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U.S. Clamps Down on Investment in Chinese Tech Companies

By Kim S. Nash

 

Happy Monday. President Trump signed into law new powers to screen and restrict U.S. investment in Chinese technology firms, marking the most significant effort yet to police how American capital flows into businesses that bolster Beijing’s military and surveillance state.

The outbound-investment provisions, part of the annual National Defense Authorization Act, cites entities in China and other countries—including Cuba, North Korea, Venezuela and Russia—that develop “dual-use” tech with both commercial and military applications. Read the full WSJ story.

Separately, nine U.S. lawmakers want several companies formally added to a Defense Department list of Chinese companies aiding the military, Reuters reported. AI firm DeepSeek, smartphone maker Xiaomi and electronics company BOE Technology Group are among them. 

More news below. 

 

‏‏‎ ‎

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More Cyber News

PHOTO: LEV RADIN/ZUMA PRESS

Trump's AI order ignored: New York Gov. Kathy Hochul on Friday signed into law a new bill aimed at regulating artificial intelligence companies and requiring them to write, publish and follow safety plans. Starting Jan. 1, 2027, any company with more than $500 million in revenue that develops a large AI system will have to publish and follow protocols aimed at preventing critical harm from the AI models and report any serious breaches or else face fines. (CIO Journal)

  • Further reading from WSJ Pro: Trump Order on AI May Not Deter State Laws

Google Cloud and Palo Alto Networks signed a multibillion deal to expand their partnership, building AI security tools and migrating certain Palo Alto systems to Google Cloud. The cyber company will also use Google's Gemini and other AI technology. (Reuters)

Insiders plead guilty: A former employee at Tel Aviv-based Sygnia Consulting, an incident-response company, and a former ransomware negotiator at Chicago-based cyber and crypto firm DigitalMint pleaded guilty late last week to charges related to hacking U.S. companies. The pair operated over several years, extorting millions, the Justice Department said.

  • A third suspect worked with them, according to the Justice Department, but hasn't been named in court documents. (Bloomberg)

Senator wants action on Russian and Chinese contributions to open source. Coders in Russia and China are building on open-source software widely used by U.S. companies, presenting a national security threat, Sen. Tom Cotton (R., Ark.) said in a letter to National Cyber Director Sean Cairncross. Cotton urged Cairncross to track these contributions and monitor foreign influence on key open-source tools. 

Breach tally grows at Conduent. Business-process outsourcer Conduent Business Services disclosed that more than 10.7 million Texans had their personal and medical data exposed in a 2024 ransomware attack. That is much larger than Conduent's initial count of more than 42,000 reported to the U.S. Department of Health and Human Services in October 2024 and then a subsequent update to four million in Texas alone. 

  • Conduent said it discovered the hack on Jan. 13 of this year. 
25,000+

Number of Fortinet devices exposed to bugs that let hackers bypass authentication steps, according to internet security watchdog Shadowserver. That includes at least 5,400 in the U.S., Shadowserver said.

Fortinet has issued patches for the vulnerabilities. (Bleeping Computer)

 

WSJ Pro Cyber Index

Qualys dropped the most in a largely down week for cybersecurity firms. The stock was one of 14 cyber companies to end the negative, losing 6.71%. The overall index dropped 3.43% for the week. With a late rally Friday, Varonis ended the week on a high note, rising more than any other stock, at 2.34%.

—Jon Leckie

 

About Us

The WSJ Pro Cybersecurity team is Deputy Bureau Chief Kim S. Nash and reporters Angus Loten and James Rundle. Follow us on X @WSJCyber. Reach the team by replying to any newsletter you receive or by emailing Kim at kim.nash@wsj.com.

 
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