do you go after the cloud providers? Because that's where the data is. That's where the access is putting a lot of demand and responsibility on these companies and to see them not follow through in such stark relief. Thanks to the work that Dimitri and the, and the board did it's, it's, it should be concerning to everyone. Yeah.

So you did this work and you spent a lot of years trying to prevent or mitigate cyber attacks from China. But you don't spend as much time detailing these risks in the book. So is there a scenario that China does this without even launching a physical attack? And talk a little bit about this review. Is that something you worry about more?

Yeah, so I do serve on the Cyber Safety Review Board. I was actually the vice chair of this review. I'll let the report speak for itself, but I will say this. The one concerning thing that was not noticed in all of the discussion around the Microsoft issues here is the fact that the actor that did this

from China that penetrated Microsoft and networks and then access to emails of Gina Raimondo, Ambassador Nicholas Burns, who's our ambassador to China, and a number of other national security officials. This actor has been known to us and has been tracked for over two decades. In fact, this is the same actor that hacked Google back in 2010 and what I investigated back then and called Operation Aurora. So this was really deja vu for me personally. And

Is one of the most sophisticated actors threat actors operating out of China So the fact that we've been dealing with with this for 20 years They've been hacking cloud providers and and we're still facing us today is really concerning but to answer your question I've looked very heavily into this and putting myself into China's shoes if I were to try to take Taiwan are there any other options for

beyond invasion? And I'm convinced that the answer is no. Having spent time in Taiwan, you know, people don't appreciate how much that society has changed, particularly in the last 20 years, how proud they are of being Taiwanese, Taiwanese first, not Chinese, how proud they are of their history. It's a little bit like Canada, right? I believe...

firmly that it's not just about the CCP, that if China was the beacon of freedom and democracy in the world, that the Taiwanese would want nothing to do with it. Just like Canada doesn't want to be the 51st state, even though we think it's a great country, right? They've got their own thing going, they're very proud of it, and that's the case with Taiwan as well. - Just for history, Taiwan has developed this independent identity for 75 years, including a multi-party democracy.

You cite a poll from July 2023 that only about 7% of Taiwanese are interested in unification with mainland China now or in the future. So in that, that's your point. There is no constituency that wants to unify. Even if you look at those 7%, it's not clear how many of those people... So you don't have a Crimea gang over there. Yeah. It's not clear how many of those people think that unification means that they will control China versus the other way around, which was the original Chiang Kai-shek's model of we are China, but

we control Beijing, right? So I don't think that

China through propaganda through coercion can force these people there's very proud people to surrender Outside of a military invasion and that's the conclusion by the way that Putin came to with Ukraine He's tried for 20 years to influence that society bribe, but it did not work He's created more opposition over the years and that's why he ultimately invaded and I think she's gonna come to the same conclusion Cyber is just one of the tools to soften it up. It's an influencing factor not a determining factor however, I will note that

everyone's watching. And every government on the face of this earth, every military, every security service is watching this. And it's baking increasingly into military doctrine. So this is something that we're going to have to plan for in just about every geopolitical conflict going forward. That's one of the questions coming. So let's just very quickly go over TikTok. I know it seems silly, but those infiltration fantasies are obviously driving the concerns about TikTok and its proposed ban. Senator Schumer, Chuck Schumer, is working on the House TikTok bill that would force ByteDance to divest.

Biden says he'll sign it. It has a lot of bipartisan support. Even if it passed tomorrow, the divestment period is currently six months. It could be extended a year. With an eye to the November elections, how important is it that Washington get this done? Why don't you start, Demetria, and then I have a question for you, Chris. Yeah, Kara, as we've talked about many times now,

The problem with TikTok is it should be treated as a media company, which is what it is. It's a broadcast network. Yes, it's user-generated content, but they control what you see and crucially what you don't see, right? They are the filter. That's the reason why I think we need to focus on this is that this is an adversary-controlled media company that self-admittedly has access to...

half of the American population. So, Chris, TikTok, it feels like it's taken a lot of air out of the room. Do you think it's smoke and mirrors? Is it important? Are there bigger cybersecurity risks from China? I think it represents a lot of things. So,

I think if you actually go and read the text of the bill, it's a foreign control bill. And it refers back to other statute that identifies China, Russia, North Korea, Iran, and that list can be modified down the road. And if you are controlled by those countries, then you're then subject to the ensuing provisions of the statute. I think the easiest path forward is one around data privacy.

