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A recent Chinese cyber-espionage attack inside the nation’s major telecom networks that may have reached as high as the communications of President-elect Donald Trump and Vice President-elect J.D. Vance was designated this week by one U.S. senator as “far and away the most serious telecom hack in our history.”

The U.S. has yet to figure out the full scope of what China accomplished, and whether or not its spies are still inside U.S. communication networks.

“The barn door is still wide open, or mostly open,” Senator Mark Warner of Virginia and chairman of the Senate Intelligence Committee told the New York Times on Thursday.

The revelations highlight the rising cyberthreats tied to geopolitics and nation-state actor rivals of the U.S., but inside the federal government, there’s disagreement on how to fight back, with some advocates calling for the creation of an independent federal U.S. Cyber Force. In September, the Department of Defense formally appealed to Congress, urging lawmakers to reject that approach.

Among one of the most prominent voices advocating for the new branch is the Foundation for Defense of Democracies, a national security think tank, but the issue extends far beyond any single group. In June, defense committees in both the House and Senate approved measures calling for independent evaluations of the feasibility to create a separate cyber branch, as part of the annual defense policy deliberations.

Drawing on insights from more than 75 active-duty and retired military officers experienced in cyber operations, the FDD’s 40-page report highlights what it says are chronic structural issues within the U.S. Cyber Command (CYBERCOM), including fragmented recruitment and training practices across the Army, Navy, Air Force, and Marines.

“America’s cyber force generation system is clearly broken,” the FDD wrote, citing comments made in 2023 by then-leader of U.S. Cyber Command, Army General Paul Nakasone, who took over the role in 2018 and described current U.S. military cyber organization as unsustainable: “All options are on the table, except the status quo,” Nakasone had said.

Concern with Congress and a changing White House

The FDD analysis points to “deep concerns” that have existed within Congress for a decade — among members of both parties — about the military being able to staff up to successfully defend cyberspace. Talent shortages, inconsistent training, and misaligned missions, are undermining CYBERCOM’s capacity to respond effectively to complex cyber threats, it says. Creating a dedicated branch, proponents argue, would better position the U.S. in cyberspace. The Pentagon, however, warns that such a move could disrupt coordination, increase fragmentation, and ultimately weaken U.S. cyber readiness.

As the Pentagon doubles down on its resistance to establishment of a separate U.S. Cyber Force, the incoming Trump administration could play a significant role in shaping whether America leans toward a centralized cyber strategy or reinforces the current integrated framework that emphasizes cross-branch coordination.

Known for his assertive national security measures, Trump’s 2018 National Cyber Strategy emphasized embedding cyber capabilities across all elements of national power and focusing on cross-departmental coordination and public-private partnerships rather than creating a standalone cyber entity. At that time, the Trump’s administration emphasized centralizing civilian cybersecurity efforts under the Department of Homeland Security while tasking the Department of Defense with addressing more complex, defense-specific cyber threats. Trump’s pick for Secretary of Homeland Security, South Dakota Governor Kristi Noem, has talked up her, and her state’s, focus on cybersecurity.

Former Trump officials believe that a second Trump administration will take an aggressive stance on national security, fill gaps at the Energy Department, and reduce regulatory burdens on the private sector. They anticipate a stronger focus on offensive cyber operations, tailored threat vulnerability protection, and greater coordination between state and local governments. Changes will be coming at the top of the Cybersecurity and Infrastructure Security Agency, which was created during Trump’s first term and where current director Jen Easterly has announced she will leave once Trump is inaugurated.

Cyber Command 2.0 and the U.S. military

John Cohen, executive director of the Program for Countering Hybrid Threats at the Center for Internet Security, is among those who share the Pentagon’s concerns. “We can no longer afford to operate in stovepipes,” Cohen said, warning that a separate cyber branch could worsen existing silos and further isolate cyber operations from other critical military efforts.

