    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

                                     ______

         PROTECTING OUR EDGE: TRADE SECRETS AND THE GLOBAL AI ARMS RACE

    =======================================================================

                                    HEARING

                                   BEFORE THE

                      SUBCOMMITTEE ON COURTS, INTELLECTUAL
                     PROPERTY, ARTIFICIAL INTELLIGENCE, AND
                                  THE INTERNET

                                     OF THE

                           COMMITTEE ON THE JUDICIARY

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                             WEDNESDAY, MAY 7, 2025

                                   __________

                               Serial No. 119-19

                                   __________

             Printed for the use of the Committee on the Judiciary

      GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

                   Available via: http://judiciary.house.gov

                                 ______

                 U.S. GOVERNMENT PUBLISHING OFFICE
     60-318          WASHINGTON : 2025

                           COMMITTEE ON THE JUDICIARY

                            JIM JORDAN, Ohio, Chair

    DARRELL ISSA, California             JAMIE RASKIN, Maryland, Ranking
    ANDY BIGGS, Arizona                      Member
    TOM McCLINTOCK, California           JERROLD NADLER, New York
    THOMAS P. TIFFANY, Wisconsin         ZOE LOFGREN, California
    THOMAS MASSIE, Kentucky              STEVE COHEN, Tennessee
    CHIP ROY, Texas                      HENRY C. ``HANK'' JOHNSON, Jr.,
    SCOTT FITZGERALD, Wisconsin              Georgia
    BEN CLINE, Virginia                  ERIC SWALWELL, California
    LANCE GOODEN, Texas                  TED LIEU, California
    JEFFERSON VAN DREW, New Jersey       PRAMILA JAYAPAL, Washington
    TROY E. NEHLS, Texas                 J. LUIS CORREA, California
    BARRY MOORE, Alabama                 MARY GAY SCANLON, Pennsylvania
    KEVIN KILEY, California              JOE NEGUSE, Colorado
    HARRIET M. HAGEMAN, Wyoming          LUCY McBATH, Georgia
    LAUREL M. LEE, Florida               DEBORAH K. ROSS, North Carolina
    WESLEY HUNT, Texas                   BECCA BALINT, Vermont
    RUSSELL FRY, South Carolina          JESUS G. ``CHUY'' GARCIA, Illinois
    GLENN GROTHMAN, Wisconsin            SYDNEY KAMLAGER-DOVE, California
    BRAD KNOTT, North Carolina           JARED MOSKOWITZ, Florida
    MARK HARRIS, North Carolina          DANIEL S. GOLDMAN, New York
    ROBERT F. ONDER, Jr., Missouri       JASMINE CROCKETT, Texas
    DEREK SCHMIDT, Kansas
    BRANDON GILL, Texas
    MICHAEL BAUMGARTNER, Washington
                                     ------

                 SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY,
                   ARTIFICIAL INTELLIGENCE, AND THE INTERNET

                        DARRELL ISSA, California, Chair

    THOMAS MASSIE, Kentucky              HENRY C. ``HANK'' JOHNSON, Jr.,
    SCOTT FITZGERALD, Wisconsin              Georgia, Ranking Member
    BEN CLINE, Virginia                  ZOE LOFGREN, California
    LANCE GOODEN, Texas                  TED LIEU, California
    KEVIN KILEY, California              JOE NEGUSE, Colorado
    LAUREL LEE, Florida                  DEBORAH ROSS, North Carolina
    RUSSELL FRY, South Carolina          ERIC SWALWELL, California
    MICHAEL BAUMGARTNER, Washington      SYDNEY KAMLAGER-DOVE, California

                   CHRISTOPHER HIXON, Majority Staff Director
                      JULIE TAGEN, Minority Staff Director
                                C O N T E N T S

                                  ----------

                             Wednesday, May 7, 2025

                               OPENING STATEMENTS

                                                                       Page
    The Honorable Darrell Issa, Chair of the Subcommittee on Courts,
      Intellectual Property, Artificial Intelligence, and the
      Internet from the State of California..........................     1
    The Honorable Henry C. ``Hank'' Johnson, Ranking Member of the
      Subcommittee on Courts, Intellectual Property, Artificial
      Intelligence, and the Internet from the State of Georgia.......     2
    The Honorable Jamie Raskin, Ranking Member of the Committee on
      the Judiciary from the State of Maryland.......................     3

                                   WITNESSES

    Benjamin Jensen, Ph.D., Director, Senior Fellow, Center for
      Strategic and International Studies Futures Lab
      Oral Testimony.................................................     6
      Prepared Testimony.............................................     9
    John Villasenor, Professor of Electrical Engineering, Law, Public
      Policy, and Management, University of California, Los Angeles
      Oral Testimony.................................................    18
      Prepared Testimony.............................................    20
    Christopher A. Mohr, President, Software and Information Industry
      Association
      Oral Testimony.................................................    31
      Prepared Testimony.............................................    33
    Helen Toner, Director of Strategy and Foundational Research
      Grants, Georgetown University Center for Security and Emerging
      Technology, Georgetown University
      Oral Testimony.................................................    47
      Prepared Testimony.............................................    49
    Nicholas Anderson, President, Chief Operating Officer, Invictus
      International Consulting, LLC
      Oral Testimony.................................................    57
      Prepared Testimony.............................................    59

              LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING

    All materials submitted for the record by the Subcommittee on
      Courts, Intellectual Property, Artificial Intelligence, and the
      Internet are listed below......................................    82

    A report entitled, ``AI Talent Report,'' Jan. 14, 2025, Council
      of Economic Advisers (CEA), The White House, submitted by the
      Honorable Sydney Kamlager-Dove, a Member of the Subcommittee on
      Courts, Intellectual Property, Artificial Intelligence, and the
      Internet from the State of California, for the record

                     QUESTIONS AND RESPONSES FOR THE RECORD

    Questions from the Honorable Darrell Issa, Chair of the
      Subcommittee on Courts, Intellectual Property, Artificial
      Intelligence, and the Internet from the State of California,
      for the record
      Questions to Nicholas Anderson, President, Chief Operating
          Officer, Invictus International Consulting, LLC
        Response to questions from Nicholas Anderson, President,
            Chief Operating Officer, Invictus International
            Consulting, LLC
      Questions to Benjamin Jensen, Ph.D., Director, Senior Fellow,
          Center for Strategic and International Studies Futures Lab
      Questions to Christopher A. Mohr, President, Software and
          Information Industry Association
        Response to questions from Christopher A. Mohr, President,
            Software and Information Industry Association
      Questions to John Villasenor, Professor of Electrical
          Engineering, Law, Public Policy, and Management, University
          of California, Los Angeles
        Response to questions from John Villasenor, Professor of
            Electrical Engineering, Law, Public Policy, and
            Management, University of California, Los Angeles