We do not have a privacy law here in the United States, a federal privacy law. Now, one was introduced a week or two ago that has some. Yeah, but look, I mean, half a dozen or more privacy laws have been introduced every Congress for the last 10 Congresses, two decades. So, you know, I don't know if that is going to get across the finish line, but it's the privacy and who has access to our data, our personal information.

That is probably the easiest way to address the overarching concern. The influence, the propaganda, the controlling the actual information we see, that's a much, much different issue. There are going to be First Amendment issues, not just with that approach of the bill, but also if the companies do not go through the divestment procedures, then it is up to the app stores. And that means Apple. It's going to be up to Apple and Google for Google Play. Yeah.

There's going to be litigation there. So I just see this bill, whether it goes through the Senate or it gets tacked on to a foreign aid bill that the House is considering.

I see it just years of litigation. Well, then the question is, what is China going to do? Because they're saying that they will rather shut it down than sell it, which sort of as a business guy, it makes you question, well, if this thing is worth tens of billions of dollars at a minimum, why would you destroy that versus try to make money on it? And the only answer is that because you want to use it as an influence platform. Right. And beyond the fact, by the way, that it doesn't require the...

uninstall, you know, uninstallation of the app from devices. So if you got it, whatever we were, you know, making a ruling on under the law, it stays, you just can't get an update. And then with other platforms, you can sideload. That's right. It's not illegal for people to use it, right? It's only, it's going to be prohibited by, for the app stores to distribute it. I think for advertisers to advertise in TikTok. Which was the original approach, by the way, under the Trump administration, that you could not transact business with the platform.

And so it's a different approach. I think they've tested it, whether it's a bill of attainder, they've looked at First Amendment issues. Chairman Gallagher and his team are pretty confident. We'll see. I'm going to move you from TikTok because everyone loves talking about TikTok. But clearly one of the bigger reasons China wants to control is economics. This is a bigger fish here. Taiwan produces more than 60% of the world's semiconductor chips and 90% of the most advanced ones. They call it Taiwan's silicon shield.

I'd like you each to talk about the importance of the chips in U.S. strategy. We saw how chip production delays impacted whole industries during the pandemic. China also has been pumping money into the chip industry, doing what it always does, engage in price dumping, hoping to gain market share and boost it. And the third thing is in AI, obviously chips are increasingly important. Silicon Valley is spending trillions of dollars building new chip fabs and takes a long time.

Biden administration announced a $5 billion investment in February. It's certainly not enough because Sam Alton was trying to raise $7 trillion to raise the global semiconductor industry. So both of you, how do we become more independent from it? And just give your overall thoughts on the importance of the chip investment.

I know you said it was talked about a lot, but it's very important. It is crucial. I mean, chips are called the new oil. I actually say in the book that's a misguided view because there are alternatives to oil. There are no alternatives to semiconductors, right? Our entire economy, the digital economy, runs on semiconductors. AI, technology.

There would be no AI without advanced chips, right? Nvidia GPUs that are powering chat GPT and all the advances that you're seeing in the last couple of years. So it is absolutely fundamental. One of the things that gets misunderstood about chips is this focus on advanced chips. And yes, they're important for AI and other applications,

But actually, what I call the foundational chips or legacy chips are even more important. When you think about your phone, there are only three advanced chips in that phone. There's a CPU, the processor, memory, and the Qualcomm chip that connects you to the cell tower. And there's about 150 or 160 foundational chips that control the screen, the battery, the GPS, the accelerometer, everything that makes it a phone.