Cohen emphasized that adversaries like China and Russia employ cyber tactics as part of broader, integrated strategies that include economic, physical, and psychological components. To counter such threats, he argued, the U.S. needs a cohesive approach across its military branches. “Confronting that requires our military to adapt to the changing battlespace in a consistent way,” he said.

In 2018, CYBERCOM certified its Cyber Mission Force teams as fully staffed, but concerns have been expressed by the FDD and others that personnel were shifted between teams to meet staffing goals — a move they say masked deeper structural problems. Nakasone has called for a CYBERCOM 2.0, saying in comments early this year “How do we think about training differently? How do we think about personnel differently?” and adding that a major issue has been the approach to military staffing within the command.

Austin Berglas, a former head of the FBI’s cyber program in New York who worked on consolidation efforts inside the Bureau, believes a separate cyber force could enhance U.S. capabilities by centralizing resources and priorities. “When I first took over the [FBI] cyber program … the assets were scattered,” said Berglas, who is now the global head of professional services at supply chain cyber defense company BlueVoyant. Centralization brought focus and efficiency to the FBI’s cyber efforts, he said, and it’s a model he believes would benefit the military’s cyber efforts as well. “Cyber is a different beast,” Berglas said, emphasizing the need for specialized training, advancement, and resource allocation that isn’t diluted by competing military priorities.

Berglas also pointed to the ongoing “cyber arms race” with adversaries like China, Russia, Iran, and North Korea. He warned that without a dedicated force, the U.S. risks falling behind as these nations expand their offensive cyber capabilities and exploit vulnerabilities across critical infrastructure.

Nakasone said in his comments earlier this year that a lot has changed since 2013 when U.S. Cyber Command began building out its Cyber Mission Force to combat issues like counterterrorism and financial cybercrime coming from Iran. “Completely different world in which we live in today,” he said, citing the threats from China and Russia.

Brandon Wales, a former executive director of the CISA, said there is the need to bolster U.S. cyber capabilities, but he cautions against major structural changes during a period of heightened global threats.

“A reorganization of this scale is obviously going to be disruptive and will take time,” said Wales, who is now vice president of cybersecurity strategy at SentinelOne.

He cited China’s preparations for a potential conflict over Taiwan as a reason the U.S. military needs to maintain readiness. Rather than creating a new branch, Wales supports initiatives like Cyber Command 2.0 and its aim to enhance coordination and capabilities within the existing structure. “Large reorganizations should always be the last resort because of how disruptive they are,” he said.

Wales says it’s important to ensure any structural changes do not undermine integration across military branches and recognize that coordination across existing branches is critical to addressing the complex, multidomain threats posed by U.S. adversaries. “You should not always assume that centralization solves all of your problems,” he said. “We need to enhance our capabilities, both defensively and offensively. This isn’t about one solution; it’s about ensuring we can quickly see, stop, disrupt, and prevent threats from hitting our critical infrastructure and systems,” he added.

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Pain management startup Sword Health expands into mental health, raises $40 million

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Pain management startup Sword Health expands into mental health, raises  million

Sword Health, a startup focused on helping people deal with pain through digital services, is expanding into mental health and has raised additional capital to fuel its growth.

The 10-year-old company is introducing Mind, which uses a combination of artificial intelligence, hardware and human mental health professionals to treat patients with mild depression and anxiety. Sword said Mind will help users access care whenever they need it, rather than during sporadic, hourlong appointments. 

“It’s really a breakthrough in terms of how we address mental health, and this is only possible because we have AI,” Sword CEO Virgílio Bento told CNBC in an interview.

Also on Tuesday, Sword announced a $40 million funding round, led by General Catalyst, in a deal that values the company at $4 billion. The fresh cash will support Sword’s efforts to grow through acquisitions, as well as its global expansion and AI model development, the company said. 

The round included participation from Khosla Ventures, Comcast Ventures and other firms. Sword had raised a total of more than $450 million as of September, according to PitchBook. 

The financing lands as the digital health market shows signs of recovery following a difficult post-Covid stretch, when rising inflation, higher interest rates and a return to in-person activities led to a dramatic retreat in the industry.

