LONDON — The U.S. and U.K. on Monday accused hackers linked to the Chinese state of being behind “malicious” cyber campaigns targeting political figures, in moves expected to stoke tensions with Beijing.
The British government also alleged that China-affiliated hackers were behind an attack that saw the data of millions of voters accessed.
“I can confirm today that Chinese state-affiliated actors were responsible for two malicious cyber campaigns targeting our democratic institutions and parliamentarians,” British Deputy Prime Minister Oliver Dowden said in a speech to Parliament on Monday.
Dowden attributed a hack on the Electoral Commission, the independent agency tasked with setting standards for how U.K. elections should be run, to a China state-affiliated actor. The campaigns were said to have taken place between 2021 and 2022.
The attack was identified by the Electoral Commission in October 2022, but wasn’t disclosed until last year. Hackers accessed the names and addresses of anyone in Britain registered to vote between 2014 and 2022, the Electoral Commission said in a 2023 public notice.
A spokesperson for the Chinese Embassy in the U.K. said allegations of China being behind cyberattacks in the U.K. were “completely fabricated and malicious slanders.”
“We strongly oppose such accusations,” the Chinese Embassy spokesperson told reporters at a press briefing Monday, according to an update that was posted on its website. “China has always firmly fought all forms of cyber attacks according to law.”
‘A clear pattern’
Dowden said the U.K. believes China to be behind attempted reconnaissance on the email accounts of U.K. lawmakers in the summer of 2021. He accused the Chinese hacking group APT31 of being behind this attack.
Cybersecurity firm Mandiant, which is owned by Google, describes APT31 as a “China-nexus cyber espionage actor focused on obtaining information that can provide the Chinese government and state-owned enterprises with political, economic, and military advantages.”
Dowden added that attempts to compromise the email accounts of U.K. lawmakers were however “unsuccessful.”
“We want now to be as open as possible with the House and the British public,” Dowden said. “This is the latest in a clear pattern of hostile activity originating in China.”
Dowden said the U.K. had sanctioned two individuals residing within China, as well as an entity affiliated with APT31.
U.S. hits out at China
Separately, the U.S. Justice Department unsealed an indictment Monday accusing Chinese state-linked hackers of being behind cyber campaigns targeting U.S. businesses, government officials and politicians.
The DOJ charged seven Chinese nationals, Ni Gaobin; Weng Ming; Cheng Feng; Peng Yaowen; Sun Xiaohui; Xiong Wang; and Zhao Guangzong, with conspiracy to commit computer intrusions and conspiracy to commit wire fraud for involvement in a China-based hacking group that spent 14 years targeting U.S. and foreign critics, businesses and political officials.
These individuals operated as part of the APT31 hacking group, the DOJ said.
“The Justice Department will not tolerate efforts by the Chinese government to intimidate Americans who serve the public, silence the dissidents who are protected by American laws, or steal from American businesses,” Attorney General Merrick B. Garland said in a statement Monday.
“This case serves as a reminder of the ends to which the Chinese government is willing to go to target and intimidate its critics, including launching malicious cyber operations aimed at threatening the national security of the United States and our allies,” Garland added.
Geopolitical tensions
The announcements from the U.K. and U.S. are likely to draw the ire of Beijing.
Relations between the U.K. and China have soured over the years, particularly on the tech front, following actions from the British government designed to stem national security risks from Chinese technology companies.
“The impact of such a breach on UK-Sino relations could be profound,” Javvad Malik, lead security awareness advocate at cybersecurity firm KnowBe4, told CNBC on Monday via email.
“It’s likely to escalate tensions, leading to diplomatic strain and potentially resulting in retaliatory actions in the cyber domain or other areas of bilateral cooperation.”
Malik added that the situation “necessitates a robust response not only in terms of securing compromised systems and preventing further breaches but also in reinforcing the international legal and norms-based systems governing state behavior in cyberspace.”
“To mitigate the aftermath and prevent future incidents, it’s crucial for nations to invest in stronger cybersecurity defenses, international collaboration, and developing capabilities to deter adversaries in the cyberspace domain,” he said.
Some hawkish lawmakers have been pressuring the U.K. government to take tougher action on China.
The Inter-Parliamentary Alliance on China, a cross-border group of lawmakers seeking to reform policy on China, said Monday in a post on social media platform X that they, along with other members of Parliament, activists and dissidents, have been “subjected to harassment, impersonation, and attempted hacking from China for some time.”