And what's happening right now is we've been able to successfully, the Biden administration implemented these export control policies to prevent China from buying equipment to produce advanced ships. For the most part, it works. They have a few loopholes. They haven't closed down yet. But China is doubling down on foundational, which is a majority of the market. And if they corner that, they'll be able to control

Yeah.

with price dumping through overcapacity, which is a playbook that we've seen in the steel industry, in the solar industry, now playing out in electric vehicles and batteries. It's a playbook that has worked 100% of the time for them historically, and they're trying to do this again. Chris? Look, I think even with foundational chips, we have challenges here. To the point about the Chips and Science Act,

When Speaker Pelosi last term went over to Taiwan, she was having conversations about the CHIPS Act and said, yeah, nice start. You missed a zero or two at the end. We're not putting enough into this. And then when we do and the money starts hitting accounts, it takes much, much longer to break ground because of regulations because we don't have the people. We don't have the technology. Right.

environmental assessments and impact assessments, those things are slowing down a lot of, I think, the progress we want to make here. But we can change all that. But do we have the follow through? So is there any way for the U.S. to build its chip business? It's a decades-long process, correct? Well, we're building it. And TSMC is going to open up actually a factory in Arizona next year. They're getting money from the CHIPS Act. Intel is building a factory in Ohio. But that's really just stemming the flow. If the CHIPS Act works...

In the most optimistic scenario, we will go from about 12% of the world's chips being produced in the US to 20%. We will not reduce meaningfully our reliance on Taiwan. For the foreseeable future, for the foreseeable decades, Taiwan will be the place that manufactures the most amount of chips.

So going back to the idea of de-risking in 2022, the White House and Commerce Department announced export control measures to prevent China from importing advanced chips to be used in AI training. They want to prevent anyone with a green card or American passport from working on Chinese semiconductor industry and advanced chip manufacturing. And the Biden administration seemed intent on continuing the trade war that Trump started with China. There are signs they're going to put up tariffs, block electric cars, cheap energy, and

Talk about that. Each of you talk about that idea of us attempting to put, you know, sand in the gears, essentially. Well, we absolutely can do it. We're doing a little bit of it, not nearly enough. But one of the dirty little secrets about the semiconductor manufacturing industry is that the equipment that you need, the most sophisticated equipment really man has ever built to produce these chips that are, you know, three nanometers in terms of distance between the transistors, it's all produced in three countries.

ASML is the company that a lot of people hear about in Netherlands, but there are also three major companies in the US and a couple in Japan.

Those three countries coming together, all allies, and Japan particularly very concerned about China and Taiwan, can stop the flow of that equipment into China and literally prevent China from building any more fabs than they already have. And in fact, if they stop maintaining the existing equipment, you could even see shutdowns of existing fabs in China. So this is absolutely within our control. We're unwilling to do that.

because of the overall relationship with China. They would obviously view that as very negative, but also because the supply chain for chips is very, very tight. And there would be real economic downturns from shutting down their chip production. Yeah, but also the timeline you just mentioned. I mean, it would take a dozen plus years to get a lot of this stuff off the ground. And you look at the larger multinationals in the US to vertically integrate and make those investments. I mean, it is hundreds of billions, if not as...

Sam Altman put it, trillions of dollars. And it's not a tomorrow thing. It's not a next quarter thing. It is a long-term strategic investment. I think that's where our leadership, regardless of political party, has to figure out which narrow lane do we want to take. And if it's for national security applications...

Get back to a trusted foundries model, which didn't work. But do we want to reinvest? And we actually have to follow through with the right investments, which we have not done to date. Yeah, so essentially we're fucked. Okay, so speaking of which, you did predict Putin would invade Ukraine. Every week we get a question from an outside expert, and this week it's Wisconsin Representative Mike Gallagher, outgoing representative. He's getting out of Dodge. He was the chair of the China Committee. I'm going to read it. Mike asks,

My big question for you, besides who is your favorite member of Congress, is as the Chinese Communist Party looks at Russia's ongoing war in Ukraine, what lessons is it learning in general and in the cyber domain in particular? Each of you answer him very quickly. What are they learning?

You know, that's a really hard question to answer because you could look at this and say they're learning that invading other countries is very difficult. It could go wrong. I had a conversation with a senior Pentagon official at the very beginning of this war, and I asked that very question to them, and they said what they're learning is that America will not fight a nuclear power. Right? So you could learn

both things that maybe this is too tough to to to do but also maybe that the americans will not commit their troops to fight for another country and in fact that what they're seeing right now in u.s congress with ukraine aid getting tied up and by the way taiwan's aid is in that package as well and they may be realizing that america would be an unreliable ally to taiwan which is by the way the propaganda they're pushing in taiwan which is very effective