Earlier this month, Omada Health, which offers virtual care programs to supports patients with chronic conditions such as diabetes and hypertension, held its Nasdaq debut, though the stock is trading below its initial public offering price. Weeks before that, digital physical therapy provider Hinge Health hit the New York Stock Exchange. The shares are trading a few dollars above their offer price.

Sword, which was founded in Portugal and is now based in New York, offers tools for digital physical therapy, pelvic health and movement health to help patients manage pain from home and avoid other treatments such as opioids and surgery. Patients can sign up for Sword if it’s supported by their employer or their health plan.

Mind users will receive a wrist wearable called the “M-band” that can measure environmental and physiological signals such as heart rate, sleep and the lighting in a user’s environment. Mind also includes access to an AI Care agent and human mental health professionals, who can deliver services such as traditional talk therapy. 

Bento said a human is always involved with a patient’s care, and that AI is not making clinical decisions.

For example, if a patient has an anxiety attack, Sword’s AI will recognize that and could ask a clinician to approve some physical activity for later that day to help with recovery. The clinician would either approve the physical activity that the AI suggested, or override it and propose something else. 

“You have an anxiety issue today, and the way you’re going to manage is to talk about it one week from now? That just doesn’t work,” Bento said. “Mental health should be always on, where you have a problem now, and you can have immediate help in the moment.”

Bento said Sword has some clients that have been on a waiting list for Mind, and the startup has been testing the offering with some of its design partners. He said early users have approved of Mind’s personalized approach and convenience.

“We believe that it is really the future of how mental health is going to be delivered in the future, by us and by other companies,” Bento said. “AI plays a very important role, but the use of AI — and I think this is very important — needs to be used in a very smart way.”

Disclosure: Comcast, the parent of Comcast Ventures, is the owner of NBCUniversal, parent company of CNBC.

WATCH: Billionaire investor Vinod Khosla on Sword Health investment, opportunities in AI and AI competition

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Trump’s $499 smartphone will likely be made in China

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Trump's 9 smartphone will likely be made in China

US President Donald Trump uses a cellphone aboard Marine One before it departs Leesburg Executive Airport in Leesburg, Virginia, on April 24, 2025. Trump is returning to the White House after attending a MAGA, Inc. dinner at the Trump National Golf Club Washington, DC.

Alex Wroblewski | AFP | Getty Images

The Trump Organization’s newly-announced smartphone will likely be made in China, experts say, despite claims that the device will be manufactured in the U.S.

Owned by U.S. President Donald Trump, the company on Monday announced the T1, a gold-colored device which it said would retail for $499. The smartphone will run Google’s Android operating system.

The Trump Organization says the phone will be “built in the United States” — but experts note the phone was likely designed and would be manufactured by a Chinese firm.

“There is no way the phone was designed from scratch and there is no way it is going to be assembled in the U.S. or completely manufactured in the U.S.,” Francisco Jeronimo, vice president at International Data Corporation, told CNBC on Tuesday. “That is completely impossible.”

Jeronimo suggested that the phone would likely be produced by a Chinese original device manufacturer (ODM) — a type of company that designs and manufacturers products based on the specifications of another firm.

“Despite being advertised as an American-made phone, it is likely that this device will be initially produced by a Chinese ODM,” Blake Przesmicki, an analyst at Counterpoint Research said in a note on Monday.

Jeff Fieldhack, research director at Counterpoint Research added that “the U.S. does not have local manufacturing capabilities readily available.”

Smartphone manufacturing came into focus after Trump threatened tariffs on devices imported into the U.S. While those have yet to materialize, the American president has poured scrutiny on Apple‘s supply chain, urging the iPhone maker to manufacture its flagship handset in the U.S. The call is part of a broader desire from Trump to see more manufacturing of electronics be undertaken in the U.S.

Several experts have noted that manufacturing iPhones in the U.S. would be nearly impossible and would certainly raise the price of the product substantially. On top of that, getting large-scale manufacturing off the ground in the U.S. would take several years.

