#204 - Dmitri Alperovitch - China's Cyber Sleeper Cells, Taiwan & The Second Cold War

**Dmitri Alperovitch** (0:00)
Instead of just breaking into companies or governments and stealing secrets, stealing IP, they launched this new campaign that the US government calls Volt Typhoon that is designed to penetrate organizations and networks where you have nothing worth stealing. So small water utilities, port facilities, electric substations and power plants, and they get into those networks and they do nothing.

**Peter McCormack** (0:23)
Just sit there.

**Dmitri Alperovitch** (0:24)
They just sit and wait.

**Peter McCormack** (0:25)
Sleeper cells.

**Dmitri Alperovitch** (0:26)
Sleeper cells waiting for orders to come in and destroy that network in the event of conflict or in an attempt to deter us from intervening into a conflict. Now, this is what the military would call preparation of the battlefield. And this is one of the many reasons that, one of the many signs that I look at and say, this is now different, they're preparing for an invasion of Taiwan. You won't be able to get any microelectronics components for your MacBooks, for your PCs, for your servers, for your cars, for your refrigerators. Like everything around us is now dependent on chips. If there is any sort of conflict or blockade of Taiwan, you have $5 trillion of GDP wiped out in the first year. Jesus. And I think that's probably a low.

**Peter McCormack** (1:10)
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I definitely want to talk about how AI has changed the cyber security game, but you were talking to me beforehand about how two countries have tried to invade Taiwan. You asked me to guess. I mean, China was the obvious one, but you asked me to guess the other. You said it was the US, and I didn't know anything about this.

**Dmitri Alperovitch** (1:53)
In the last 100 years, the two countries that have seriously prepared for the invasion of Taiwan, obviously China, particularly in the last 45 years or so, and the United States that during World War II, when Taiwan was still under Japanese occupation, as we were hopping across the islands in the Pacific on the way to mainland Japan, one of the plans that was being proposed was to invade Formosa, as Taiwan was called at the time.
And the US military even developed a war plan in August of 1944 for this invasion. What happened in June of 1944? The greatest military amphibious invasion in human history, Operation Overlord, the landing of the beaches in Normandy. The interesting thing is the similarities between the two, right? Taiwan's trade about the width of the English Channel, landing on the beaches that are well defended, and obviously the Normandy invasion, you could say, even gave us a great deal of hope that this can be successful, gave us experience to orchestrate something like this. And nevertheless, this plan that was put together was called Operation Causeway. You can look it up online, it's available. The Chinese are studying the heck out of it.
And that plan called for double the number of forces that were used in Normandy, right? 150,000 Allied troops crossed the English Channel on June 6, 1944 Over 300,000 were gonna be used for Operation Causeway. It was gonna be a two pincer maneuver from mainland China and from the Philippines, which the Chinese today do not have the luxury of having. And they expected over 45,000 casualties in a brutal two month campaign to take the out in 1944 Only against 60,000 entrenched Japanese forces that were on the island at the time. So just to give you a sense for where things are today, there are over 100,000 active duty forces in the Taiwanese military who are actually pretty good.
A lot of disparagement that you hear about Taiwanese military. Most of that has to do with the reserves, so which there are over a million. Their training is quite lacking, but the active duty people are quite good.

**Peter McCormack** (3:54)
What's the population in Taiwan?

**Dmitri Alperovitch** (3:56)
Around 25 million. So it's quite significant.
And by the way, just to give you a sense of casualties on D-Day, Allies lost 2,000 people, right? So 45,000 casualties for Taiwan. And ultimately, Roosevelt MacArthur looked at this and said, no, this is too risky, too costly. We're going to bypass it for most, so we're going to go for Okinawa, which is what we ultimately did. So for the United States, that has just pulled off the greatest amphibious invasion in human history, obviously, with Allies, to say this is difficult. In 1944, before long-range anti-ship missiles, radar, that was much more effective today than it was back then, all the sort of satellite imagery, et cetera, this is now infinitely more complex, infinitely more dangerous for the Chinese to pull off, and something that they've never done before, unlike us. In fact, they have literally no one in the Chinese military, in the PLA, that has any combat experience whatsoever. The last person that wore the uniform in combat in 1979, the last time they fought a war, which was with the Vietnam, which they suffered quite a number of defeats in that conflict and had to withdraw.