trying to tell the Taiwanese, America will not come to your aid. You're going to be on your own. The best thing for you is to appease us, is to try to get closer to us. On the cyber front, there's almost an Eastern philosophy approach here that accept your mortality. And once you kind of accept that you're going to get hit,

you make a different set of decisions and it's more about resilience and recovery. And that's one thing that I think throughout this invasion that the Ukrainians have shown is that they know the Russians are coming. They know they're going to get in. They know they're going to unleash some malware and bring some stuff down. So what's their response and recovery strategy and how quickly can they get back up those critical processes? The Ukrainians have been in,

incredibly resilient. Now, they have had U.S. government support, Cyber Command and others. They've also had significant private sector support. So it does show that there's a coalition of the good guys behind this that has to always be ready to go and jump into the trenches when needed.

And Chris and his company were one of those, actually. Okay. So last couple questions. In your book, Dimitri, you laid out your recipe for avoiding a devastating war. You say the U.S. should be closely reevaluating our entanglements in Europe, the Middle East, Latin America, and asking how they impact our ability to contain or deter China, or does it distract us?

J.D. Vance recently penned an op-ed where he pushed a similar line, essentially saying the war in Ukraine is diminishing our ability to contain China. But I'm going to push back. How is it possible to reduce U.S. policy in these conflicts to a China lens?

Yeah, so I'm not an isolationist. I believe that we need to support Ukraine. I don't believe that we need to withdraw from everywhere in the world and only focus on China. But I do believe that China needs to be a top priority. And as we allocate our limited resources, we should be asking what is going to be the impact to deter in this war.

overwhelmingly devastating conflict if it were to occur in the Taiwanese Strait and there are certain things about Ukraine that I think are helpful in creating more deterrence for China. One of the things it has done is woken us up to the inadequacies of our defense industrial base and how we need to increase our production. That's been great. It's also depleted our air defense stocks and this war will be

As much about air defense as it will be about naval power and anti-ship missiles, because China has the world's largest rocket and missile forces. So we need to ramp up massively that production, and we need to be asking hard questions of do we have enough in the region? Do we have enough in Taiwan to make sure that— So it's resource allocation. It is absolutely a resource allocation issue.

And what does that mean for Ukraine? Well, I think there's a lot that we can do for Ukraine. For example, providing them with fighter jets, providing them with artillery, providing them with ground force capabilities, armored vehicles and tanks. That's all fine. We don't need any of that really in Taiwan to the extent that you're likely to have a conflict over Taiwan. But in a few areas, air defense and to ship missiles, we got to be much more thoughtful and ask questions. Do we have enough in our own inventories?

So taking a look more for kind of silver linings here with the potential conflict with China, I'm looking South. I'm looking to, as all these companies de-risk decouple, whatever you want to call it. And they start coming back this way. You look South into Latin America. There's an incredible amount of natural resources, uh,

Land to expand and there's an insane amount of technical talent We each and all one are making a lot of hires in Latin America's the technical talent is so good So why not think more about economic development in Latin America to pull some of those? Dependencies that we have a China out move them south in the same time We can address perhaps some of the pull factors that are driving a lot of the immigration issues So I think there's a much bigger, you know, two to three for one play in

in Latin America that we just need to have a broader conversation about. So solving immigration through decoupling from China. That could be a byproduct at least. All right, last question. Obviously the world is watching what happens in the November election. How and in what way do you think a Trump presidency would impact the relation with China or allies, the Indo-Pacific region? And what are your biggest concerns about the election right now?

Well, this is a question that I get asked often, both in Asia and in Europe, is what is Trump going to do if he gets elected? That's ultimately unknowable. I'm not sure he knows what he would do. He's busy today. But the reality is that... Sleeping in court. You have this... I had to. Come on. The reality is that...

You have actually the Trump administration that needs to get credit for getting China right in terms of the threat and really changing the whole conversation in this town and creating bipartisan consensus that we need to confront China. So that's a positive. The negative, I would say, is his tendency to try to pull out of alliances, NATO and the like. There's questions about whether he even cares about Taiwan or whether he would come to their defense or not.

or not, would he strike trade wars with Japan and other allies that we really need to deter China? So I would say,

It's a big question which way he's gonna lean in. Is he gonna be strong on China but also build alliances or is he going to talk tough on China but also push everyone else away? - What about the Biden, future Biden administration? - Well, Biden in large part has continued the China policies of the Trump administration, but they're also flirting with this, do we engage, do we not engage? Jake Sullivan talks about small yard, high fence.

