00:00Is he correct there, David, that this machinery does not pose a national security risk?
00:05Unfortunately, there are major concerns across the U.S. government, across the U.S. intelligence community and law enforcement, from the Congress, from the Senate Intelligence Committee, that actually this equipment poses certain major national security vulnerabilities, both with respect to hostile intelligence collection and with respect to the ability of
00:29China potentially to use these machines to sabotage the U.S. power grid.
00:34And these concerns are long lasting. They date back some years. And it's really a major national security issue.
00:40Well, it seems like these machines are now ubiquitous. I mean, there are thousands of them in data centers across America.
00:46And to that point, David, how does the U.S. address this? What would you suggest?
00:51No, that's a major challenge. You know, the incumbency and the market share of these Chinese providers is a major issue.
01:00And that's one that policymakers will have to address. But it's not a justification for allowing the continued growth of such a national security vulnerability.
01:11I think really what it more reflects is that this is a relatively new problem. It's a relatively novel area of our economy.
01:19It's only a few years old. It hasn't really been on policymakers' radars, either in the executive branch or in the Congress for a long time.
01:28But it is now. It has been on the focus of some in law enforcement and in national security circles for some time.
01:35And the greater public and official awareness of this is very important to beginning to think through the measures that can be taken to mitigate these risks
01:45and to remove what the Senate Intelligence Committee called was an egregious national security threat posed by these kind of machines
01:52whose hardware really can't be secured from potential hostile use.
01:57When you were part of the National Security Council, what were the proposals that the National Security Council discussed regarding Bitmain?
02:05Well, earlier this year, the conversations were not quite so mature as to be discussing specific proposals.
02:15It was still more like information-gathering stage for the new administration and an understanding of where the previous administration
02:23and where law enforcement officials had been in looking at this issue over previous months and years.
02:29But there are a range of authorities that are held by the Treasury Department in some cases, by the Commerce Department in other cases,
02:36that can restrict on national security grounds the ability of untrustworthy hardware like this to operate either in the U.S. market broadly
02:47or at least in the U.S. market in places that are proximate to sensitive U.S. government or military facilities,
02:54the kind of combination that could allow these crypto mining data centers to potentially attack the power grid next to sensitive U.S. military facilities,
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