🔥 Crowdstrike Outage Triggers the Great Tech Fault Line

Good Morning. 

The flow of restricted semiconductors and other high-priority items to Russia through China and Hong Kong has decreased in early 2024, according to U.S. Commerce Department data.

However, Hong Kong remains a significant hub for sanctions evasion, with customs data showing that Hong Kong-registered firms shipped nearly $2B worth of goods to Russian buyers in late 2023, including high-end chips from companies like Nvidia.

— 🐈‍⬛ Acoustic Kitty

THE BOTTOM LINE UP FRONT

Emergency response teams were disrupted, and airlines halted, as one faulty Crowdstrike update brought the West to a screeching halt, on a Friday of all days to be disrupted.

Reportedly, one single faulty update caused the “greatest IT outage in history.”

As the Western world reeled from this IT update crash, the Far East dodged the majority of the impact.

From this single incident, power dynamics are on display in a glaring illustration of the tech race and the major tech’s blind spot.

With the Crowdstrike crash, the domino effect of disaster upon Big Tech’s magnitude was visible on a global scale across a wide span of industries.

INTERNATIONAL SECURITY & DIPLOMACY

Counterterrorism

• Israel ordered the evacuation of part of a Gaza humanitarian zone, citing plans to target Hamas militants, amid ongoing ceasefire negotiations and worsening humanitarian conditions in the territory.

• Iraq executed 10 men convicted of terrorism-related charges by hanging them in a prison in Nassiriya, according to security sources.

• U.S. and Iraqi officials are meeting at the Pentagon to discuss transitioning from the global coalition against ISIS to a bilateral security partnership.

Military & Defense

• Russia announced that its MiG-29 and MiG-31 fighter jets intercepted two U.S. B-52H bombers nearing Russian airspace, as international focus turns to the frigid expanses of the Barents Sea.

• The Philippines ‘to assert our rights’ over a disputed South China Sea reef after reaching a resupply agreement with China, while rejecting Beijing's claims about prior notification requirements.

• A Ukrainian drone attack reportedly damaged a Russian oil refinery in the Krasnodar region, while Russia claims to have destroyed 75 Ukrainian drones in various border areas overnight.

• Taiwan launched its annual Han Kuang war games, focusing on realistic combat simulations to prepare for potential Chinese attacks, while also conducting civil defense drills across major cities.

• Somali forces claim to have killed dozens of al-Shabab militants in clashes following attacks on military bases in Jubaland state.

Cybersecurity

• A Chinese cybercrime group called Vigorish Viper is using advanced technology to run illegal gambling and trafficking operations across Southeast Asia, exploiting sports sponsorships to avoid detection.

• Indian cryptocurrency exchange WazirX lost $230M in a major security breach, potentially linked to North Korean hackers, prompting the company to pause trading and launch a bug bounty program.

• The White House has issued new cybersecurity mandates for R&D institutions and higher education facilities receiving federal funding, aimed at strengthening national security and countering threats from China.

Counterintelligence & Espionage

• Chinese-born chemist Feng Tao has been cleared of his final conviction related to the U.S.'s now-defunct China Initiative, ending a five-year legal battle that found no evidence of espionage despite initial allegations.

Transnational Organized Crime

• Ugandan security forces blocked the opposition party's headquarters and arrested leaders ahead of planned protests, according to party chief Bobi Wine.

• Mexico City's head of intelligence and police operations, Milton Morales Figueroa, was assassinated in an apparent drug cartel attack while on a family outing, marking a rare high-profile attack on a senior officer from the capital.

• The UAE has sentenced 57 Bangladeshis to long prison terms for protesting against their home government, highlighting the Gulf state's strict laws on public demonstrations.

• A new caravan of hundreds of migrants from various countries has begun a journey on foot from southern Mexico towards the U.S. border, with some hoping to reach it before potential changes in U.S. immigration policies.

SCIENCE & TECHNOLOGY

The Pentagon's 2024 Arctic Strategy emphasizes the importance of space-based capabilities in addressing the region's growing geopolitical and environmental challenges.

The strategy calls for investments in satellites to enhance communications, intelligence gathering, and monitoring activities in the Arctic, which is increasingly seen as an area of strategic power competition.

It highlights concerns about Russia's significant presence and China's expanding influence in the region.

The document also stresses the need for modernizing missile warning systems and improving polar satellite coverage, with the U.S. Space Force playing a crucial role in supporting military operations in the Arctic through its bases in Alaska and Greenland.

In other news…

Ukraine has deployed a network of nearly 10K low-cost acoustic sensors called "Sky Fortress" to detect and target Russian drones, significantly improving their air defense capabilities while conserving expensive missiles for larger threats.

A Barcelona-based startup called Inbrain Neuroelectronics has produced a novel brain implant made of graphene, and will perform its first-in-human test this summer.

Researchers have developed NeuralGCM, a new weather forecasting system that merges AI with traditional physics models, offering more precise and rapid long-term climate and weather predictions than conventional methods.

Tesla plans to deploy humanoid robots for internal use next year before producing them for other companies in 2026, according to CEO Elon Musk's announcement.

Google has abandoned its 4-year plan to eliminate cookies from Chrome after facing opposition from advertisers and regulators, opting instead to give users a choice to enable or disable cookies.

DEALS & FUNDING

Canadian AI startup Cohere has raised $500M in a new funding round, valuing the company at $5.5B.

Focusing on creating LLMs for businesses, Cohere has attracted hundreds of corporate clients and reached $35M in annualized revenue by March 2024.

The company plans to double its workforce this year while expanding internationally.

Investors in this round include PSP Investments, Cisco Systems, Fujitsu, and AMD Ventures, bringing Cohere's total funding to $970M.

In other news…

Iconiq Capital has raised $5.75B for its 7th venture-focused fund, signaling a continued trend of large capital concentrations in major VC firms.

The U.S. Air Force brought in a tough negotiator, Shay Assad, to finalize a deal with Boeing for the new E-7 Wedgetail radar plane after struggling to reach an agreement for over a year.

Mysterious buyers, likely linked to Russia, have been acquiring numerous LNG vessels, particularly older ones, through UAE-based companies, suggesting Moscow is expanding its "dark fleet" to prepare for potential tighter trade restrictions on LNG exports.

BiologIC Technologies has received funding from the UK Space Agency to develop technology for manufacturing medicines in space, which will be tested on the International Space Station.

Linx, an Israeli cybersecurity startup, has emerged from stealth with $33M in funding to address the challenge of identity management using AI and analytics.