It's not clear how large that yard really is because if you're going to deter China, you need to do what I call in the book as unidirectional entanglement. You need to not decouple because then you lose all leverage, but you make sure that they're more dependent on us than we are dependent on them.

And that's in areas of chips, in AI, in energy, in critical minerals, the whole slew of things that we're dealing with in this competition. And right now it's really mixed bag and we're not doing enough in a lot of these areas to, yes, disentangle ourself, but also make sure they're more reliant on us. Perfect.

All right. So big picture, 24 election, kind of looking at three main areas of concern. First is going back to 2016. It's the technical attacks on election infrastructure, on systems, on the counting, the certification process. Good news is they're consistent with prior assessments. The national intelligence folks say that they're not aware of any adversary that's got the capability and certainly hasn't demonstrated much of the intent to get in there and change a vote.

disrupt counting or certification. But you're still, I think we're going to see both foreign and what's going to be different this year. I think we're going to see domestic actors trying to poke prod pry kind of consistent with the coffee County, Georgia theft of election systems and software. Those that are just more ideologically trying to make a point, not just,

Not necessarily to, again, change the outcome, but continue to undermine our faith in the public institutions. Second is disinfo. And whatever that term even means these days, you're going to see much more on the influence shaping. And that's going to be to kind of change perceptions, change outcomes and actions.

And that's, again, that's going to be foreign and that's going to be domestic. We're going to see a lot more of these groups that are on the fringe that are trying to, again, undercut our confidence. And this is a continuation of the big lie from 2020. And then third, which is

is somewhat related, but it's physical threats against election workers. And when I talk to the national security folks, when I talk to state and local election official, the number one thing they're worried about are threats to election officials. We're talking about doxing public information out on the internet, swatting, so calling 911 saying, hey, I shot my kids or my wife. You need to come and stop this. And SWAT teams roll up. So the number one risk really, I think, is physical against election

election officials and they are retiring in mass. And there's going to be kind of a knock on effect here of not enough poll workers, not enough election officials. That's going to have impacts on our opportunities to participate in the process, which is the point, which is a bit of the point. So the one thing I'll add here is on AI. I don't see AI being a huge impact on the 24 election. I think it's going to be a lot of noise, a lot more like the robo-calling.

However, when somebody figures out how to take the Cambridge analytic process and then drop AI on top of it where you can do super precise micro-targeting for influence purposes and build that kind of overarching appearance of consensus…

And if you do it for ill, that's, I think, where AI comes to town. And so that's probably a 26 or 28 concern. Oh, good. So we can worry about that later. All right. Dimitri, in your prologue scenario, you say that in November 2028, the president-elect has set up a transition headquarters in Madison, Wisconsin. Care to tell us who in your mind eye that person is? No comment. Who is that? Who knows? Well, you do, apparently. So...

Look, I do think that we're overdue for a candidate from the Midwest. The Midwest. What about you, Chris? What, commenting on his book? No, no, commenting on your candidate for 2020. Which president would you like to see there if this is the conflict coming?

Dwayne Johnson? I don't know. I mean, you know, it's kind of like idiocracy at this point. Right. Get somebody that can actually go up, get up there and knock some heads. Think of someone who could possibly handle it, and you have to answer that, too. You know, Mike's a friend. Mike, in addition to the select committee on CCP, was also the chairman of the... This is Mike Gallagher, the president. The...

the Cyberspace Hilarion Commission in the last administration. So I've worked with Gallagher for a long time. Former Marine II, served in Iraq. Good guy. Sounds like Mike Gallagher. That's who they're talking about. And actually a highly competent person, 100%. Thank you both. I really appreciate it. This has been incredibly hefty.

On with Kara Swisher is produced by Christian Castro Rossell, Kateri Yochum, Megan Burney, and Sheena Ozaki. Special thanks to Andrea Lopez-Grizzato, Kate Gallagher, and Mary Mathis. Our engineers are Fernando Arruda and Rick Kwan, and our theme music is by Trackademics.

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