‘Exciting, Crucial’ Time in AI Development, Official Tells Innovation Board

By Lisa Ferdinando, DoD News, Defense Media Activity

WASHINGTON -- Artificial intelligence is a strategic priority for the Defense Department that could transform the way the department operates, the head of machine learning at the Defense Innovation Unit Experimental said yesterday.

“We are in the midst of an exciting and crucial time in the development of AI,” Brendan McCord told a meeting of the Defense Innovation Board, held at DIUx headquarters in Mountain View, California.

McCord pointed out the recent announcement of the creation of DoD’s Joint Artificial Intelligence Center, or JAIC, saying it is an effort that is significant to the department and the country. “Structurally, we know that AI has the potential to be an enabling layer across nearly everything,” he said, explaining it means countless applications in daily life and could affect all areas of the department.

AI provides the opportunity for humans to “see more deeply, to act with greater precision, to be offered more choices and scenarios, offered better advice,” McCord said, adding that it “changes the nature of things.”

Affecting a Variety of Tasks

Artificial intelligence could affect the way the department does a variety of tasks, such as maintaining equipment, perceiving its environment, training and protecting its members, defending its networks, operating its back office, providing humanitarian aid and responding to disasters, he said.

He highlighted four themes of the JAIC: improving the ability to translate the technology into decisions and impact; helping the department evolve partnerships with industry, academia, allies and partners; attracting and cultivating world-class talent; and supporting the goals of the National Defense Strategy.  

Defense Innovation Board Executive Director Joshua Marcuse said multiple agencies are making progress on projects that align with the board’s recommendations. He highlighted several of those areas: embedding computer science as a core competency; catalyzing innovation in AI and machine learning; implementing acquisition innovation; expanding new approaches to innovation; embedding technical teams at major commands; making computing and bandwidth abundant; taking a new approach to data; and establishing tech and innovation training for senior leaders.

Building Innovation Capacity with Allies, Partners

The DIB is a federal advisory board that launched in April 2016 with a two-year, renewable mandate. It comprises private-sector leaders and innovators to provide recommendations to the secretary of defense and other senior defense leaders in an effort to improve DoD’s processes and apply best practices.

The agenda at yesterday’s quarterly meeting included building innovation capacity with allies and partners, in support of a National Defense Strategy priority of strengthening alliances and creating new partnerships.

“I cannot be prouder of the progress that has occurred,” DIB Chairman Eric Schmidt, technical advisor to the board of Alphabet Inc., said as he closed the meeting, pointing out that senior leaders really want to address the underlying challenges they face.

The board’s last previous meeting was in April in Boston. The next meeting is set for October in the national capital area.

DoD IT Efforts Focus on Warfighter, Competitive Edge, CIO Says

By Lisa Ferdinando, DoD News, Defense Media Activity

ARLINGTON, Va. -- The Defense Department’s information technology efforts are focused on maintaining the warfighters’ edge and supporting national defense priorities, DoD’s chief information officer said here today.

“Today's security environment is affected by rapid technological advancements and the changing character of war,” Dana Deasy said in a keynote address at a conference hosted by Defense Systems. “The warfighter needs access to intelligence and communication to enable quick decision-making and maintain a competitive edge.”

DoD is in a “period of unified purpose, intellectual rigor, and unwavering dedication” to the National Defense Strategy's three lines of effort – increasing lethality, strengthening alliances and reforming business practices, he said.

Deasy identified four strategic areas in the department’s digital modernization in support of the National Defense Strategy, listing them in order of integration: cloud; artificial intelligence; command, control and communications; and cyber.

Cyber, Deasy said, is central to everything the department does.

“We must dominate in cyber,” he said. “The complexity and interdependencies of our digital modernization and adversary use of cyber means it is more critical each day that we place cyber security first.”

The department, he said, is countering cybersecurity threats with a broad range of tools and policies, as it works closely with U.S. Cyber Command, federal agencies, mission partners and industry.

Enterprise Cloud System Supports Warfighter

Deasy, who is leading the department’s cloud initiative, said the department needs an enterprise cloud system that allows flexibility in deciding where to place workloads, as well as ensuring the continuity of those workloads.

“Enterprise cloud will lay the foundation for so many future warfighter capabilities,” he said.

He outlined the need for consistent infrastructure for managing both classified and unclassified data. The platform must encourage an “enterprise approach to developing cloud-aware applications,” he said.