         PROTECTING OUR EDGE: TRADE SECRETS AND THE GLOBAL AI ARMS RACE

                                  ----------

                             Wednesday, May 7, 2025

                            House of Representatives

               Subcommittee on Courts, Intellectual Property, and

                   Artificial Intelligence, and the Internet

                           Committee on the Judiciary

                                 Washington, DC

        The Committee met, pursuant to notice, at 10 a.m., in Room
    2141, Rayburn House Office Building, the Hon. Darrell Issa
    [Chair of the Subcommittee] presiding.
        Members present: Representatives Issa, Massie, Fitzgerald,
    Cline, Fry, Johnson, Ross, and Kamlager-Dove.
        Mr. Issa. The Subcommittee will come to order. Without
    objection, the Chair is authorized to declare a recess at any
    time.
        We welcome today our guests for a hearing on Trade Secrets
    in the Global AI Arms Race. I now recognize myself for a short
    opening statement.
        Today's hearing addresses the core tension in the age of
    artificial intelligence to push for disclosure, balanced with
    the need to protect innovation that drive U.S. leadership.
    There is a nondisclosure on the phone.
        The proprietary algorithms that, in fact, train data sets
    are likely to be now and in the future the secret sauce, not
    patented, not available to the public, but of such value that
    other nefarious actors will do anything to get them. Without
    strong protections, we risk sacrificing the very breakthroughs
    we aim to encourage. Some have called the sweeping AI
    disclosure mandates in the name of transparency. This Committee
    has strongly believed and will continue to believe in
    transparency, but like anything else, a protective order is
    just a promise and a promise that is historically not kept, in
    fact, has no value.
        We cannot require disclosure of trade secrets or
    proprietary data sets under the guise of transparency. Such
    disclosures would not only have a chilling effect on
    innovation, but hand strategic advantage to foreign adversaries
    who do not play by the same rules. Consider this. The United
    States' investment in AI is approaching $1 trillion. China has
    invested not more than one third as much and is already neck to
    neck with the United States. The DeepSeek and other Chinese
    models are rapidly catching up to American companies. Let's
    look deeper. The DeepSeek contains models that clearly were
    taken from OpenAI and other sets. We know China's speed is not
    merely because they invest in innovation. It is also the result
    of IP theft, reverse engineering, and efforts to circumvent
    U.S. export controls and more.
        China has also weaponized our legal system by financing
    lawsuits that target American firms in expensive litigation and
    with the intent, in many cases, to mine that proprietary
    information. All the while, China continues to refuse
    meaningful protections on U.S. IP in its own courts. I
    personally have been part of that recognition that they will
    not defend trademarks, patents, even when you go to the expense
    of getting them in China, even if you make your product in
    China, you will not be protected.
        Last, American companies have a reverse situation, one in
    which we are working constantly, and this Committee has worked
    tirelessly on a bipartisan to promote rocket dockets to, in
    fact, get the speed of decision to the lowest cost in the
    quickest time. Well, in China, you can be assured if you are an
    American company asserting your rights, you will go into the
    Never-Neverland of your case will come up some day.
        Efforts continue to include the need to prevent U.S.
    engineers with access to specific sensitive AI systems from
    sidestepping noncompetes and NDAs by working for Chinese firms.
    Ensure the disclosure regimes do not inadvertently reveal
    protection by mirroring EU-style regulations. I might say here,
    a little off the record, EU, as we speak, is second guessing
    their very disclosures. It has not escaped us that the AI Act
    of Europe, in fact, was a great step forward and as we speak
    many are pushing to take at least a small step backward. With
    that, I am delighted to introduce my Ranking Member for his
    opening statement.
        Mr. Johnson. Thank you, Mr. Chair. One hundred and 17 days
    ago, the Chinese company DeepSeek launched its flagship model,
    DeepSeek-R1. In the following days and weeks, American experts
    wrung their hands and shook their heads, many considering for
    the first time the possibility that we may be losing the so-
    called AI arms race.
        The DeepSeek claims R1 was developed faster and cheaper
    than comparable U.S. models. Others argue DeepSeek at a minimum
    violated OpenAI's terms of service to obtain proprietary
    training data. Where everyone seems to agree is that AI
    startups should be innovating faster. I have heard colleagues
    suggest we should forget regulations, ignore IP laws and just
    focus on clearing the way for AI companies. I agree everyone
    wins when we foster American AI startups, but I think it is a
    false choice to say we can succeed only if we do so
    irresponsibly.
        If you walk around the Capitol today you can see plants
    sprouting out of the soil beginning to grow. What you will
    notice if you look closely is some of those shoots growing in
    the shade look like they are growing faster than the others. As
    they race for just a little bit of sunlight, yes, they grow
    quickly, but ultimately, they grow less hardy, more brittle,
    and prone to disease. AI innovation works the same way. As we
    seek ways to promote American AI startups, we should also work
    to ensure that businesses meet minimum standards for system
    cybersecurity. We should ask what types of transparency are
    necessary to protect other IP rights and consider how to set
    standards while still protecting trade secrets. By encouraging
    companies to meet best practices and respect intellectual
    property rights, we will foster hardy competition that protects
    U.S. innovation from those who seek to undermine our success.
        The Government of China has made no secret of its intent to
    steal American intellectual property and there is bipartisan
    agreement that the United States should protect its innovations
    from those who seek to benefit from American ingenuity. There
    is also a right way and a wrong way to compete with our
    adversaries. While we don't always agree on this Committee, we
    have had meaningful discussions on the right to protect
    American IP from the Government of China, cybersecurity
    standards to keep our people and our institutions safe, and the
    threat landscape to AI innovation.
        The only trouble, on the other hand, has acted in ways that
    hurt American businesses. His ideologically inconsistent and
    unpredictable tariffs have hurt American consumers, American
    businesses, and our allies. Innovation in America suffers when
    the path forward is uncertain. For generations, American
    companies have benefited from attracting the best and the
    brightest from other Nations, yet, seemingly without reason,
    Trump again and again hurts American businesses by attempting
    to revoke already granted student visas and threatening the H1B
    visa program for highly skilled immigrants.
        The deleterious impact of these policies on AI innovation
    should not be ignored. According to a recent study, immigrants
    founded or cofounded 28 of the top 43 AI companies in the
    United States and 70 percent of full-time graduate students in
    fields related to artificial intelligence are international
    students. Instead of focusing on policies that stand to derail
    American innovation, we should focus of upholding our treaties
    and respecting our allies. We should encourage our research
    institutions to engage with universities around the world. The
    breakneck speed of innovation has made it easier than ever to
    reach out to people around the world. Now, is not a time for
    isolationism because history has shown us that true innovation
    thrives on openness. After all, groundbreaking inventions
    rarely emerge when knowledge is walled off.
        I thank the witnesses for being here today and I yield
    back.
        Mr. Issa. The gentleman yields back. We now recognize the
    Ranking Member of the Full Committee for his opening statement.
        Mr. Raskin. Thank you very much, Mr. Chair, and thanks to
    the witnesses for joining us. I am happy to participate in a
    rare hearing on the important bipartisan work of this
    Committee. We don't agree on a lot these days, but the
    importance of the U.S. intellectual property regime to American
    innovation is indeed a value that we all share. Even with this
    agreement in Congress, the Executive Branch has injected
    terrible instability into our intellectual property regime.
        Innovation depends on stable and predictable rules the
    people can rely on to secure their inventions and property
    rights, manufacture their products, and attract investors and
    consumers to their businesses. Instead of fostering a stable
    atmosphere which allows people to innovate, the Trump
    Administration has hampered creativity. Since he was
    inaugurated, Trump has revoked Federal research grants to
    universities where scientists make significant new discoveries
    every year. He has tried to take over some universities. He has
    tried to cancel student vias. Last time he was President, of
    course, he increased the denial for highly skilled immigrants
    who work in engineering, computer programming and at research
    labs in highly technical fields.
        Already in the first quarter of this year, Donald Trump's
    trade war against the world, except for Russia, has reduced the
    U.S. gross domestic product. It has raised prices for consumers
    and it has encouraged businesses to hoard goods. Chaotic
    tariffs that change from day to day make it difficult for
    businesses to plan ahead and result in them taking fewer risks.
    Companies are then less likely to invest in ideas and
    innovators are, in turn, less likely to strike out on their
    own.
        We may never know what inventions, life-saving cures,
    world-changing businesses are being sacrificed at the altar of
    Donald Trump's helter skelter and lawless tariff agenda. We
    should also remember that investors and creators aren't just
    big businesses.
        The heart of our IP system, our parents tinkering with an
    invention at the kitchen table after putting the kids to sleep,
    aspiring song writers, waiting tables to pay the bills while
    chasing their dreams, and engineering students researching the
    next big idea. Yet, now all these people are having a tough
    time in Trump's America, a place where hope of that next big
    break feels further and further away. Investing in ideas is a
    risky proposition, but it is even riskier for the individual
    who has to go it alone.
        Finally, in most cases intellectual property ownership is
    only as good as the ability to enforce that right in court.
    Every rights holder should be worried as we watch the all-out
    assault on the Judicial Branch unfold. A judicial system that
    doesn't work for everyone eventually won't work for anyone and
    that includes IP owners. Despite these threats, the U.S. IP
    system is still lauded around the world for its ability to spur
    innovation and creativity. That is in part because our Founders
    chose to promote innovation by protecting the rights of
    individual creators. In the Federalist 43, Madison wrote that,
    ``the utility of this power will scarcely be questioned,'' and
    in the case of patents and copyrights, the public good fully
    coincides with the claims of individuals. Rewarding individual
    discoveries and creations has allowed innovation to flourish.
        According to a recent study, the U.S. is home to over half
    of the more than 10,000 AI startups across the 10 countries
    leading in AI. We should be proud of our AI leadership. We must
    also take steps to protect American trade secrets from
    competing nations that seek to steal our technology. Some have
    referred to the push to develop the most advanced AI model as
    the AI arms race. Now, there is nothing wrong with competition
    in this sense, but when other countries threaten U.S.
    cybersecurity, steal our inventions, and conduct economic
    espionage against U.S. companies as the Government of China has
    done, that is cause for serious scrutiny. Just because we all
    agree AI systems should be secure from foreign threats, does
    not obviate the responsibility, of course, that AI platforms
    have to other rights holders and to consumers.
        Jack Dorsey and Elon Musk both recently made the claim that
    we should delete all IP law. I think that we can all
    emphatically reject that notion. America's intellectual
    property system has not just made us a global leader in AI; its
    very foundation created the careers of those two men.
    Intellectual property is the engine that powers our economy,
    drives innovation, jobs, and growth at every turn for all
    inventors, big and small, including Dorsey and Musk. Without a
    strong IP system, we risk losing the very spark that has made
    us such a leader in global innovation and opportunity.
        I look forward to hearing from our witnesses today and I
    thank you, Mr. Chair, and yield back.
        Mr. Issa. Without objection, all other opening statements
    will be included in the record.
        It is now my pleasure to introduce our panel of witnesses.
        Mr. Nicholas Anderson. Mr. Anderson is President and Chief
    Operating Officer of Invictus International Consulting Company
    which provides technical services for national security
    systems. He previously served as Chief Information Officer for
    public sector at Lumen Technologies and served at the
    Department of Energy, Office of Management and Budget, and the
    Department of the Navy, Coast Guard, and served on active duty
    as a United States Marine which I presume means that he has
    been to Camp Pendleton in my District. It is a rite of passage.
        Dr. Benjamin Jensen. Dr. Jensen is the Director of Future
    Labs and a Senior Fellow with the Defense and Security
    Department at the Center for Strategic and International
    Studies. He is also the Frank E. Petersen Chair for Emerging
    Technologies and a Professor of Strategic Studies at the Marine
    Corps University--I knew you were asked for a reason--on
    Advanced Warfare. Dr. Jensen previously served as Senior
    Research Director of the U.S. Cyber Solarium Commission and is
    a Reserve Officer in the United States Army. Double dipping.
        Mr. Christopher Mohr. Mr. Mohr is President of the Software
    Information Industry Association, a collection of
    entertainment, consumer, and business software companies. He
    previously served as Senior Vice President for Intellectual
    Property and General Counsel at that organization and continues
    to serve as the Chief Legal Officer for the association.
        Ms. Helen Toner. Ms. Toner is the Director of Strategies
    and Foundation Research Grants at Georgetown Center for
    Security and Emerging Technology. She previously served as
    Senior Research Analyst at Open Philanthropy where she advised
    policymakers and grantmakers on AI policy and strategy.
        Dr. John Villasenor is Professor of Electrical Engineering,
    Law, Public Policy, and Management and the facility Codirector
    at the Institute for Technology, Law, and Policy at UCLA. The
    professor works and his work is focused on technology and law-
    related to artificial intelligence, digital communication,
    computing, network, cybersecurity, and privacy.
        We welcome our witnesses here today and pursuant to the
    Committee's rules, I would ask that you all rise to take the
    oath and the right hand is always good to use.
        Do you solemnly swear or affirm under penalty of perjury
    that the testimony you will give will be true and correct to
    the best of your knowledge and information?
        Please be seated. Let the record reflect that all witnesses
    answered in the affirmative.
        Another part you have all seen on CSPAN, we would like you
    to stay as close as you can to five minutes. The lights on in
    front of you will count you down and indicate when you are
    close to, and then finally when you hit five minutes. Rest
    assured that not only will all your opening statements in their
    entirety be included in the record, but additional information
    that you provide or that later you provide pursuant to
    questions or things which are stimulated by our discussion. You
    really get hours and hours, you just get five minutes up front.
        Dr. Jensen.

