As we tend to say here at Tematica, it only takes a high profile headline to remind people about the increasingly pervasive threat of cyber attacks, the 21st century’s theater for war, that is a tailwind for our Safety & Security investing theme. Typically these headlines for these attacks surround individuals and corporations, but this time it’s the US Navy and as one might suspect an attack on that institution calls for sophisticated tactics. The attack on the Navy explains why the Department of Defense budget is shifting its spending with increases in cybersecurity, and we would not be surprised to see that become a key point of focus and due diligence by the Navy and other armed forces with their supply chains.
The Navy and its industry partners are “under cyber siege” by Chinese hackers and others who have stolen national security secrets in recent years, exploiting critical weaknesses that threaten the U.S.’s standing as the world’s top military power, an internal Navy review concluded.
The assessment, delivered to Navy Secretary Richard Spencer last week and reviewed by The Wall Street Journal, depicts a branch of the armed forces under relentless cyberattack by foreign adversaries and struggling in its response to the scale and sophistication of the problem.
The review presented the threat posed by China in particularly stark terms, arguing that its cyber espionage operations against the U.S. military, its suppliers and the private sector in general have shifted power dynamics between the world’s two biggest economies.
China has “derived an incalculable near- and long-term military advantage from it [the hacking], thereby altering the calculus of global power,” the report said.
FireEye last week renamed the Chinese hacking group believed to be behind the attacks on Navy contractors and research universities, from Temp.Periscope to Advanced Persistent Threat 40, or APT 40, a rare designation the firm reserves only for the most sophisticated hacking squads it has high confidence it has correctly identified.