Over time, the Defense Department will fully leverage the benefits of a multicloud, multivendor environment, he said. The department currently operates with multiple clouds, but that capability is “disparate and disjointed,” he said. He added that DoD lacks “true enterprise capability that will deliver the efficiencies and the scale that the department needs.”

The CIO pointed out there is a “full, top-down, bottom-up review” of the Joint Enterprise Defense Infrastructure, JEDI, effort, which is seeking an enterprisewide cloud infrastructure to ensure warfighters have access to real-time, mission-critical data.

Technology Solutions for Warfighters

On artificial intelligence, Deasy highlighted the creation of the Joint Artificial Intelligence Center. He described it as another significant effort for the department, saying it will help DoD advance its ability to organize for AI capability delivery and to learn as an enterprise.

“When I think about cloud, and AI, and all of the advanced capabilities we want to bring to the warfighter, I think about making sure the warfighter has the right comms and the right information at the right time,” he said. “And the same goes for our mission partners.”

On command and control, Deasy explained the department’s digital modernization will ensure updates to the nuclear triad are matched with modern and secure command and control systems. “I have directed my staff to stay in lockstep with U.S. Strategic Command as we go forward on this,” he stated.

Deasy, who has been in the job for two months, serves as the principal staff assistant and senior advisor to the secretary of defense and deputy secretary of defense for information technology.

Charges filed against second defendant for insider trading related to the Equifax data breach

ATLANTA - Sudhakar Reddy Bonthu, a former software development manager for Equifax, was arraigned today on federal charges of insider trading for allegedly using information entrusted to him to purchase put options and turn a profit when the news of the data breach was made public.  A grand jury previously indicted Jun Ying, a former chief information officer of Equifax U.S. Information Solutions, on charges of insider trading relating to the data breach.  Ying pleaded not guilty on March 15, 2018.

“Bonthu allegedly took advantage of his position to profit while members of the public were unaware of the data breach at Equifax,” said U.S. Attorney Byung J. “BJay” Pak.  “The integrity of the stock markets are jeopardized when greedy individuals who are entrusted with nonpublic information use the knowledge for their benefit.”

“Company insiders must follow the same rules that govern investors, otherwise their actions undermine the public’s confidence in the nation’s stock markets,” said J. C. Hacker, Acting Special Agent in Charge of FBI Atlanta. “To maintain a fair and equitable stock market for everyone, the FBI will do everything in its power to hold those accountable who would choose to take advantage of their inside knowledge.”

“As alleged in our complaint, Bonthu used confidential information to determine that his company had suffered a massive data breach and then illegally profited from it,” said Richard R. Best, Director of the Securities and Exchange Commission’s Atlanta Regional Office.  “Corporate employees cannot take advantage of their access to sensitive information and unlawfully benefit from it.”

According to U.S. Attorney Pak, the charges, and other information presented in court: Equifax Inc. is a consumer credit reporting agency headquartered in Atlanta. During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million consumers.

Sudhakar Reddy Bonthu was a software development manager for Equifax’s Global Consumer Services team in August 2017.  In that role, he was entrusted with information that allegedly resulted in him concluding that Equifax was the victim of a data breach.  On August 25, 2017, Bonthu and other Equifax employees were asked to assist in responding to the breach, although he was not directly informed that Equifax had been breached.  On August 25, 2017, Bonthu was informed that the target date for announcing the breach publicly was September 6, 2017.  Around August 30, 2017, Bonthu learned that approximately 100 million individuals’ information was exposed as part of the breach and that the data included names and Social Security numbers.  The next day, Bonthu received an email related to his work on the breach with a file attached named “EFXDatabreach.postman_collection.”  “EFX” is the stock ticker symbol for Equifax.

On September 1, 2017, Bonthu bought 86 put options in Equifax stock that expired on September 15, 2017.  Those put options allowed him to profit if the value of Equifax stock dropped within that two-week period. Equifax publicly disclosed the data breach on September 7, 2017, and its stock fell the next day.  Bonthu then exercised his put options, realizing a profit of more than $75,000.

Sudhakar Reddy Bonthu, 44, of Atlanta, Georgia was arraigned on a criminal information before U.S. Magistrate Judge Alan J. Baverman, after waiving his right to be indicted by a federal grand jury.

Members of the public are reminded that an information and an indictment only contain charges.  A defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation, with assistance from the U.S. Securities and Exchange Commission.

Christopher J. Huber, Deputy Chief of the Complex Frauds Section, and Assistant U.S. Attorney Lynsey M. Barron are prosecuting the case.