                      STATEMENT OF BENJAMIN JENSEN

        Mr. Jensen. Thank you, Chair, Ranking Member Johnson, and
    the Members of the Subcommittee. Before I start, I view my job
    here today to really help frame a larger conversation. That
    conversation really is about the defining competition of the
    21st century and that is the race to shape what we are starting
    to call agentic AI. When I say agentic AI, I am not just
    talking about everybody playing with an LLM here or there or
    narrow imagery recognition. I am talking about the next level
    where all these applications start to work together and they
    start to generate actual knowledge, influence our decisions,
    and even help us manage complex tasks at scale. Frankly,
    whoever leads this agentic AI race is going to shape the rules
    of the future international order and I am not being
    hyperbolic. I sincerely mean that. If you talk about the
    efficiencies, the economic growth, the changing questions of
    governance, we are literally at the historical inflection point
    which made it so good to hear you bring in the Federalist
    Papers because we almost have to really think at that level
    about these tasks.
        The stakes could not be clearer. This is not just about AI
    as a tool of human flourishing or who makes more money or who
    makes a better poem with an app. This is really about whether
    or not this is going to be a mechanism for authoritarian
    control or a way to really embody and propagate the best
    traditions and values on which our Republic was founded. I
    really mean it about the stakes. Frankly, while America has
    been the leader of this, the pioneer, and you can go back to
    the invention of the term artificial intelligence at Dartmouth,
    all the early engineering from Cornell to other universities,
    as you point out, this kind of basic research plus the beauty
    of capitalism working together. Frankly, that is under assault.
    The People's Republic of China is exploiting our economy and
    our innovation ecosystem. Beijing is basically conducting a
    coordinated strategy that siphons off intellectual property,
    circumvents export controls, and exploits legal gaps with
    State-directed theft and replication, Chair, what you have
    accurately characterized as weaponizing our legal system
    against us.
        For at least today I want to talk about three ways the
    strategy unfolds, some technical, some more general. First,
    through knowledge distillation and what is called unbounded
    consumption attacks, Chinese firms replicated U.S. foundation
    models, so think OpenAI's ChatGPT, at a fraction, a fraction of
    the cost, not talking $1 billion to develop a model, we are
    talking millions of dollars. A significant economic difference.
    Essentially what they did is they harvested the outputs of
    American models, definitely without permission, and used them
    to build their own versions like DeepSeek. Bluntly, this is not
    innovative. This is intellectual looting.
        Second, through State sponsored cyber espionage, Chinese
    APT, Advanced Persistent Threat, groups like Salt Typhoon and
    others target everything from our cloud infrastructure to
    semiconductors. Increasingly, this isn't just random smash-and-
    grab hacking. It is a calculated campaign to steal what free
    societies and free people create.
        Third, despite export controls, China continues to access
    critical chips and software. Export controls have utterly been
    futile up to this point and really make us have to rethink what
    is our defensive play book and what is our offensive play book.
        Through loopholes, third party countries and subsidies,
    they keep advancing while American firms face regulatory
    burdens and shrinking market access. In short, the current
    approach is not enough. Export controls and AI diffusion policy
    do more economic harm than good. As you pointed out,
    Representative Johnson, we really have to protect the smaller
    innovators. How are we going to balance that?
        If the Chinese Communist Party and its network of little
    giants and firms with parties the State control are using this
    playbook of steal, copy, accelerate, what do we do? Well, first
    America is never powerless. We at the time that we act
    decisively and we preserve our AI leadership, and I think there
    are three things that we can discuss along those lines.
        First, we modernize intellectual property laws, and that we
    have amazing experts to talk to you about that. We need to
    address techniques like knowledge distillation and API abuse.
    We need to basically coordinate globally so it is not just in
    U.S. courts, it is other free society courts where we can bring
    this to bear. We even start to imagine--I love that you brought
    up again Federalist 43 , what would that look like written in
    2025? What would that look like if a legal scholar, using an
    LLM wrote it as a basis for us to start this conversation about
    what are property laws?
        Second, we may need to start treating AI companies like
    critical infrastructure. Their products support national
    security, economic competitiveness, and global influence and
    those designations mean that you can work across jurisdiction
    with other Subcommittees and other Committees to start to think
    about tax credits and other incentives that get you what you
    were talking about. How do you defend their IP?
        I will close with saying we go on the offense. Lawsuits
    alone will not deter coordinated State-backed theft campaigns,
    so we have to prioritize the type of intelligence collection
    that can be declassified and turned into legally admissible
    information that can use to hold China accountable in multiple
    courts. Frankly, even consider the type of offensive cyber
    action that makes them think twice about stealing from America.
        In closing, this is way more than about company profits. It
    is about free societies and nonauthoritarian regimes, assuming
    leadership of the coming AI century. I thank you for your time
    and I welcome your questions in the comment period.
        [The prepared statement of Mr. Jensen follows:]
     GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

        Mr. Issa. Thank you. Dr. Villasenor.

                      STATEMENT OF JOHN VILLASENOR

        Mr. Villasenor. Chair Issa, Ranking Member Johnson--
        Mr. Issa. Now, the little button in front when it turns
    red, it is a good sign.
        Mr. Villasenor. Chair Issa, Ranking Member Johnson, Ranking
    Member Raskin, and the Members of the Subcommittee, thank you
    very much for the opportunity to testify here today. I should
    mention at the outset that I am testifying in my own individual
    capacity, and I am not representing any organization.
        America is the clear global leader in AI, a technology that
    is foundational to our continued economic prosperity and
    national security. The competitive differentiation that is so
    instrumental to the success of the U.S. AI industry is
    vulnerable in several ways.
        First, precisely because American AI companies are so
    innovated and market leading, they are ripe targets for trade
    secret theft.
        Second, policy discussions regarding AI regulation here in
    the United States often give insufficient consideration to the
    potential collateral damage to trade secret threats. Given the
    enormous attention to generative AI products such as ChatGPT,
    it is important to keep in mind that AI is much than generative
    AI. The recent advances in other areas of AI are equally
    impressive. For instance, AI is revolutionizing drug discovery.
    AI is also at the core of algorithms that enable autonomous
    vehicles to navigate complex city streets. Collaborations
    between humans and AI are promising to bring improvements to
    medical image interpretation. AI can extend the human capacity
    to create new inventions and will revolutionize logistics,
    weather forecasting and many other fields. AI is critical to
    ensuring strong national defense.
        Overly expansive transparency rules would undermine AI
    leadership. Exhibit A for that would be, for example, the now-
    revoked Executive Order issued in October 2023, which would
    have required some AI companies to file with the Government
    information about the physical and cybersecurity measures used
    to protect their model weights. Clearly, if the Government were
    to maintain databases like that, those databases would become
    essentially a target list for cyber espionage, armed with the
    information hacked from those databases and those databases
    would get hacked, then State-sponsored actors could more easily
    enter the systems of leading AI companies.
        There are novel trade secret issues arising from the
    adaptive nature and complexity of AI systems. Because AI
    systems learn from their environment, they can operate in ways
    that can be elusive even to their designers. This creates some
    really important and interesting questions.
        First, can CRADAs of AI systems have trade secret rights in
    algorithms they do not understand? I believe that the answer to
    this question is yes. Suppose that a company builds an AI
    system that through adaptation has evolved to the point where
    an algorithm it is executing is quite different from the one
    initially envisioned and programmed by its employees. After the
    adaptation process, the company employees no longer know how
    the algorithm works, but they do know that it works extremely
    well for its intended purpose. Does this algorithm qualify as a
    trade secret owned by the company, even though no human knows
    what it is? In my view it does.
        Second, how can plaintiffs assert misappropriation of trade
    secrets they don't know? Well, the answer that asserting trade
    secret rights in an algorithm will require describing it which
    requires plaintiffs to learn it. It will not be sufficient for
    plaintiffs to State in effect we are not sure how our AI works,
    but whatever it is doing, it is our trade secret and the
    defendant has misappropriated it. Rather, plaintiffs will need
    to provide enough detail for a court and a defendant to know
    which specific trade secret is at issue.
        I would also like to briefly mention the global context.
    The preeminence of American AI companies creates an asymmetry.
    Policy makers outside the U.S. may have less concern than their
    U.S. counterparts about the collateral damage to trade secrets
    resulting from AI regulations. They will have little incentive
    to regulate in a manner that preserves the competitive
    advantage of U.S. AI companies.
        Finally, I would like to briefly comment on AI regulation
    more generally. In the past several years, there has been a
    steady drumbeat of calls to aggressively regulate AI. Sometimes
    this is motivated by the premise which I disagree with that AI
    is an existential threat to humanity. Sometimes it is motivated
    by the view which I also disagree that the best way for
    Government to respond to AI is by subjecting it to an extensive
    new regulatory regime and that slowing AI down so that it can
    progress only as fast as policymakers allow. If adopted in the
    U.S. this approach would directly undermine American AI
    leadership as there are countries, including geopolitical
    rivals, that will certainly avoid adopting policies centered on
    the goal of impeding AI development.
        It is also important to keep in mind that there is already
    a thicket of non-AI specific law and regulation that will apply
    to AI. For example, the use of a discriminatory AI system to
    make home loan decisions would already be unlawful under the
    Fair Housing Act.
        In closing, I would like to thank the Members of the
    Subcom-
    mittee for the opportunity to participate in today's hearing
    and I look forward to your questions.
        [The prepared statement of Mr. Villasenor follows:]
        GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

        Mr. Issa. Thank you. Mr. Mohr.

                    STATEMENT OF CHRISTOPHER A. MOHR

        Mr. Mohr. Mr. Chair, Ranking Member Johnson, Ranking Member
    Raskin, and the Members of the Committee, on behalf of SIIA and
    its members, thank you for this opportunity to share our views.
        The SIIA represents over 350 companies in the business of
    information. Our members range from startups to some of the
    largest and most recognizable corporations in the world. For
    over 40 years, we have advocated for the health of the
    information life cycle, advancing favorable conditions for its
    creation, dissemination, and productive use. Our members create
    educational software, search engines, e-commerce platforms,
    legal research and financial databases, and a variety of other
    products that people depend on in their day-to-day lives. We
    are the place where information and technology meet and
    occasionally collide.
        The SIIA was founded on the premise of respect for
    intellectual property rights, especially around software. For
    decades, we helped our members enforce their copyrights against
    infringers, something we still do. Today, our members are
    building AI into many of their products and services. They
    actively use it in their media operations, in the classroom, in
    fraud detection, in market data, money laundering
    investigations, and in locating missing children. They have
    invested billions in its development, acquisition, and use.
    They also have intellectual property rights undergirding that
    investment including patent, copyright, and trade secret
    rights.
        As both software and information become increasingly sold
    as services, the threat from IP theft has evolved. The most
    valuable part of technology may not be in simply copying and
    using it, although that is certainly a threat, but in figuring
    out how it works. Our members welcome competition within the
    bounds of legal rules. The problem is that not everybody
    follows them.
        From the very first days of the adoption of the TRIPS
    Agreement in 1994, our members have had problems with State
    sanctioned IP theft by the PRC. Now, the PRC has stated that it
    wishes to leave the world in AI by 2030 and reduce reliance on
    foreign technology. It intends to leverage the communist system
    and achieve that leadership in key areas including smart
    devices and speech recognition, image and video recognition,
    and financial services to name just a few. Unfortunately, for
    us and to mix metaphors a bit, the dragon has not changed its
    stripes. It is actively involved in the theft of trade secrets
    in several ways, from the use of insider threats to cyber-
    attacks to forced technology transfer to investment in U.S.
    startups, the conditioning market access under divulging and
    proprietary information.
        Legal rights are not the problem. Congress has adopted
    substantive rights governing trade secrets in the United States
    and a global framework to respect those rights. What is lacking
    is it means to sufficiently incentivize the Chinese Government
    to abide by those protections or to provide means to enforce
    those protections. While there is no perfect solution, Congress
    has tools that it can and should develop to further protect
    American AI development from foreign theft and possibly
    sabotage. We would suggest four areas for congressional
    attention.
        The first is cybersecurity, building and updating
    infrastructure to keep up with emerging and evolving threats is
    a constant project. Large companies have cutting-edge systems
    that they can use to protect their products and users. Smaller
    businesses lack such resources. The Government should continue
    to explore ways to help them.
        Second, Congress should ensure that the Committee for
    Foreign Investment, or CFIUS, continues to serve as an
    effective way to address trade secret risk by making sure that
    its scope of review remains adequate to address those risks.
        Third, Congress should assist the administration in working
    with our allies and partners to build AI infrastructure on
    trusted providers, adoption of Huawei and other PRC-located
    providers creates an unreasonable potential for trade secret
    theft.
        Finally, while the legal framework for protecting trade
    secrets is well developed, an emerging area of concern involves
    the exploitation of the U.S. legal system to gain unauthorized
    access to trade secret information through third party
    litigation funding of patent disputes by sovereign wealth
    entities. The landscape around AI and intellectual property is
    constantly evolving and as technology continues to advance, new
    threats will emerge. That pattern is unlikely to stop any time
    soon and we commend the Subcommittee for continuing to monitor
    these issues and engage industry.
        Thank you for your consideration of our views and I am
    happy to answer any questions.
        [The prepared statement of Mr. Mohr follows:]
       GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

        Mr. Issa. Thank you. Ms. Toner.

