The theme of this session was “digital warfare – defending cyber and space.”


Although the word “warfare” sits uncomfortably at a business conference, I want to commend the Milken Institute for the necessary frankness of our theme for today’s session.


We live in an age of unpeace. Whether it is the constant aggression of nation states like Russia and Iran towards the West and our allies, or China’s stated intent to become the AI superpower by 2030 built on what General Keith Alexander describes as the “largest scale theft of IP in history”, we are living with the reality of a digital world at war.


Our theme today is also accurate in its second part- linking the defence of the two crucial domains, space and cyber, together.


I am delighted to see so many members of the US Airforce (USAF) in the audience today. The USAF is the custodian of GPS, which is one of the most critical networks of our global economy, which touches every aspect of our lives, including cyber.


The US Government made GPS available to everyone in 2000 as one of the great global commons- like the internet. GPS was the first step to link the promise of the space economy with the innovation of the terrestrial digital economy. By doing so America has in a characteristically altruistic way enabled significant innovation and economic growth worldwide for everyone.


Today, however, increasingly GPS- like the internet- is being blocked or spoofed by strategic adversaries. We witnessed this vividly during NATO’s recent exercises in Scandinavia when Russian electronic warfare is reported to have disrupted GPS in Finland and Norway. As Nick Shave shared with us today the costs of a GPS outage is calculated at USD 1.5 billion per day to the UK economy exceeding all the damage to date from cyber attacks.


It is therefore no surprise that In the doctrine of the Chinese People’s Liberation Army (PLA) cyber is regarded as a dimension of space warfare. China sees space as the strategic high ground for cyber warfare.


Winston Churchill reminded us of another important domain when he said that the empires of the future will be empires of the mind.


In the Chinese PLA’s doctrine space is the strategic high ground for cyber, but cyber in turn is the strategic high ground for psychological warfare. The PLA uses cyber for psychological warfare externally to disrupt its adversaries and internally to suppress dissent and to establish social control. These are the new empires of the mind that are being built in an era of great power rivalry.


We often hear comparisons of the innovation economy in the US and the UK with that of China, but it is important to grasp that the Chinese model is a radically different proposition to ours. The application of cyber and AI for internal controls means that China and its close allies are building technology based authoritarianism. This is in sharp contrast to our open systems and the underlying altruism of our innovation economy that enables our freedom of choice, even if the luxury of having so many choices and so much convenience can at times be overwhelming to us.


The ultimate prize in this tournament of shadows is speed. Whoever masters speed will steal a march. And speed is a consequence of cloud based big data that enables machine learning, AI, and ultimately, cognitive systems. Cloud has enabled us to aggregate more data in the last few years than in the preceding 2000 years. This in turn enables us to learn from patterns in data on an unprecedented way. This enables us to bring the transformative power of different forms of AI to bear on real world problems.


As Alex Younger, the Chief of MI-6, said in his recent remarks this is a contest for the future of knowledge itself. In the last 5 years China has invested in more than 60 percent of all AI deals worldwide using its Communist Party controlled platform companies like Baidu, Alibaba and Tencent (BAT). Russia, lacking similar platforms, will be loser in this new global AI arms race. Russia as a lone wolf, because of its cyber aggression, is destined to become a price taker of Chinese AI technologies.


How do we then defend space and cyber? As Jamil Jaffer of IronNet shared there is only one effective defense model in the 21st in the Century- collective defense. Jamil explained how this can be applied to create a network of networks defence for enterprises and governments based on machine leaning.


Collective defense also means creating new partnerships and alliances. Governments on their own can no longer drive innovation. In this venture capital has a crucial role to play in the private sector working with Enterprises and Governments.


In the West we invested about 4 billion USD in cybersecurity venture capital deals in 2017 and about the same amount in AI venture capital deals. Seventy percent of these VC dollars are invested in the US with the UK following as the next centre of excellence.


This is however not nearly enough. We need to continue to scale the VC dollars that builds innovation in these spaces with new partnerships. Venture capital co-investment is one way to do so whether with Government, for example the UK’s new national security innovation fund, partnering with corporate venture capital or with university endowments.


Collective defense also requires that there must be a point where we draw a line under commercial competition in the national interest and in the interest of the defence of the realm. This is a critical responsibility for us as business leaders. We cannot allow the ruthless pursuit of profit to sabotage critically needed national security innovation to protect our populations and warfighters.


This responsibility is as important as our responsibility as business leaders to state consistently and clearly that we have countries and freedoms worth defending. If we do not shoulder these responsibilities with a sense of urgency, we will have succumbed to our adversaries’ psychological warfare. We will have surrendered our precious freedoms for generations to come.


Finally, we need leadership to build new partnerships and alliances around how we train and find talent, continuously enable a culture of innovation and create the right regulatory frameworks to protect our innovation gains.


As you can see much needs to be done to defend space and cyber. But as General Keith Alexander, the CEO of IronNet, reminds us this fight can be won through collective security. We now have to grab the day.