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Apple defended its new system to scan iCloud for illegal child sexual abuse materials (CSAM) on Monday during an ongoing controversy over whether the system reduces Apple user privacy and could be used by governments to surveil citizens.

Last week, Apple announced it has started testing a system that uses sophisticated cryptography to identify when users upload collections of known child pornography to its cloud storage service. It says it can do this without learning about the contents of a user’s photos stored on its servers.

Apple reiterated on Monday that its system is more private than those used by companies like Google and Microsoft because its system uses both its servers and software running on iPhones.

Privacy advocates and technology commentators are worried Apple’s new system, which includes software that will be installed on people’s iPhones through an iOS update, could be expanded in some countries through new laws to check for other types of images, like photos with political content, instead of just child pornography.

Apple said in a document posted to its website on Sunday governments cannot force it to add non-CSAM images to a hash list, or the file of numbers that correspond to known child abuse images Apple will distribute to iPhones to enable the system.

“Apple will refuse any such demands. Apple’s CSAM detection capability is built solely to detect known CSAM images stored in iCloud Photos that have been identified by experts at NCMEC and other child safety groups,” Apple said in the document. “We have faced demands to build and deploy government-mandated changes that degrade the privacy of users before, and have steadfastly refused those demands. We will continue to refuse them in the future.”

It continued: “Let us be clear, this technology is limited to detecting CSAM stored in iCloud and we will not accede to any government’s request to expand it.”

Some cryptographers are worried about what could happen if a country like China were to pass a law saying the system has to also include politically sensitive images. Apple CEO Tim Cook has previously said that the company follows laws in every country where it conducts business.

Companies in the U.S. are required to report CSAM to the National Center for Missing & Exploited Children and face fines up to $300,000 when they discover illegal images and don’t report them.

A reputation for privacy

Apple’s reputation for defending privacy has been cultivated for years through its actions and marketing. In 2016, Apple faced off against the FBI in court to protect the integrity of its on-device encryption systems in the investigation of a mass shooter.

But Apple has also faced significant pressure from law enforcement officials about the possibility of criminals “going dark,” or using privacy tools and encryption to prevent messages or other information from being within the reach of law enforcement.

The controversy over Apple’s new system, and whether it’s surveilling users, threatens Apple’s public reputation for building secure and private devices, which the company has used to break into new markets in personal finance and healthcare.

Critics are concerned the system will partially operate on an iPhone, instead of only scanning photos that have been uploaded to the company’s servers. Apple’s competitors typically only scan photos stored on their servers.

“It’s truly disappointing that Apple got so hung up on its particular vision of privacy that it ended up betraying the fulcrum of user control: being able to trust that your device is truly yours,” technology commentator Ben Thompson wrote in a newsletter on Monday.

Apple continues to defend its systems as a genuine improvement that protects children and will reduce the amount of CSAM being created while still protecting iPhone user privacy.

Apple said its system is significantly stronger and more private than previous systems by every privacy metric the company tracks and that it went out of its way to build a better system to detect these illegal images.

Unlike current systems, which run in the cloud and can’t be inspected by security researchers, Apple’s system can be inspected through its distribution in iOS, an Apple representative said. By moving some processing onto the user’s device, the company can derive stronger privacy properties, such as the ability to find CSAM matches without running software on Apple servers that check every single photo.

Apple said on Monday its system doesn’t scan private photo libraries that haven’t been uploaded to iCloud.

Apple also confirmed it will process photos that have already been uploaded to iCloud. The changes will roll out through an iPhone update later this year, after which users will be alerted that Apple is beginning to check photos stores on iCloud against a list of fingerprints that correspond to known CSAM, Apple said.

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Amit Yoran, chair and CEO of cybersecurity firm Tenable, dies unexpectedly after cancer battle

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Amit Yoran, chair and CEO of cybersecurity firm Tenable, dies unexpectedly after cancer battle

Amit Yoran, CEO and chairman of Tenable

H/O Tenable

Amit Yoran, who ushered cybersecurity company Tenable into the public market as chief executive, died on Friday. He was 54.

Yoran’s passing was confirmed by Tenable in a Saturday press release. While the company said his death was unexpected, Yoran went on medical leave early last month as he battled cancer.

Funeral details have not yet been announced, the company said on Saturday.

Yoran took the helm of Tenable in 2016, his latest leadership role in the cybersecurity field. He previously served as president of RSA Security from 2014 to 2016. Yoran founded and led NetWitness as CEO between 2006 and 2011 before it was acquired by RSA, according to his LinkedIn page.

His decadeslong career in cybersecurity also included government and nonprofit work. Yoran was National Cybersecurity Director for the U.S. Department of Homeland Security from 2003 to 2004. He sat on the board of the Center for Internet Security since 2019.

Two years into Yoran’s tenure, Tenable went public on the Nasdaq. At the time, the IPO was seen as a success story for cybersecurity companies on Wall Street.

Yoran called the company’s focus on the vulnerabilities of businesses’ technology as unique in the market, while also noting its successful shift to a subscription model. By 2018, Yoran said, more than half of Fortune 500 companies were Tenable customers.

“We’ve become one of the most trusted and beloved brands in cybersecurity,” he told CNBC at the time of Tenable’s IPO. “Only the best and highest-performing private companies have the opportunity to go public. And that gives us a spot on a much larger stage to be able to tell our story.”