                        STATEMENT OF HELEN TONER

        Ms. Toner. Chair, Ranking Member Johnson, Ranking Member
    Raskin, and the Members of the Subcommittee, thank you for the
    opportunity to testify.
        My name is Helen Toner and I'm part of the founding team at
    CSET, the Center for Security and Emerging Technology at
    Georgetown, where for the past six years I've focused on AI and
    national security, U.S.-China competition over AI, and AI
    safety and security issues, more broadly.
        It's a cliche that AI is hard to govern because the
    technology is moving so fast, but there's one important thing
    about AI that is actually quite predictable: It's only getting
    more capable, more powerful, and more strategically critical.
        This is especially true of what gets called frontier AI
    systems, which are the focus of my testimony. Frontier AI is a
    term for the most cutting-edge general purpose AI systems, like
    Google's Gemini 2.5, OpenAI's o3, or Anthropic's Claude 3.7.
        The companies at the AI frontier are actively working to
    build so-called artificial general intelligence, or AGI, which,
    roughly, means AI that is as smart as a human, or even to build
    super intelligence, which is AI far more capable than a human.
    The CEOs of these companies claim that they'll get this far
    within the next 2-5 years. It is not just marketing hype; many
    top researchers agree.
        Even if 2-5 years is overly optimistic, the possibility
    that major tech companies could build human-level AI anytime in
    the foreseeable future should galvanize us to take action now.
    What action?
        If we agree that AI is of strategic importance is already
    high and will only grow from here, I want to note two vital
    national security interests that follow from that.
        First, for the topic of this hearing, the U.S. Government
    has a critical national security interest in protecting the
    trade secrets and IP of leading U.S. AI companies.
        Second, there's also a critical national security interest
    in understanding and monitoring the development of frontier AI
    as it moves toward AGI and even super intelligence.
        The most important point I want to make today is that these
    two critical priorities--security and transparency--do not need
    to be in tension with one another. We can pursue both in
    parallel.
        My written testimony lays out the kinds of trade secrets
    that are most important to protect, primarily AI models
    themselves, as well as the algorithmic secrets used to create
    them, and datasets, and hard regulated IP as well.
        I also lay out the areas where we most need transparency.
    These are things like testing for capabilities and risks of new
    systems; the goals that AI models are trained to pursue; safety
    and security risk management practices within the frontier AI;
    data on their internal use of AI, and whistleblower protections
    for their employees.
        Notice that there's not much overlap between the things we
    most need to keep secure and the things that we most need to
    bring into the sunlight. Where overlap does exist, we have
    options. Information can be shared with governments via secure
    channels, or it could be shared only with third-party
    independent auditors who work under NDA inside companies' own
    facilities.
        I would make the following five recommendations to this
    Subcommittee and to Congress:
        First, fund and expand security collaborations between the
    U.S. Government and frontier AI companies. There are several
    small-scale voluntary programs that have recently been started,
    including threat intelligence-sharing with the intelligence
    community and voluntary testing for capabilities that are
    relevant to national security. These initiatives are highly
    valuable and should be strengthened and expanded.
        Second, on transparency, you can use existing authorities
    or create new ones to increase visibility into the most
    advanced AI systems being built by frontier companies. Many of
    these companies have already made voluntary commitments to
    share safety and security information. So, Congress can ask
    them about how those commitments are going and make sure
    they're fulfilling them reliably. There are also existing
    authorities that the government can use to compel disclosure,
    if necessary. New legislation could enshrine transparency
    requirements targeted for AI or create whistleblower
    protections for AI company employees.
        Third, invest in the technologies and infrastructure that
    we need to ensure that strategically critical AI systems of the
    future stay secure. This could include R&D funding, public-
    private partnerships, or demonstration projects that push
    forward things like secure-by-design hardware or highly secure
    data centers.
        Fourth, consider giving companies permission to prioritize
    security in ways that are currently legally fraught. One
    example here is creating safe harbor from antitrust concerns,
    specifically, for collaboration on safety and security issues.
    Another possibility would be to enact legislation that makes it
    easier for AI companies to engage in intensive personnel
    vetting and monitoring to reduce insider threats.
        Fifth, in your interactions with AI companies, press them
    on what their cybersecurity practices look like and how they're
    working to improve. Use your bully pulpit to impress on them
    that this is a critical question of U.S. security and
    competitiveness. The United States cannot lead if adversaries
    have easy access to our best technology.
        Thank you and I look forward to your questions.
        [The prepared statement of Ms. Toner follows:]
        GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

        Mr. Issa. Thank you. Mr. Andersen.

                     STATEMENT OF NICHOLAS ANDERSEN

        Mr. Andersen. Mr. Chair, Ranking Member Johnson, Ranking
    Member Raskin, and the Members of the Subcommittee, thank you
    for the opportunity to testify today.
        My name is Nick Andersen. I've served in senior
    cybersecurity leadership roles in the previous Trump
    Administration, including as the Principal Deputy Assistant
    Secretary and performing the duties of the Assistant Secretary
    for Cybersecurity, Energy Security, and Emergency Response at
    the Department of Energy. I've also served in White House--I
    was a White House cyber official, a State Chief Information
    Security Officer, and a Chief Information Officer in the
    intelligence community.
        All that is to say I am not before you today as someone who
    can intensive IP legal analysis, but as a national security and
    cybersecurity professional who spent nearly two decades
    defending this country, often against the adversaries who are
    now racing to dominate the future of AI.
        The Chief among them is the Chinese Communist Party. Almost
    as a mirror image, as we sit here, just last week Xi Jinping
    presided over a Politburo study session on AI. Let me be clear:
    The People's Republic of China does not simply seek to compete
    with us; it seeks to overtake us. In doing so, it's not going
    to be through fair market competition. It's going to be doing
    so through theft, deception, and the systematic targeting of
    America's innovation base. The tactics used by the Chinese
    intelligence services and the State-backed actors include cyber
    intrusions, insider recruitment, deceptive investment
    strategies, and the use of academic partnerships as cover for
    espionage.
        This is not speculative. It is confirmed through multiple
    indictments by the Department of Justice and ongoing
    intelligence assessments from the Office of the Director of
    National Intelligence.
        The AI community, particularly companies building dual-use
    technologies, have become a top target. Yet, our national
    defenses remain inconsistent. We do not require minimum
    security baselines for companies building next-generation
    models. We do not vet outbound investments that may expose
    sensitive technology. We do not hold venture capital or private
    equity firms accountable for facilitating access to strategic
    industries by foreign adversaries. This must change.
        I support efforts to codify these outbound investment
    screenings, strengthen cyber requirements for federally funded
    tech firms, and require public disclosures when there's foreign
    ownership or influence in American AI companies.
        This is not about isolationism; it's about discipline,
    strategic clarity, and the courage to act before it's too late.
    During our previous years in the last administration, we took
    bold steps to harden our infrastructure and disrupt adversary
    operations. This results-driven approach, including offensive
    cyber operations, must be returned.
        I believe we have 2-5 years to close the most dangerous
    gaps. Beyond that, we risk losing our technological and
    strategic edge-possibly for good. AI is not just an economic
    issue; it's a national security issue and we must treat it
    accordingly.
        Thank you for the opportunity to speak today and I look
    forward to your questions.
        [The prepared statement of Mr. Andersen follows:]
        GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