Phone will need foreign components

Even if some manufacturing of the device were done in the U.S., smartphone supply chains are global, and handset components come from several countries.

The Trump Organization’s T1 is no different. While no information has been revealed on particular components, the specifications could give a hint of what to expect.

The device will have a 6.8-inch AMOLED display, a kind of screen that is made primarily by South Korean firm Samsung. LG, another South Korean firm, also produces the screen, as does Chinese firm BOE.

For comparison, Apple’s top end iPhone 16 Pro Max, has a 6.9-inch display and starts at $1,199.

At T1’s $499 price point, the smartphone will likely use a processor from Taiwanese firm MediaTek, which would be manufactured in Taiwan. If the device were to contain a Qualcomm chip instead, that would also likely have to be made in Taiwan.

The phone’s advertised 50-megapixel camera will meanwhile require image sensing chips — a market that is dominated by Japanese firm Sony for smartphones. There are smaller players in China and elsewhere.

The device’s memory is one area that could use American technology, potentially from Micron, which manufactures its components in the U.S. But other players, like South Korea’s Samsung, could be potential suppliers.

“Even when there is local manufacturing available the company will have to rely on components that are being imported from outside the US,” Counterpoint Research’s Fieldhack said.

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Tencent bets its China WeChat and gaming expertise will help it win cloud business in Europe

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Tencent bets its China WeChat and gaming expertise will help it win cloud business in Europe

Chinese tech company Tencent is a gaming giant and the parent company of WeChat, the ubiquitous social messaging app in China.

Cheng Xin | Getty Images News | Getty Images

Tencent has spent years evolving into a gaming and social media giant in China and in the process, has built up its cloud computing capabilities.

The technology firm is now looking to bring that expertise to Europe as it ramps up expansion of its cloud business overseas, Dowson Tong, CEO of Tencent’s cloud group told CNBC.

“We have strengths and competence in very specific technology areas, as well as industry verticals,” Tong said in an interview last week. “These are are very unique technology capabilities that have been developed over many years [and] started from our products in China.”

“So we intend to bring a lot of this technology expertise to Europe. We’re talking to a lot of interested potential customers.”

Tencent’s European push will pitch it against U.S. hyperscalers Amazon, Microsoft and Alphabet-owned Google, which collectively make up 70% share of Europe’s cloud market.

But the Chinese firm is hoping to focus on specific areas where it has built up capabilities to differentiate from rivals.

Tong said these include cloud technologies for areas like optimizing video streaming, ensuring a smooth gaming experience, and developing and hosting so-called “super apps” like WeChat — China’s biggest messaging service. WeChat is often seen as the pioneer of super apps, a term that refers to an application with multiple functions, such as messaging and payments.

Tong gave an example of Tencent’s cloud computing work with French telecommunications firm Orange in supporting the company’s Max it app in Africa. In the area of gaming, Tencent’s cloud technology can improve “latency,” which is a technical term for the lag between a player’s actions and what happens on screen, Tong said.

The Chinese company is also betting on European companies opting for multiple cloud providers for services, instead of relying on one or two of the big players.

“I would say that’s actually a … deliberate strategy of ours to make the customers feel more comfortable using our technology, especially in a multi-cloud environment,” he said, adding that customers want to be able to interoperate.

AI push

Cloud computing companies have put an increased focus on selling artificial intelligence tools as a way to boost revenue and differentiate their offerings from rivals.

Tencent has built up its own artificial intelligence foundational model in China called Hunyuan. But it also uses some models created by Chinese firm DeepSeek in its products.

Tong said Tencent would take a similar approach in Europe when it comes to AI, potentially offering products built on European models.

“Our focus would be providing tools that would work with different foundation models and ultimately, it’s the customer’s decision which model works best for them,” Tong told CNBC.

“So I think at the end of the day, we would always go to our customers, find the problems they wanted addressed, provide them tools so that they can accomplish what they need, and realise the cost efficiency that we can offer.”

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