Tenable CFO Steve Vintz and Chief Operating Officer Mark Thurmond have acted as co-CEOs since Yoran went on medical leave in December. They will continue sharing the role while its board of directors looks for a permanent successor, the company said.

Yoran had expected his leave to last only a few months and said his condition was a “treatable situation,” according to a note to employees published on his LinkedIn page. He had “complete trust” in Vintz and Thurmond to lead the company in his absence.

“We have much to do and there is no time to waste,” Yoran wrote. “As I take a brief pause to prioritize my health, I will stay as connected as I can while giving myself the space to heal fully. I am deeply grateful for each of you, not only for the dedication you bring to your work but for the sense of community we’ve built together.”

Yoran was also the chair of Tenable’s board, a position that now will be held by Art Coviello, the company’s lead independent director. In a statement, Coviello called Yoran an “extraordinary” leader, colleague and friend.

“His passion for cybersecurity, his strategic vision, and his ability to inspire those around him have shaped Tenable’s culture and mission,” Coviello said. “His legacy will continue to guide us as we move forward.”

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Microsoft expects to spend $80 billion on AI-enabled data centers in fiscal 2025

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Microsoft expects to spend  billion on AI-enabled data centers in fiscal 2025

Vice Chair and President at Microsoft, Brad Smith, participates in the first day of Web Summit in Lisbon, Portugal, on November 12, 2024. The largest technology conference in the world this year has 71,528 attendees from 153 countries and 3,050 companies, with AI emerging as the most represented industry. (Photo by Rita Franca/NurPhoto via Getty Images)

Nurphoto | Nurphoto | Getty Images

Microsoft plans to spend $80 billion in fiscal 2025 on the construction of data centers that can handle artificial intelligence workloads, the company said in a Friday blog post

Over half of the expected AI infrastructure spending will take place in the U.S., Microsoft Vice Chair and President Brad Smith wrote. Microsoft’s 2025 fiscal year ends in June. 

“Today, the United States leads the global AI race thanks to the investment of private capital and innovations by American companies of all sizes, from dynamic start-ups to well-established enterprises,” Smith said. “At Microsoft, we’ve seen this firsthand through our partnership with OpenAI, from rising firms such as Anthropic and xAI, and our own AI-enabled software platforms and applications.”

Several top-tier technology companies are rushing to spend billions on Nvidia graphics processing units for training and running AI models. The fast spread of OpenAI’s ChatGPT assistant, which launched in late 2022, kicked off the AI race for companies to deliver their own generative AI capabilities. Having invested more than $13 billion in OpenAI, Microsoft provides cloud infrastructure to the startup and has incorporated its models into Windows, Teams and other products.

Microsoft reported $20 billion in capital expenditures and assets acquired under finance leases worldwide, with $14.9 billion spent on property and equipment, in the first quarter of fiscal 2025. Capital expenditures will increase sequentially in the fiscal second quarter, Microsoft Chief Financial Officer Amy Hood said in October.

The company’s revenue from Azure and other cloud services grew 33% year over year, with 12 percentage points of that growth stemming from AI services.

Smith called on President-elect Donald Trump‘s incoming administration to protect the country’s leadership in AI through education and the promotion of U.S. AI technologies abroad.

“China is starting to offer developing countries subsidized access to scarce chips, and it’s promising to build local AI data centers,” Smith wrote. “The Chinese wisely recognize that if a country standardizes on China’s AI platform, it likely will continue to rely on that platform in the future.”

He added, “The best response for the United States is not to complain about the competition but to ensure we win the race ahead. This will require that we move quickly and effectively to promote American AI as a superior alternative.”

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Microsoft plans to spend $80 billion to build out AI this year

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Foreign phone sales plunge 47% in China spelling trouble for Apple

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Foreign phone sales plunge 47% in China spelling trouble for Apple

An Apple flagship store in Shanghai, China, October 15, 2024.

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Sales of foreign phone brands in China plunged in November, according to official data released Friday, underscoring further pressure on Apple, the biggest international handset vendor in the country.

In November, foreign mobile phone shipments in China stood at 3.04 million units, according to CNBC calculations based on data from the China Academy of Information and Communications Technology, or CAICT.

That’s a fall of 47.4% from November 2023, and a 51% drop from October last year.

CAICT does not break down figures for individual brands, however Apple accounts for the majority of foreign mobile phone shipments in China with competitors like Samsung forming only a tiny part of the market.

The figures highlight the mounting pressure Apple is under in the world’s largest smartphone market as it battles rising competition from domestic brands.

Huawei, for instance — whose handset business was crippled by U.S. sanctions — saw a resurgence in the back end of 2023 and has aggressively launched high-end smartphones in China that have proved popular with local buyers.

Huawei’s growth far outstripped Apple in the third quarter of last year, according to the latest data from research firm IDC.

Apple is hoping its iPhone 16 series, which was released in September, will help the company regain momentum in China, with the Cupertino, California, tech giant promising a host of new artificial intelligence features via its Apple Intelligence software.

However, Apple Intelligence is not yet available in China due to complex regulations around AI in the country.

In the meantime, some of Apple’s domestic rivals have been touting their own AI features that are available on devices now.

In a show of how critical China is for the iPhone giant, Apple CEO Tim Cook visited the country multiple times last year in an effort to shore up partnerships for Apple Intelligence with local Chinese firms.

In a bid to spur interest in the iPhone 16, Apple will begin discounts for the device on Saturday as part of a Lunar New Year holiday promotion.

Apple did not immediately respond to a request for comment.

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