        Mr. Issa. Thank you.
        We will now go back and forth between the majority and
    minority, beginning with the gentleman from Wisconsin.
        Mr. Fitzgerald. Thank you, Mr. Chair.
        Mr. Andersen, AI's infrastructure is not currently treated
    or identified as critical infrastructure for cybersecurity
    purposes. Should we rethink whether AI is actually critical
    infrastructure, and if so, what would that mean from a
    cybersecurity standpoint?
        Mr. Andersen. Thank you for your question.
        The short answer is yes. The longer answer is we have lots
    of technologies that we previously considered critical
    infrastructure designations, things like cloud computing and
    artificial intelligence companies that were previously not
    considered to be critical infrastructure. Doing so today would
    give us an opportunity to examine minimum cybersecurity
    requirements; would bring them into the fold for larger
    strategic planning, and lash them up with communities like
    DHS's CISA, the Cybersecurity and Information--excuse me--the
    Cybersecurity and Infrastructure Security Agency, to be able to
    engage in information-sharing operations. These types of things
    would help to underpin greater security in these critical
    infrastructure industries.
        Mr. Fitzgerald. Very good. Thank you.
        Mr. Mohr, the stakeholders raised concerns about
    difficulties in protecting trade secrets during litigation.
    What is the standard process for protecting trade secrets in
    court cases, specifically?
        Mr. Mohr. Well, typically, what happens is that there is a
    protective order, in other words, when the accused party has a
    right to defend themselves and they have a right to know, OK,
    what are they being accused of stealing? So, if it is a trade
    secret and it leaks out, for example, on a court docket, then
    the secrecy is gone and it's no longer valuable.
        So, what the judge will do is balance a number of factors,
    and typically, write an order that restricts access to the
    trade secret and makes sure that the information doesn't leak
    out into the public domain.
        Mr. Fitzgerald. Right. So, if the risk of trade secret
    leakage increases as the use of third-party litigation funding
    continues, especially like a patent case or other technology,
    what would be kind of the scope of the requirements in and
    around that?
        Mr. Mohr. Well, it--
        Mr. Fitzgerald. How do you protect yourself?
        Mr. Mohr. Well, the scope is really left to the discretion
    of the trial judge. From our point of view, the more
    information the trial judge has, the better an order that the
    judge is going to be able to write.
        So, for example, suppose you knew that one of the parties--
    let's take this: It's a third-party litigation-funded lawsuit.
    It is a party that is funded by the Chinese government. If
    you're the judge and you're crafting a protective order in that
    case, you would write a pretty--you'd probably write a much
    more severe one than if you thought it was just a couple of
    local dry cleaners fighting over a formula. That protective
    order might be very, very different.
        You might have, for example, personal liability for the
    attorneys, which has a way of focusing the mind, if any of the
    information were to leak out. There's a number of things. The
    judge can put protocols into how, in terms of how the
    information is used; how it's stored; under what circumstances;
    and who can see it, and how that access is logged, among other
    things.
        Mr. Fitzgerald. Very good. Thank you.
        Dr. Villasenor, why is trade secret protection important to
    AI development compared to just any other type of IP
    protection? I guess, specifically, many of us heard testimony
    this morning, between the United States and China as well. Why
    is that? Why is it important?
        Mr. Villasenor. Well, trade secrets are important across
    the spectrum of industries, but they are absolutely critical to
    AI. Because even in the case of--you might have heard these
    systems that are described as open systems, the open AI
    systems. There are still enormous amounts of trade secrets that
    go into that.
        In other words, if somebody releases the model weights, for
    example, as open, they wouldn't necessarily release how they
    trained those model weights and what the training aid that was
    used. They're not going to often release the source code.
        There's an enormous amount of trade secrets in AI, just
    like there are in other areas as well, but with AI, it's
    particularly complex, just because of the sheer size and
    magnitude of these systems is so large, that there's just more
    opportunity to build an incredible amount of trade secrets.
        Without trade secrets, we do not have the ability to
    maintain our AI leadership. That's what the investment is going
    into and that's what the companies are being valued for.
        Mr. Fitzgerald. I'm guessing, because China is so secretive
    in the way they have, the way they view this, that it makes it
    even more difficult when it comes to, specifically, seeing
    exactly what they're up to, is that correct?
        Mr. Villasenor. Well, the open system that we have here,
    where companies make their own choices about what to reveal and
    what to keep secret, is incredibly powerful. The proof is in
    the pudding. We are, unquestionably, the country with the
    leading AI ecosystem, and I don't think that's an accident.
        Mr. Fitzgerald. Thank you, Chair. I yield back.
        Mr. Issa. I thank the gentleman.
        We now recognize the Ranking Member of the Subcommittee,
    the gentleman from Georgia, for his opening--his questioning.
        Mr. Johnson. Thank you, Mr. Chair.
        Ms. Toner, the prospect of ceding American technological
    leadership to China is often used as an argument against
    implementing regulations of any kind on AI. Do you agree with
    that approach?
        Ms. Toner. No, I do not believe that we should say that the
    need to beat China necessarily means that we cannot regulate AI
    ourselves for several reasons.
        The first and most important reason is that regulation does
    not actually need to slow down our industry whatsoever. Well-
    designed regulation can actually even support industry. So, AI
    is an industry where there are huge problems with consumer
    trust right now. There's been some data showing that products
    that list that involve AI will actually be trusted less by
    consumers, because consumers are used to experiencing these
    hallucinations and reliability issues that we have with AI.
        So, I think there are ways in which, if you can use
    regulation to build consumer trust by making them know that
    they're going to be interacting with high quality products, and
    likewise, know that they are going to have recourse if
    something goes wrong; know that they are not just out there on
    their own, that actually can be very industry-boosting.
        So, that would be a primary reason that this is not a good
    argument. People making this argument that we can't regulate
    because we might then lose to China, also tend to neglect the
    pretty hefty regulations that China is enacting on its own AI
    ecosystem, and also, sometimes overestimate the quality of the
    training of the AI ecosystem, which is certainly competitive
    with the U.S., but not poised to overtake and run far away from
    us anytime soon.
        So, no, it's really important to protect our citizens, to
    uphold our democratic institutions and way of life, and also,
    to support the industry itself that we put in place--smart
    guardrails.
        Mr. Johnson. Uh-hum. What makes you so confident that China
    is not poised to overtake the United States in AI development?
    What are some of the ways that regulations can hurt the pace of
    innovation in America, AI innovation in America?
        Ms. Toner. Sure. I'll take the questions in reverse order.
        I think AI is a rapidly developing technology. If we were
    to go ahead and try and create regulations that were sort of a
    checklist of, if you're building AI, you have to do these 12
    steps that a government committee came up with, and then, they
    don't get changed and they don't get adapted. They're not
    responsive to specific cases.
        Regulations that really are very prescriptive and limit
    what companies can do or force them to use procedures that
    would not be competitive, that would not be productive. So, we
    should not be going that route.
        There are many other kinds of approaches. So, for example,
    looking at transparency and disclosure, that doesn't need to
    force you to build your systems in any particular way; simply
    share information about what you're doing.
        To your first question about Chinese competitiveness, this
    may be an area where I differ a little from some of the other
    witnesses present today. Honestly, the biggest advantage that
    the U.S. has right now is our access to compute, so
    computational power and advanced AI chips.
        The export controls, while they have been imperfectly
    applied and imperfectly enforced, they have been a huge
    success, or at least have the signs of being a huge success, if
    we carry out--if we continue to enforce them and keep them in
    place.
        One example of a signal for this is that the CEO of
    DeepSeek has made very clear that access to compute is the
    biggest limitation for him. So, the way that they were able to
    train the system that made such a splash was using a large
    number of chips that they imported in the gap between an
    October 2022 set of export controls, and then, they bought a
    bunch of chips throughout 2023. Then, in 2023, those chips were
    also restricted. So, they are now no longer able to buy the
    kind of chips that they used to train that system.
        So, the way that the export controls work is not just a
    matter of a few of them get slipped through? It's really a
    question of the volumes that we are able to produce outside of
    China.
        We need to also be looking at the semiconductor
    manufacturing equipment. That's a huge piece that often gets
    neglected. So, this is not just preventing of the chips
    themselves, but preventing the machines, the exquisite, very
    expensive machines that are produced in a very small number of
    countries that are U.S. allies. Preventing those--actually,
    enforcing the protections on those would also help protect the
    U.S. advantage.
        So, I'm happy to have a longer conversation about the
    export controls but I think that is a huge advantage right now.
        Mr. Johnson. Thank you. Dr. Villasenor, would you agree
    that not only AI transparency obligations implicate trade
    secrets?
        Mr. Villasenor. Yes. That's, that's true. There would be
    some that would not, but many would, and some that don't.
        Mr. Johnson. Is there a way to craft policies such that the
    disclosure requirements necessary for transparency can avoid
    touching on trade secrets?
        Mr. Villasenor. In general, it is possible, but it probably
    depends on the sector. AI spans all these sectors. So, the
    answer can be different depending on the specific sector.
        Mr. Johnson. Thank you. I'm out of time. I yield back.
        Mr. Issa. The gentleman yields back.
        We now go to the gentleman from Kentucky for his
    questioning.
        Mr. Massie. Thank you, Mr. Chair.
        Which of the witnesses is proposing that the government
    should take some kind of action? Raise your hand.
        [Show of hands.]
        Mr. Massie. OK. Ms. Toner, what is, what is the action that
    you think the government needs to take?
        Ms. Toner. So, I have several suggestions. Perhaps a top
    priority would be to expand the current voluntary
    collaborations that are being undertaken between national
    security parts of the U.S. Government and the U.S.'s leading AI
    companies.
        So, there's some early efforts right now. They include
    threat intelligence-sharing with the intelligence community.
    So, they are working hand-in-hand, in similar ways to how they
    do with critical infrastructure providers or our Defense
    Industrial Base, to ensure that, when there are incoming
    threats--and we do have State-based actors trying to infiltrate
    our U.S. companies--they are trying to find unclassified ways
    to ensure that the companies are aware and can prevent those
    threats and defend against them.
        There's also very valuable collaborative testing going on--
        Mr. Massie. Which direction is most important: The
    government sharing information with the companies or the
    companies sharing information with the government?
        Ms. Toner. They're both very important. Perhaps if I had to
    pick one, I'd say the government sharing information with the
    companies, but there has also been valuable threat reporting
    from the companies as well.
        There's also been within the Department of Commerce a
    dedicated institute, the AI Safety Institute, that has been,
    again, on a voluntary basis, working with some of these leading
    companies to test their new, most advanced systems. So, these
    are systems where the companies themselves say, ``We think they
    might soon be able to aid in the creation of bioweapons.'' They
    might soon be able to help not very sophisticated hackers hack
    into U.S. critical infrastructure. They might pose other
    threats. There are ways in which having access to classified
    information and classified expertise allows the government to
    actually help those companies do tests that they want to be
    doing anyway.
        Mr. Massie. Do you think the collaboration should be
    compulsory?
        Ms. Toner. No, most likely not. It should certainly be
    resourced, authorized, and expanded.
        Mr. Massie. Dr. Jensen?
        Mr. Jensen. I guess you were seeing in my eyes I'm more of
    the small government guy.
        We are seeing broad agreement on a number of things.