“We take this opportunity to highlight that, though extremely unwelcome, our discomfort pales in comparison to Chinese dissidents who risk their lives to oppose the Chinese Communist Party. It is high time that they received greater support for their host governments,” the group said.
In 2020, for example, the U.K. government banned telecommunications equipment from Huawei in its 5G mobile network, citing spying concerns. Huawei, for its part, denies the allegations and says it wouldn’t cooperate with China to spy on Western communications.
Relations between the U.S. and China have also been under significant pressure. U.S. lawmakers recently approved a controversial bill that could lead to TikTok being blocked in the U.S. if it doesn’t break with its Chinese parent ByteDance.
If the bill becomes law, TikTok would have a little less than six months to divest from ByteDance, or be banned from apps and webhosting sites in the U.S.
Microsoft owns lots of Nvidia graphics processing units, but it isn’t using them to develop state-of-the-art artificial intelligence models.
There are good reasons for that position, Mustafa Suleyman, the company’s CEO of AI, told CNBC’s Steve Kovach in an interview on Friday. Waiting to build models that are “three or six months behind” offers several advantages, including lower costs and the ability to concentrate on specific use cases, Suleyman said.
It’s “cheaper to give a specific answer once you’ve waited for the first three or six months for the frontier to go first. We call that off-frontier,” he said. “That’s actually our strategy, is to really play a very tight second, given the capital-intensiveness of these models.”
Suleyman made a name for himself as a co-founder of DeepMind, the AI lab that Google bought in 2014, reportedly for $400 million to $650 million. Suleyman arrived at Microsoft last year alongside other employees of the startup Inflection, where he had been CEO.
More than ever, Microsoft counts on relationships with other companies to grow.
It gets AI models from San Francisco startup OpenAI and supplemental computing power from newly public CoreWeave in New Jersey. Microsoft has repeatedly enriched Bing, Windows and other products with OpenAI’s latest systems for writing human-like language and generating images.
Microsoft’s Copilot will gain “memory” to retain key facts about people who repeatedly use the assistant, Suleyman said Friday at an event in Microsoft’s Redmond, Washington, headquarters to commemorate the company’s 50th birthday. That feature came first to OpenAI’s ChatGPT, which has 500 million weekly users.
Through ChatGPT, people can access top-flight large language models such as the o1 reasoning model that takes time before spitting out an answer. OpenAI introduced that capability in September — only weeks later did Microsoft bring a similar capability called Think Deeper to Copilot.
Microsoft occasionally releases open-source small-language models that can run on PCs. They don’t require powerful server GPUs, making them different from OpenAI’s o1.
OpenAI and Microsoft have held a tight relationship shortly after the startup launched its ChatGPT chatbot in late 2022, effectively kicking off the generative AI race. In total, Microsoft has invested $13.75 billion in the startup, but more recently, fissures in the relationship between the two companies have begun to show.
Microsoft added OpenAI to its list of competitors in July 2024, and OpenAI in January announced that it was working with rival cloud provider Oracle on the $500 billion Stargate project. That came after years of OpenAI exclusively relying on Microsoft’s Azure cloud. Despite OpenAI partnering with Oracle, Microsoft in a blog post announced that the startup had “recently made a new, large Azure commitment.”
“Look, it’s absolutely mission-critical that long-term, we are able to do AI self-sufficiently at Microsoft,” Suleyman said. “At the same time, I think about these things over five and 10 year periods. You know, until 2030 at least, we are deeply partnered with OpenAI, who have [had an] enormously successful relationship for us.
Microsoft is focused on building its own AI internally, but the company is not pushing itself to build the most cutting-edge models, Suleyman said.
“We have an incredibly strong AI team, huge amounts of compute, and it’s very important to us that, you know, maybe we don’t develop the absolute frontier, the best model in the world first,” he said. “That’s very, very expensive to do and unnecessary to cause that duplication.”
President Trump’s new tariffs on goods that the U.S. imports from over 100 countries will have an effect on consumers, former Microsoft CEO Steve Ballmer told CNBC on Friday. Investors will feel the pain, too.
Microsoft’s stock dropped almost 6% in the past two days, as the Nasdaq wrapped up its worst week in five years.
“As a Microsoft shareholder, this kind of thing is not good,” Ballmer said, in an interview with Andrew Ross Sorkin that was tied to Microsoft’s 50th anniversary celebration. “It creates opportunity to be a serious, long-term player.”
