Written by Suzanne Smalley

A White House-backed investment fund funded in part by tech heavyweights Peter Thiel, Eric Schmidt and Craig Newmark is making a big bet that ‘deep tech’ will give the US the edge over China , particularly in cybersecurity.

The United States needs to do more to win the “great national competition,” according to Gilman Louie, CEO of the fledgling America’s Frontier Fund (AFF), and that means supporting innovation in areas of artificial intelligence, quantum computing, fusion, microelectronics, 6G cell technology. technology, advanced manufacturing and synthetic biology.

Most of these technologies will soon be increasingly integrated into cybersecurity, he said.

“Cyber ​​is going to change dramatically over the next five or six years, moving from the traditional way we think of layered defenses to a much more real-time kind of algorithmic competition,” Louie said. “It’s going to be machine on machine.”

The White House recently appointed Louie, a gaming executive who became the venture capitalist behind In-Q-Tel, the CIA’s investment arm, to President Biden’s Intelligence Advisory Board, giving him a direct line to President.

The White House did not respond to a request for comment regarding its role with the new investment fund. When Biden launched the advisory council, the White House said at the time that it “exists exclusively to assist the president by providing the president with an independent source of advice on how effectively the intelligence community responds to the needs of intelligence of the nation and vigour”. and the insight with which the community plans for the future.

AFF will be a hub for what Louie calls the Quad Investor Network (QIN), a partnership that AFF will lead with other global democracies to jointly invest in emerging technologies. The White House announced the QIN effort in late May, about three weeks after announcing that Louie had been selected alongside three others for the intelligence advisory board.

Cybersecurity has been a White House priority since Biden took office, and the administration has stepped up efforts to work alongside the private sector after SolarWinds and Colonial Pipeline rattled the economy during the president’s first term.

But Louie’s work also builds on efforts begun in the Trump administration. AFF appears to have grown out of work done by the congressional National Security Commission on Artificial Intelligence (NSCAI) led by Schmidt, the former CEO of Google, who is a major donor to the DISP. Louie was one of the few national security and technology leaders who worked under Schmidt to produce the NSCAI findings last year.

James Lewis, who heads the strategic technologies program at the Center for Strategic and International Studies, said a 756-page report from the NSCAI’s work is an influential document in government and has sparked strong interest in the House Blanche to encourage entities such as AFF. The NSCAI report focused heavily on the urgency of U.S. investment not only in artificial intelligence, but also in quantum science, microelectronics, and other problem sets that AFF intends to prioritize.

“The White House is looking for new ways to accelerate innovation in the technology competition and the NSCAI is the seminal report on this topic,” Lewis said. “A lot of this revolves around the conclusion a few years ago that Washington needed to reconnect with Silicon Valley. The things that drive innovation and government policy aren’t the same and so that’s an effort to establish this link.

In addition to donations from former Schmidt co-founder Palantir Thiel and Craigslists founder Newmark, AFF’s high-level connections are evident in its board’s national security and industry credentials. administration, which includes former Undersecretary of Defense for Policy Michele Flournoy; Ashton B. Carter, former Secretary of Defense; former Deputy Director of the National Geospatial Intelligence Agency Joanne Isham; former IBM CEO Sam Palmisano; and HR McMaster, former national security adviser.

Deep Technology Innovation Will Boost Cybersecurity in the Future

Louie said speed in the cyber realm will be critical to national security in the future. This need for speed shapes AFF’s investment decisions and will be reflected, for example, in the fund’s focus on creating diversity in the chip supply chain. It will also be important for U.S. national security to “build algorithms to dynamically adapt,” a growing pressure that Louie says is largely driven by artificial intelligence and the growing role of technology. machine learning in cyber warfare.

As a for-profit investment fund housed within a non-profit organization, AFF will be in a unique position to leverage the assets of a for-profit enterprise while ensuring that the overall organizational mission stays on track and focuses on deep technology, say its founders. Thiel, Schmidt, Newmark and other donors gave money to the nonprofit rather than the fund, AFF leaders said.

Former and current senior Cyber ​​Command and U.S. National Security Agency officials said it is increasingly vital for the private sector to bolster public sector efforts to ensure the United States wins. the cyber arms race. Deep technologies are becoming vital to US national security, Col. Candice Frost, who heads the Joint Intelligence Operations Center at US Cyber ​​Command, said Thursday.

“When it comes to the growth of data, really, those military people who can collect it, analyze it, and deliver it the fastest, they have an advantage,” Frost told NightDragon CEO Dave DeWalt in an interview that aired online. live by the company on Thursday. “AI is transforming warfare in terms of pacing and automation, so we’re continually trying to lean forward, but we’re not the most advanced in the field sometimes compared to your industry [being] so much further into the commercial side than necessarily the Ministry of Defense.

Frost said DOD partnerships with business and technology companies have grown significantly over his career, and those partnerships will “impose a cost” on China, Russia and other adversaries.

Longtime former NSA official Rick Ledgett told CyberScoop that the AFF resolves a critical tension national security officials grapple with — that is, while the private sector is now clearly at ground zero for high-tech research and development, the need for the private sector to focus on profits does not always serve national security well.

“The private sector is [investing] primarily for profit… which may lead you to make a decision in terms of pursuing a technology or bringing it to market that is very lucrative, but not so good for national security,” said Ledgett, who is now general manager of Paladin. Capital Management, a small investment firm focused on cybersecurity.

“Cyber ​​is going to change dramatically over the next five or six years, moving from the traditional way we think of layered defenses to a much more real-time kind of algorithmic competition.”

Gilman Louie, CEO of the American Frontier Fund

Filling a void in the market

To date, investors have largely focused on software while staying away from deep tech, according to AFF co-founder and chairman Jordan Blashek. Deep tech often involves technical risk, hardware development and longer lead times to reach commercial scale, Blashek said, so few existing funds focus on it.

Blashek said that initially AFF plans to look closely at investments in 3D packaging, next-generation materials and smart digital design tools for microelectronics, quantum computing and communications, cryptography post-quantum and the factories of the future. AFF will build and scale deep technology innovation not only by investing directly in companies, but also by attracting investment from broader U.S. capital markets, Blashek said.

“Academia and the US government have incredible resources to support deep technology, but they often struggle to engage with capital markets,” he said by email.

Blashek added that because academia and the federal government don’t operate as fast as the private sector and don’t have the same investment experience, it’s much more difficult for those sectors to help businesses. to achieve commercial scale.

Louie said the AFF is built on the principle that the technology that underpins America’s future national security must be designed with intention. “This is the time when we have to be very serious about how these technologies are built and rebuilt, with a mindset of moving society forward,” Louie said. “Not just thinking technology is neutral – because technology isn’t neutral.”

This mindset is a key reason the fund has a strong focus on diversifying the microelectronics supply chain, Louie said. “The most important measure for us is to look at the diversity of our supply chain … so that the production of these chips cannot be threatened by a foreign country which is 110 miles offshore from another place. where you produce your chips like Taiwan.”

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