        Mr. Massie. You did raise your hand.
        Mr. Jensen. I did a little tipsy-tipsy.
        Mr. Massie. OK. Yes.
        Mr. Jensen. We do have--
        Mr. Massie. Which concerns me.
        [Laughter.]
        Mr. Jensen. Well, but--
        Mr. Massie. Just kidding.
        Mr. Jensen. We'll settle it over--
        Mr. Massie. I'm interested in your answer.
        Mr. Jensen. Yes. So, I would say this: You have broad
    agreement about the need to provide cybersecurity. Now, whether
    that's an incentive from the government, and then, there's some
    minimum viable standard that industry is held to, or whether
    there's more of a government can reach in and monitor
    everything from the employees to the company, to push someone--
    what becomes voluntary sharing becomes ``voluntold'' sharing.
        So, I would tend to think we agree on quite a bit here, but
    let's talk about that split difference. Because showing our
    differences is important for you all as a Committee.
        I would say I tend to think that smaller, lesser government
    is what's important, because that's what actually allowed these
    companies to grow, these companies to thrive.
        Now, we have to balance that against that you have a large
    predatory communist State that is directly targeting them. So,
    there's a question of, what is the Federal Government's
    national security obligation to protect U.S. persons and
    companies versus not overreaching with regulation to have them
    spending the marginal dollar to hire attorneys or to invest in
    some system that they're not spending in the lab trying to
    develop a new edge to the frontier model or some new component?
        That is a really hard balance to strike. I don't envy your
    job, but I'm glad you're all going to do it. Because it means
    the basic protections, that even the Federalist Papers we're
    talking about. It means thinking about, what does it looks like
    to declassify sensitive intelligence information, where we
    document this, so that it's admissible in our courts, or in
    courts in other free societies?
        So, what you're seeing is we broadly agree on the need to
    help companies help themselves with cybersecurity. We broadly
    agree that the Federal Government has a role. We might disagree
    with the extent of that role. Then, we also agree that these
    companies really are going to define our economic growth and
    prosperity into the coming century.
        Mr. Massie. I have another question. Probably, Dr.
    Villasenor, you might be the one to answer this. Are AI
    companies looking to use trade secrets because patents aren't
    necessarily conducive to protecting their Indo-Pacific?
        Mr. Villasenor. Well, it's a great question. There is a
    subset of innovations that could be protected either as trade
    secrets or patents, but trade secrets have a far broader scope.
    They can protect far more. There are plenty of things that are
    protectable by trade secrets. For example, long lists of files
    of source code; you can't just get a patent on a million lines
    of source code. That source code is certainly a trade secret.
        There's an enormous amount of intellectual property that is
    not protectable as a patent, but that is, nonetheless, vital to
    the value and value proposition and differentiation of the
    company.
        Mr. Massie. Isn't the biggest trade secret risk here is
    somebody just comes in and hires the employees?
        Mr. Villasenor. Well, I would hope that employees would
    respect their confidentiality obligations. It is certainly the
    case that we have had problems--there have been problems like
    that. That's one risk. There's hacking. There are many risks to
    trade secrets.
        Mr. Massie. Thank you.
        Thank you, Mr. Chair. I yield back.
        Mr. Issa. Thank you.
        We now go to the Ranking Member of the Full Committee, Mr.
    Raskin, for his questions.
        Mr. Raskin. Thanks, Mr. Chair.
        Continuing with you, Dr. Villasenor, many of the AI models
    incorporate open-source code, coding that's publicly available,
    into their models. How does this affect their ability to assert
    a trade secret claim?
        Mr. Villasenor. Well, it's a very good question. It depends
    in part on how they've incorporated these open-source sources,
    for example. It is certainly possible to have a system that has
    some component that was based on open source, but that also has
    a lot of intellectual property that's created independent of
    that, and there were be trade secret value in that and, for
    example, in how they integrate that with open source
    information.
        So, I wouldn't conclude, or I wouldn't believe that the
    presence or the use of open source would eviscerate trade
    secret rights for the companies that use it.
        Mr. Raskin. All right. Dr. Jensen, do you agree with that
    you can still maintain some kind of trade secret, some
    actionable trade secret claim, even if you've been using open-
    source code as part of your programming?
        Mr. Jensen. It's hard, and this is why, again, I want to
    stress that idea of going on with the offense. This is where it
    definitely gets outside the jurisdiction of this Committee and
    gets really into what's the rights of the Executive.
        You are going to have to find ways to potentially sabotage
    the most malicious offenders that you identify as linked to a
    foreign government going after you. Because you can protect it,
    he's right, with a larger trade secret, then, it becomes only a
    matter of time before they put the pieces together.
        If you have someone engaged in industrial-size, like
    generation-defining theft, you can't trust that person. So,
    where is the balance there of how you actually take other
    measures that are, again, outside this jurisdiction to start to
    hold those companies--countries accountable, and then,
    undermine it? That's the only way I think it's going to work.
        Mr. Raskin. OK. Ms. Toner, you've advocated for
    transparency requirements for developers of high-stakes AI
    systems, including transparency for training data, capability
    testing, safety testing, risk management, safety cases, and so
    on. What does transparency mean in this context? What is its
    purpose in these different areas?
        Ms. Toner. It's a great question. I would just clarify I
    would not necessarily advocate for transparency over training
    data, but the rest of the items that you listed, certainly.
        There's different purposes and different forms it can take.
    The simplest form of transparency is transparency to the
    public. This has a very broad range of benefits. It means that
    it's already transparent to governments, because governments
    can access anything that is public, but it also lets a broader
    set of academics, experts, employees of companies who might be
    affected--it just really empowers the public to understand the
    stakes of this technology and how the technology is changing
    over time, which I think is important, given that it is going
    to affect all our lives very profoundly and perhaps in sudden
    and unexpected ways.
        A different kind of transparency is transparency to
    government. So, there's some information that maybe is not
    suited to be public. Maybe we want to keep them protected.
        Mr. Raskin. Uh-hum.
        Ms. Toner. That could particularly be relevant for national
    security-relevant information. So, for example, a big area of
    concern right now is the potential cybersecurity capabilities
    of the most advanced models, whether they're going to make
    critical infrastructure systems more vulnerable than they have
    been in the past. Maybe that's not something that we want
    disclosed publicly immediately, but it is an area where
    partnership with government makes sense.
        A third form of transparency, which is maybe transparency,
    is not quite the right word, but it's important to also think
    about the ability to bring in independent third parties into
    these companies and provide independent oversight or
    independent verification of some high-stake claims they're
    making. So, if they are saying that they are running certain
    kinds of tests, that they're performing certain kinds of safety
    protocols, can you bring in a third party under an NDA to work
    inside the company's own facilities? That might allow you to
    get a little bit of additional independent verification, so
    you're not just taking the company's word for everything for
    these high-stake claims they're making.
        Mr. Raskin. Great. Thank you.
        Dr. Jensen, The Washington Post reported that tech
    companies, or some tech companies are telling their employees
    on visas not to leave the United States, out of concern that
    they won't be readmitted to the country or they could be
    stopped at the border. Visa holders are, obviously, running a
    lot of tech companies. They're working at startups. They're key
    in the field. Seventy percent of graduate students in AI-
    related fields are believed to be international students.
        So, if the Trump Administration begins to deny H-1B visas,
    as he did in the first term, what will the consequences be on
    American AI innovation and on these businesses?
        Mr. Jensen. Well, I'll start with this combat veteran. It
    will cut my lab in half. Literally, the three people I employ,
    I would cut it to four people, counting me, total--I would lose
    two of them. I'm a microcosm compared to the size and scale of
    how those could ripple through the American ecosystem.
        That doesn't mean that we don't have the right, and the
    Executive doesn't have the right to determine how best we seal
    our borders and determine very complex immigration questions,
    but we have to have a really hard conversation, as a Nation,
    about what really is the major competition of the 21st century.
        If it truly is AI, and AI becomes the focal point of grand
    strategy, that means immigration discussions have to be taken
    as part of that, and we're going to have to find some areas of
    bipartisan agreement or compromise. Then, we're going to have
    to really double-down in investment in STEM education, which is
    going to even take longer, and we have to figure out how it
    works.
        Now, I'd just say one note quick about transparency to
    double-down. There's a really interesting point of
    transparency. So, in my lab, we do benchmarking. You're going
    to need almost a Tocquevillian civil society function where,
    whether it just naturally happens or it's incentivized by the
    people's house, independent groups--not government, not
    business--come together and hold company models accountable.
        So, in our case, we actually do the hard work to say, when
    a DeepSeek or a Gemini responds with escalatory responses on a
    dataset trained on standard international relations and foreign
    policy decisionmaking, that's just one example.
        So, it's not just transparency in the ways we've discussed.
    It's also let's get creative and think about all American
    society, and what are the ways civil society can be
    incentivized to organize organically from below and provide
    checks on us? Because I don't think benchmarking can just be
    the government; that will lead to overreach. It can't just be
    companies because that will lead to kind of skirting claims.
    There's just--there's perverse incentives for either the
    government or just firms. So, transparency needs to also
    include civil society and us thinking about, what does that
    benchmarking look like, conducted through voluntary American
    associations?
        Mr. Raskin. I appreciate that. I yield back, Mr. Chair.
        Mr. Issa. That was a great round of questioning. I
    appreciate it. I appreciate your answer on broadening
    transparency.
        With that, we go to the gentleman from South Carolina, Mr.
    Fry.
        Mr. Fry. Thank you, Mr. Chair. Dr. Jensen, to continue with
    you, you would agree that AI is one of our most critical tools
    in strengthening national defense?
        Mr. Jensen. One hundred percent.
        Mr. Fry. In that same vein, would that translate, if we
    were a leader in that, would that translate to superiority for
    our defense capabilities and our warfighters on the
    battlefield?
        Mr. Jensen. A great question and I can tell you honestly.
    So, as the chair at Marine Corps University for the last 2\1/2\
    years, we've been experimenting with how could you use AI to
    help marines plan better. So, no more eating crayons. Time to
    actually get down with the code.
        Frankly, we found tremendous strides. This is actually why
    it's a complex answer to this. It's not just a function of the
    engineering; it's how you actually change professional military
    education and training to make officers and enlisted personnel
    understand that technology and to know how to ask the right
    question.
        What makes us the best fighting force is that we care about
    our people. We invest in them. We challenge them. We pull them
    from all ranks of our society.
        In an era of AI, that also means ensuring they have the
    requisite technical education, and we've given them the ability
    to work with algorithms to augment military decisionmaking.
        So, it won't just be enough to be an AI superpower and to
    give a trillion dollars to one company to give us widgets. It's
    going to be the harder investments we make in our people, how
    we change our training pipelines, and how we simulate future
    battles.
        Mr. Fry. So, to what extent do you think that Chinese
    espionage is undermining our national defense capabilities in
    the space of AI?
        Mr. Jensen. Yes. Daily, if not every second. Remember, they
    have proven that you can mass steal your way into the 21st
    century through intellectual property theft, both with hackers,
    but also, we heard about it today: These third-party purchases
    of firms, through insider recruitment. They've got a deep,
    well-established play book.