Ballmer was sandwiched in between Microsoft co-founder Bill Gates and current CEO Satya Nadella for the interview.
“I took just enough economics in college — that tariffs are actually going to bring some turmoil,” said Ballmer, who was succeeded by Nadella in 2014. Gates, Microsoft’s first CEO, convinced Ballmer to join the company in 1980.
Gates, Ballmer and Nadella attended proceedings at Microsoft’s Redmond, Washington, campus on Friday to celebrate its first half-century.
Between the tariffs and weak quarterly revenue guidance announced in January, Microsoft’s stock is on track for its fifth straight month of declines, which would be the worst stretch since 2009. But the company remains a leader in the PC operating system and productivity software markets, and its partnership with startup OpenAI has led to gains in cloud computing.
“I think that disruption is very hard on people, and so the decision to do something for which disruption was inevitable, that needs a lot of popular support, and nobody could game theorize exactly who is going to do what in response,” Ballmer said, regarding the tariffs. “So, I think citizens really like stability a lot. And I hope people — individuals who will feel this, because people are feeling it, not just the stock market, people are going to feel it.”
Ballmer, who owns the Los Angeles Clippers, is among Microsoft’s biggest fans. He said he’s the company’s largest investor. In 2014, shortly after he bought the basketball team for $2 billion, he held over 333 million shares of the stock, according to a regulatory filing.
“I’m not going to probably have 50 more years on the planet,” he said. “But whatever minutes I have, I’m gonna be a large Microsoft shareholder.” He said there’s a bright future for computing, storage and intelligence. Microsoft launched the first Azure services while Ballmer was CEO.
Earlier this week Bloomberg reported that Microsoft, which pledged to spend $80 billion on AI-enabled data center infrastructure in the current fiscal year, has stopped discussions or pushed back the opening of facilities in the U.S. and abroad.
JPMorgan Chase’s chief economist, Bruce Kasman, said in a Thursday note that the chance of a global recession will be 60% if Trump’s tariffs kick in as described. His previous estimate was 40%.
“Fifty years from now, or 25 years from now, what is the one thing you can be guaranteed of, is the world needs more compute,” Nadella said. “So I want to keep those two thoughts and then take one step at a time, and then whatever are the geopolitical or economic shifts, we’ll adjust to it.”
Gates, who along with co-founder Paul Allen, sought to build a software company rather than sell both software and hardware, said he wasn’t sure what the economic effects of the tariffs will be. Today, most of Microsoft’s revenue comes from software. It also sells Surface PCs and Xbox consoles.
“So far, it’s just on goods, but you know, will it eventually be on services? Who knows?” said Gates, who reportedly donated around $50 million to a nonprofit that supported Democratic nominee Kamala Harris’ losing campaign.
AppLovin CEO Adam Foroughi provided more clarity on the ad-tech company’s late-stage effort to acquire TikTok, calling his offer a “much stronger bid than others” on CNBC’s The Exchange Friday afternoon.
Foroughi said the company is proposing a merger between AppLovin and the entire global business of TikTok, characterizing the deal as a “partnership” where the Chinese could participate in the upside while AppLovin would run the app.
“If you pair our algorithm with the TikTok audience, the expansion on that platform for dollars spent will be through the roof,” Foroughi said.
The news comes as President Trump announced he would extend the deadline a second time for TikTok’s Chinese-owned parent company ByteDance to sell the U.S. subsidiary of TikTok to an American buyer or face an effective ban on U.S. app stores. The new deadline is now in June, which, as Foroughi described, “buys more time to put the pieces together” on AppLovin’s bid.
“The president’s a great dealmaker — we’re proposing, essentially an enhancement to the deal that they’ve been working on, but a bigger version of all the deals contemplated,” he added.
AppLovin faces a crowded field of other interested U.S. backers, including Amazon, Oracle, billionaire Frank McCourt and his Project Liberty consortium, and numerous private equity firms. Some proposals reportedly structure the deal to give a U.S. buyer 50% ownership of the company, rather than a complete acquisition. The Chinese government will still need to approve the deal, and AppLovin’s interest in purchasing TikTok in “all markets outside of China” is “preliminary,” according to an April 3 SEC filing.
Correction: A prior version of this story incorrectly characterized China’s ongoing role in TikTok should AppLovin acquire the app.