        (1) That changes our cost to innovate. Every secret they
    steal changes the marginal cost for the next innovation. It's
    cheaper for them, more expensive for us.
        (2) It also gives them sensitive data on how best to defeat
    our systems. So, this is why we have to probably come up with
    entirely new concepts of how we secure data and how we secure
    training data. Because the worst thing we would want is they
    actually steal every experiment we've done with AI in a
    military training setting and, actually, statistically analyze
    our patterns.

        Most people, when they're fighting, have tells. Boxers know
    this, but it's true at larger-order combat formations. We all
    have patterns, and if you can see the enemy's pattern, you can
    conduct a spoiling attack or some maneuver to offset it. We
    have to make sure they can't use our patterns through seeing us
    in that technology to exploit in the battlefield.
        Mr. Fry. Well, how do we do that? In dealing with espionage
    of trade secrets--
        Mr. Jensen. Yes.
        Mr. Fry. --what kind of protection do you think would be
    most important toward that kind of incursion by the CCP?
        Mr. Jensen. This is where the lawyers--don't get mad if I
    say this.
        [Laughter.]
        Mr. Jensen. I'm going to put my warfighting hat on.
        First, we probably have to get really creative with almost
    creating entire digital terracotta armies. Why shouldn't it be
    that every U.S. military personnel isn't in three to four
    places simultaneously, only one of which is real? So, your
    adversary, even if they can see you in a transparent global
    competition, doesn't know what's real.
        It means we're probably also going to have to get pretty
    aggressive with data poisoning, knowing full well that there's
    real risk of that blowing back on us, given how these models
    are trained.
        These are really the core counterintelligence and
    operational security questions of the 21st century. That
    doubles back to, if you don't train your intelligence community
    and your warfighter how to answer these questions, we're never
    going to develop policies in the military, and then, we're
    going to have generals testifying before you who don't know
    what they're talking about. Now, we can do better than that and
    our military will do better than that, but it requires that
    technical training, that pipeline, that space to experiment.
        Mr. Fry. Thank you for that.
        Ms. Toner, can you briefly explain China's Thousand Talents
    Program? Does it specifically target U.S. scientists and AI
    professionals?
        Ms. Toner. So, the Thousand Talents Plan is only one of
    many, a very large number of talent plans that China uses to
    try and recruit talent in critical industries. They certainly
    target AI with the Thousand Talents Plan and other plans, and
    they're certainly making the most of the current
    administration's effects on U.S. immigrants in the United
    States.
        So, there's a lot of interest among people who are
    currently here in visas, in whether their future in the U.S. is
    secure. You can bet that China is making the most of that, both
    with plans like Thousand Talents and, also, offering lots of
    resources for research--great, cushy jobs. They're, they're
    certainly stepping in there.
        Mr. Fry. Do you think that those recruitment efforts have
    led to the leakage, if you will, of trade secrets or sensitive
    technologies from the United States and other Western
    countries?
        Ms. Toner. Certainly, in the AI industry broadly, as has
    already been mentioned, one of the biggest sources of trade
    secrets being leaked is simply employees moving from one
    company to another. This happens inside Silicon Valley between
    Google and OpenAI, and other similar companies. Certainly, if
    you're able to hire employees from those companies and get them
    to cover over to China, that's going to have the same effect.
        Mr. Fry. What can we do to close that security gap, just
    briefly? I know my time is expired, but I wanted to get to
    that.
        Ms. Toner. One piece here would be, for people who are
    doing it intentionally and are doing it maliciously, that is
    where some of my recommendations around personnel vetting could
    come in. It's very important that this not become a broader
    anti-immigrant sentiment, though. Because, as Dr. Jensen has
    already laid out, the contributions of foreign nationals to
    U.S. AI competitiveness are immense.
        Mr. Fry. Thank you for that.
        Mr. Chair, I yield back.
        Mr. Issa. I thank the gentleman. We now go to the
    gentlelady from North Carolina, Ms. Ross.
        Ms. Ross. Thank you, Mr. Chair and Ranking Member, for
    holding this hearing.
        I apologize for being a little late, but we had a hearing
    on quantum computing that raised many of these same issues.
        Mr. Issa. The best part is you arrived just in the nick of
    time.
        Ms. Ross. Yes, there you go. Anyway, Dr. Jensen, DeepSeek's
    rapid AI advancements have sparked debate. I wanted to know
    whether you think they are driven by local innovation or
    replication or theft of American research. Where do you think
    they come from?
        Mr. Jensen. It's straight-up stealing. We can give
    different verbs to describe theft, but it's how they did it
    that's important for us to provide the right type of
    protection.
        So again, the idea is, if I'm going to, basically, do these
    attacks where I exploit your ability to pull data and ask a
    question to one model, to shorten the amount of time and the
    amount of computational cost to train my model, it's at minimum
    a legal gray area, but I really do think it's that. I defer to
    the legal experts on that.
        What's more important about DeepSeek to take stock of is I
    think stealing in the 21st century, as awful as it is still
    subject to diminishing returns, and why we can still win and
    will continue to.
        I say that because of our benchmarking study, we tested
    DeepSeek. DeepSeek was actually prone toward escalatory
    responses in a foreign policy scenario, so 66,000 unique
    question-and-answer pairs and 400 scenarios. Even worse, it was
    horribly biased against the U.S. and the U.K. Now, you might
    say that's a mirror into Chinese Communist Party leadership,
    but any mirror like that has a bias, is actually a weakness we
    can exploit over time.
        So, that's why benchmarking becomes so important. Because
    you want to understand the tendencies in these models, and
    then, an open society with an open market, there will be
    commercial incentives to update those models. Whereas, a closed
    society excels only at lying to itself, and that's actually
    going to put them in a strategic deficit.
        Ms. Ross. Thank you.
        Ms. Toner. Can I comment on that as well?
        Ms. Ross. Oh, absolutely.
        Ms. Toner. Yes, I apologize, but just to respectfully
    disagree with the assessment of what DeepSeek did here. I think
    it's really important.
        There has been plenty of overstating of the sophistication
    of what they did and how advanced their AI system is, but it
    doesn't help us to understate it, either. It's important to
    describe what it is believed that they did in terms of
    distillation, which is the technique they used.
        This is a very common technique that a lot of U.S. AI
    developers will use as well. Essentially, it's using a more
    advanced AI model to get some answers and to use that as part
    of your training data.
        I don't have any inside information. We'd have to look at
    the internal investigation OpenAI is running. What's available
    externally suggests that they have just done a pretty regular
    standard practice procedure as one small part of their overall
    process for building this model.
        It's important that we not underestimate the level of
    engineering sophistication and research that they did bring.
    They were genuinely innovating here, in addition to making some
    use of OpenAI's models, I believe, according to evidence we
    have--again, in a way that I think is a legal gray area is
    correct, a legal gray area and very commonly done by many U.S.
    AI developers as well.
        Ms. Ross. Thank you for that addition.
        Back to you, Dr. Jensen. Drawing from your analysis of
    technology diffusion, what indicators, patent citations, talent
    flows from U.S. labs, or code-based similarities would signal
    reliance on external knowledge versus organic R&D in China?
        Mr. Jensen. So, I love this question because you're getting
    at the heart of what does it means to be an AI superpower, and
    how would you measure it? Then, how could you, as elected
    officials, look at those measures and determine the right mix
    of legislation, or even the right type of budget allocations to
    go forward with.
        A few stand out, even before whether it's externally or
    internally driven.
        First, triad patents, absolutely, are always going to be a
    key one.
        Second, even though we can't necessarily always draw a
    direct link, even if there's a correlation, I do think STEM
    education is critical, as well as basic research investments.
        There are certain categories of research, frankly, that
    it's just not commercially viable for companies to invest in.
    In fact, most of our more interesting technological
    developments, really in the kind of post-World War II, Vannevar
    Bush moment, come from our willingness to take risks and basic
    research on universities, and then, finding the right type of--
    whether it's protecting it with patents, but then, also,
    commercial incentives for those researchers, and then,
    entrepreneurs to roll those out.
        So, one of the real measures will be those things, in my
    opinion, and then, you'll know if it's really coming up.
    There's only so much of that you can steal.
        Ms. Ross. So, we just came--I just came from the Science
    Committee, and we are actually seeing NSF grants being canceled
    if they have, quote, ``DEI connection,'' which, to me, is a way
    of canceling investment in talent in underserved communities,
    because we have talent everywhere in the United States. Could
    you comment on that?
        Mr. Jensen. Sure.
        Mr. Issa. Briefly, if you would, please?
        Mr. Jensen. Yes, I'll be very quick.
        For me, first, it starts with basic research. True DEI in
    this case means we just really want good researchers, and
    you're right, they come from everywhere.
        The debate here would be whether trying to preface certain
    communities inadvertently undermines the commitment to treating
    everybody by the content of their character, not by the color
    of their skin.
        My first priority would be increasing that basic research
    investment, and then, figuring out how we make sure we have
    research ecosystems that are distributed across America, so we
    can find all that talent where it is.
        Ms. Ross. Thank you. I yield back. Thank you for your
    indulgence.
        Mr. Issa. I thank the gentlelady. No problem.
        We now go to the gentleman from Virginia for five minutes.
        Mr. Cline. Thank you, Mr. Chair.
        Mr. Andersen, trade secrets are often described as one of
    the most important tools for fostering innovation. In your
    view, how critical is the protection of trade secrets for the
    continued advancement of AI technologies, particularly in the
    context of U.S. companies trying to stay competitive with
    foreign players like China?
        Mr. Andersen. I believe it's exceedingly critical. Being
    able to safeguard the secret sauce, if you will, of how we're
    going about our business is exceedingly important.
        I'm as antiregulation as I probably can be, but, when I
    left home and deployed to Iraq and left the wire to go out on
    patrol, I didn't look at having to put on a flak jacket and
    Kevlar and be conditioned with my rifle as an overly burdensome
    regulation. I looked at it as a recognition of the operating
    environment that I was in. Engaging in both good cybersecurity
    practices and being able to protect trade secrets is
    exceedingly important to maintaining our edge.
        Mr. Cline. Given China's rapid advancement in AI, what
    steps should the United States take to protect its AI
    innovations from theft or exploitation by foreign adversaries,
    especially considering the open AI ecosystem that may
    facilitate such activities?
        Mr. Andersen. So, first and foremost, it's engaging in
    good, good cybersecurity hygiene. I brought this up very
    briefly with regard to the earlier question about critical
    infrastructure. Our technology companies, whether it's an AI
    company or cloud computing companies or some of the more
    generic developers in the market, are critical infrastructure.
    Moreover, the information that they're producing today is
    critical to both our economic success and our national
    security.
        So, good, basic cybersecurity hygiene, whether it's looking
    at CMMC and what we're doing with the Defense Industrial Base,
    or how it would apply within this industry segment, personnel
    screening and vetting, and again, outbound investment
    screening, making sure we're not, unwittingly or wittingly,
    investing in a way that's going to harm U.S. national security
    interests is critically important.
        Mr. Cline. As Congress considers AI transparency
    legislation, how do we strike the right balance between
    disclosing enough to ensure AI systems are safe and
    understandable without undermining the incentives for American
    companies to keep innovating?
        Mr. Andersen. So, that's exceeding tough to do, to the
    requirement for disclosure versus, again, keeping sort of your
    secrets in-house. In my mind, you have to develop sort of
    redline thresholds of what information is important and what
    information needs to be disclosed, in particular, focused on
    those critical technology security areas that we've identified
    as high-risk. So, in my mind, it's about bounding things in
    that appropriate way, not necessarily asking for a full
    disclosure and full openness in a way that would degrade
    competitiveness within the environment.
        Mr. Cline. Are there lessons that you've learned from your
    experience in cybersecurity risk management that could inform
    disclosure frameworks that would be created for AI systems
    without compromising proprietary data?
        Mr. Andersen. Well, I think you--if you look at legislation
    that's existed for the past decade, things like CISA 2015,
    which has allowed for private industry to be able to share more
    openly with the government and participate in threat
    intelligence information-sharing, that's a good model.
        Mr. Cline. Now, that's up for renewal this year. Would you
    make any adjustments or changes or--
        Mr. Andersen. There are always opportunities for
    improvement, but I would certainly support its reauthorization,
    just to be completely honest, just because I don't want to have
    one more opportunity for a company's general counsel to whine
    to me about liability protection issues. Anything we can do to
    continue to encourage the private sector to share information
    is fantastic.
        Mr. Cline. Any other panelists want to comment on the
    reauthorization of CISA 2015 that is coming up this year? OK.
    Anyone?
        [No response.]
        Mr. Cline. All right. Mr. Mohr, from the software
    industry's perspective, what trade secret protections are most
    critical to ensuring that American AI companies can continue to
    innovate without fearing intellectual property theft,
    especially by State-backed actors?
        Mr. Mohr. Thank you for the question.
        There are several areas where the trade secret doctrine can
    apply. It can apply to the algorithm itself. Professor
    Villasenor raised a very interesting, a really interesting
    point, for example, about how, if, for example, one of these
    algorithms were found not to be covered by the trade secret
    doctrine, because nobody understands it, basically, a black
    box, but it's something that was kept secret and kept for
    commercial advantage--that would be a legislative gap. That
    would be a problem.
        It can apply to the algorithm; it can apply to the training
    data; it can apply to perhaps a specific configuration of the
    chips used, any number of pieces of the puzzle.
        Mr. Cline. Thank you. I yield back.
        Mr. Issa. I thank the gentleman.
        Mr. Andersen, if I can briefly just ask one question. You
    noted you are going over the wire, through the wire, and
    wearing your armor. Isn't it true that not everyone wears the
    same amount of armor, and that in some cases, if you wear every
    piece that they manufacture, you won't be able to move
    sufficiently fast to accomplish the mission?
        Mr. Andersen. Yes, sir, that's absolutely true. I couldn't
    say, just because I'm going into potential armed engagements in
    Fallujah, that somebody who's a police officer here in D.C.
    should be walking around with the same amount of body armor.
    There's still a potential threat engagement there, but the
    operating environments are different. The requirements need to
    be tailored to what, specifically, is going to be useful both
    for the operating conditions and the risk.
        Mr. Issa. I thank the gentleman.
        The gentlelady from California is recognized for five
    minutes.
        Ms. Kamlager-Dove. Thank you, Mr. Chair, and I want to
    thank the Ranking Member.
        This was a really interesting discussion. For me, it
    remains abstract if we're also not talking about the available
    human capital and the talent investment that is needed.
        I have a young person getting ready to go to college. I
    have been talking to college students. I have actually been
    talking to a lot of engineers in this space who are worried
    about their prospects for employment and, also, their ability
    to stay here and to contribute to building our edge in AI.
        Mr. Chair, I would like to submit for the record a January
    14, 2025, White House AI Talent Report.
        Mr. Issa. Without objection, so ordered.
        Ms. Kamlager-Dove. It warns that international researchers
    may increasingly choose to work in countries like Canada or the
    U.K. due to visa uncertainty. We know that nearly 50 percent of
    noncitizen AI Ph.D.s face immigration challenges, and many are
    unsure if they will even remain here.
        So, Ms. Toner, if we continue to make it harder for top
    talent to stay, what are the strategic risks to U.S. innovation
    and our ability to protect those innovations through trade
    secrets?
        Ms. Toner. The biggest thing I would say is that talent is
    a huge, asymmetric advantage for the United States. We're in
    systemic competition with China and in different elements. We
    have different levels of advantage. The ability to attract the
    world's best and brightest is one of our very biggest and most
    asymmetric advantages over China.
        They are graduating more and more Ph.D. students, master's
    students, and specialty students. They are vastly outstripping
    our ability to train domestic talent because their population
    is larger. If we're just using domestic talent, even if we
    should, obviously, be improving our K-12 education system, our
    high education system, but we can do that all we want; if we
    only use domestic talent, we cannot match them.
        We're very fortunate, the number of people, the number of
    really brilliant researchers and engineers who want to come to
    the United States, if we'll only let them.
        I would say, we look at the way that affects the U.S. AI
    ecosystem. Two-thirds of the top AI startups had an immigrant
    founder. More than half of the AI talent at the Ph.D. level in
    the United States is foreign-born. This is a big part of our
    ecosystem. We should treasure it. We should value it. We should
    let those people come and let them stay.
        Ms. Kamlager-Dove. Thank you so much.
        Unrelated, I was having discussions with folks in my
    district about breast cancer research and finding cures. The
    folks that were actually at the center are immigrants. I just
    kept thinking to myself, OK, and now, we're demonizing this
    group of people that's actually working to try to figure out
    ways to save lives.
        Even Dr. Jensen just said that good researchers comes from
    everywhere. They may come from everywhere. We want them to come
    here, and by golly, we want to stay here. Because we want to
    have the edge.
        We cannot protect our edge in AI and cybersecurity,
    actually, without investing in the people and the institutions
    that are building the edge. I'm talking about colleges and
    universities that feel like they are under attack--the faculty,
    the curriculum, the prospective students, and the students that
    are there right now.
        Given that between 40-60 percent of AI-related master's
    degrees and nearly 60 percent of AI Ph.D.s have gone to non-
    U.S. citizens in recent years, I'm going to say to you,
    Professor Villasenor, what are the long-term risks to U.S.
    innovation if we keep pushing out the very talent that is being
    used to build this field?
        Mr. Villasenor. I think the risks are enormous. I think we
    are leaders in AI in large part because of our human capital.
    As has been said by multiple people here, our human capital is
    people who are at least half, and probably a lot more, from
    overseas. We need to make sure to create a climate where they
    feel that they can stay here and start their businesses here.
    Because the businesses they start are going to be the ones that
    employ 100, 1,000, or 10,000 people in the future. They're
    going to start those businesses somewhere and we want it to be
    here.
        Ms. Kamlager-Dove. Thank you for that.
        As I mentioned, I know we are talking about cybersecurity
    and cyber threats. I'm also thinking about all the other ways
    where AI can play a positive and constructive part in how we
    are coming up with solutions; how we are protecting our people;
    how we are enhancing our national security.
        What should be most important is what folks bring to the
    table rather than what they look like or where they were born.
    I don't think a solution cares too much about the person who
    came up with it. We're interested in how we can build our
    competitive edge; how we can protect the folks in our country;
    how we can create more jobs; how we can create an ecosystem
    that is both safe and sustainable--right? Economically and
    politically, from a national security standpoint.
        I'm just saying this because I'm talking to all the young
    people who are graduating, who want to play a role in how we
    are finding solutions for all these issues, and they are
    scared. We don't want folks to be scared. We want folks to feel
    hopeful and engaged, and like they're able to work with their
    country on addressing some of these solutions.
        With that, Mr. Chair, I yield back.
        Mr. Issa. I thank the gentlelady.
        I would only opine that you may be making a case for us to
    bring back up the H-1B reform, so that we are, in fact,
    recruiting and retaining the best and the brightest, as you
    noted.
        With that, we will not go to that, gentlemen. I guess it
    boils down to me now. I will recognize myself for a series of
    questions.
        One of the questions I have is--I will followup on the
    recruit and retain. It was opined by people on both sides of
    the dais that we may be losing good people under current
    policy.
        For all of you, isn't one of the loopholes in our system
    that the massive amount of people who are training on AI,
    getting their degrees in AI, they go back to China? Isn't that
    effectively--the people at your university, you include Chinese
    exchange students who will train on AI, will be advanced by
    looking at what we're doing, and then, they will, whether they
    want to remain or not, be forced to return to China? Isn't that
    a practical reality today?
        Ms. Toner. So, in fact, this is a great question and an
    important question, and it's one that colleagues of mine at
    CSET at Georgetown have done great work on.
        Actually, if you look at the numbers, specifically, in AI
    and, specifically, for Chinese immigrants, and you look at how,
    what percentage of those researchers are staying over five
    years, over 10 years, the numbers are North of 85 percent. So,
    there's actually a very, very large fraction who do stay in the
    country.
        Mr. Issa. Yes, but under the current, under the current
    law--
        Ms. Toner. Yes.
        Mr. Issa. --they are circumventing their original presence
    to do it. They are marrying an American. They are applying for
    this visa or that visa.
        Yes, many people who come here who are the best and the
    brightest remain, but they don't come under a status that
    guarantees they remain. They take an undergraduate degree, then
    a graduate degree, then a work program, and then another
    graduate degree. We all know that there are ways to stay here
    for a long period of time, and eight years is a blink in the
    back-and-forth at university.
        The question is: How many people come here and have a
    reasonable expectation that they can remain here permanently,
    and thus, make the plans that might lead to loyalty? That would
    be a different question.
        I have two service members here. Are you both current?
    Reservists? You're not?
        Were you an officer, Mr. Andersen?
        Mr. Andersen. I was not.
        Mr. Issa. You are enlisted. So, I'm going to make one
    assumption.
        Dr. Jensen, you currently hold at least a Secret security
    clearance, don't you?
        Mr. Jensen. That's true, Chair.
        Mr. Issa. OK. How many other people here hold security
    clearances today?
        [Nonverbal response.]
        Mr. Issa. OK. For your security clearances, was there a
    background check?
        Mr. Jensen. Yes, and now, we're also subject to what's
    called continuous monitoring evaluation.
        Mr. Issa. As a result, one of the questions in that
    background is, are you susceptible to, in fact, being leveraged
    by a foreign power? Isn't one of the greatest foreign power
    leverages having family in a foreign Nation, particularly a
    hostile one?
        So, isn't one of the questions that has--the genie that we
    have to let out of the bottle is, one of our challenges, by
    definition, is whether--you said you had two out of the four.
    If they are from China and their family is in China, they are
    subject to potentially being leveraged through their family. If
    they are from China, and for the 6, 8, 10, or 12 years, every
    day of their lives, they are potentially susceptible to being
    taken back to China. They are less likely to be reliable from a
    standpoint of keeping secrets secret.
        Ms. Toner, wouldn't you even agree with that?
        Ms. Toner. That is true and a concern for, I would say, a
    small fraction of the people in question here.
        Mr. Issa. We only need one to give away the secrets and the
    next bomb will not be stopped on its way in.
        One of the questions that I have here today is, there's
    been a lot of discussion about, basically, foreign policy,
    immigration, and so on. From a standpoint of keeping our edge,
    tariffs will not keep our edge in AI, is that correct?
        Mr. Jensen. I think that's correct.
        Mr. Issa. Ms. Toner, one of the areas that you opined on
    positively was that our export controls have helped us keep
    that edge, correct?
        Ms. Toner. Yes, sir.
        Mr. Issa. When we talked about cooperation, the very chips
    that we have export controls on trying to keep from leaving,
    every company that we want to have work in a collaborative way
    with our government to help keep secrets secret, to help have
    the level of cybersecurity, every one of them pretty much uses
    those chips, right?
        Ms. Toner. Yes, sir.
        Mr. Issa. Maybe we can have a sense of consensus here for a
    moment. Isn't it fair to say that, although we want it to be
    cooperative, we want it to be voluntary, access to those very
    powerful chips that we will not let our enemies have, in fact,
    creates a bargain in which you really must work with the
    government to make sure that you are safeguarding the fruit of
    those very powerful chips. Is that fair to say?
        OK. Seeing no disagreement, I will say we have gotten that.
        I'm going to--this is one of those times in which I don't
    want to abuse the opportunity. The Ranking Member is going to
    let me have an extra minute or two.
        I just want to close with a question that, hopefully, sets
    it up. This hearing was primarily about our current edge, where
    it is, and what we should do. There will be a lot of questions,
    both from Members who couldn't be here--myself, I couldn't be
    at the Science Committee. I'm going to be asking them a lot of
    questions on quantum.
        Isn't one of the most important things we should be doing--
    and I want to bring together both sides and their questions; we
    should be figuring out how to recruit and retain from the
    entire world the best and the brightest, and create an
    environment in which they are safe and secure from being moved
    out of the United States. That we have the first step in
    developing the best technology, and then, continue in every way
    possible to make sure that those who are our enemies will not,
    in fact, use the fruit of that to their benefit; i.e., China?
    Is that all a consensus?
        [No response.]
        Mr. Issa. The last one is, Dr. Jensen, you touched on one
    thing, and I just want to make sure I understood it. It is sort
    of a technical question.
        This whole question of diffusion--we all understand that
    today's AI, various AI models, are being offered in some cases
    free as a service. What you alluded to that is part of
    DeepSeek--Ms. Toner, I'm sure you saw it, too--if we allow
    models to be used as a service, and if they can be a service to
    people outside of the country nefariously trying to get ahead
    of us, then don't we, in fact, provide the very need that we
    are trying to deny when we hold back chips?
        Either one of you.
        Mr. Jensen. Yes, I'll just start, Chair, by saying, yes,
    but this is where it gets precarious, right? So, the thing,
    again, I was talking about was the unbounded consumption
    attack, so how to manipulate the API beyond just the knowledge
    distillation. Even if that is just a legal gray area, and U.S.
    people exploit it, it doesn't make it right.
        So now, the question becomes, how do you make sure that
    this technology proliferates? Because everyone has talked
    about, whether it's breast cancer, weather, the really
    interesting next innovations are second order. It's how people
    begin to employ these models to solve other problems, and you
    don't want to limit that. At the same time, you want to limit
    its abuse.
        This is why you need to really go on the offense, and why I
    want to be brutally clear when I say that. That means finding a
    way for sensitive intelligence to be declassified, to then
    differentiate between what's natural business competition and
    what's actually nefarious, and then, begin to make it
    admissible in not just the U.S., but also in multiple other
    free societies. It starts to create a compounding effect.
        Even in the more extreme case, that's when you turn it over
    to a Presidential finding and you actually talk about what you
    might sabotage digitally overseas.
        Mr. Issa. Ms. Toner, you had a closing statement?
        Ms. Toner. Yes. To build on that, a really important
    element here that often is not discussed as much as it should,
    is how these companies are monitoring the use of their systems.
    It's not just a question of testing them in advance or the
    cybersecurities at the companies themselves, which are very
    important. If you're going to make your products available to
    users, which is important for their business models; it's
    important for us to benefit from them, how are they detecting
    when they're being used improperly?
        Different leading AI companies have different practices
    around monitoring different quality. I would certainly
    encourage you in your oversight role to discuss with the
    leading AI companies on how they are monitoring their systems
    being used.
        I believe that OpenAI is currently investigating whether
    Deep-Seek used their systems inappropriately, and if so, how?
    How do they detect that? What are they logging? What systems,
    automated and human-based, do they have in place to tell when
    those improper uses are occurring?
        Mr. Issa. Thank you.
        Having no further questions from the dais currently, I
    would bring this to a close by saying that, for the next five
    legislative days, we will allow Members to ask additional
    questions. Would you all agree to respond to those in writing?
        Then, just to make sure I don't miss anything on the
    close--nope.
        Without objection, this hearing is adjourned.
        [Whereupon, at 11:44 a.m., the Subcommittee was adjourned.]

        All materials submitted for the record by Members of the
    Subcommittee on Courts, Intellectual Property, and the Internet
    can
    be found at: https://docs.house.gov/Committee/Calendar/ByEvent
    .aspx?EventID=118204.