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Intro  0:01  

Welcome to the She Said Privacy, He Said Security Podcast. Like any good marriage, we will debate, evaluate, and sometimes quarrel about how privacy and security impact business in the 21st century.

Jodi Daniels  0:22  

Hi, Jodi Daniels here. I’m the Founder and CEO of Red Clover Advisors, a certified women’s privacy consultancy. I’m a privacy consultant and Certified Information Privacy professional, providing practical privacy advice to overwhelmed companies. Hi,

Justin Daniels  0:36  

Justin Daniels here. I am a corporate M&A shareholder at the law firm Baker Donaldson, I am passionate about helping companies solve complex cyber and privacy challenges during the lifecycle of their business. I am the cyber quarterback helping clients design and implement cyber plans as well as help them manage and recover from data breaches. And this

Jodi Daniels  0:59  

episode is brought to you by Red Clover Advisors. We help companies to comply with data privacy laws and establish customer trust so that they can grow and nurture integrity. We work with companies in a variety of fields, including technology, e-commerce, professional services, and digital media. In short, we use data privacy to transform the way companies do business. Together, we’re creating a future where there’s greater trust between companies and consumers to learn more and to check out our new best-selling book, data reimagined building trust one bite at a time, visit red clover Excited for a fun lively discussion today. Yeah, I think

Justin Daniels  1:42  

you’re really talking to some interesting people. And just so much going on in the space these days with AI and different more state privacy laws. There’s just never a dull moment in this industry.

Jodi Daniels  1:53  

Sure, we could just do our podcasts full time and forget our day job.

Justin Daniels  1:55  

Yes, we could but gotta pay the bills. Do you have to pay

Jodi Daniels  1:59  

the bills? Okay, so today, we have Jim Dempsey, who is a lecturer at the UC Berkeley School of Law and a senior policy adviser to the program on geopolitics, technology and governance at Stanford. He is author of Cybersecurity Law Fundamentals, which was published by IPP in 2021. And we are so excited, Jim, that you’re here to talk with us today.

Jim Dempsey  2:22  

Thanks, Jody. Delighted to delighted to be with you. Alright,

Justin Daniels  2:25  

I’m delighted to be with you too. Delighted

Jodi Daniels  2:27  

to be with me. Oh, that’s so nice.

Justin Daniels  2:29  

I might rephrase that a couple hours. Okay. All right.

So, Jim, can you talk to us a little bit about how your career has evolved to your current

Jim Dempsey  2:41  

role? Well, Justin, like you, I’m a lawyer. So I always emphasize I do Technology Policy. I don’t do technology. For a lot of my career, I After a stint at a law firm, clerkship and stint at a law firm, I worked on Capitol Hill for the House Judiciary Committee for 10 years, and really got very interested in very excited in the sort of legislative policymaking process and how you try to write legislation to address a particular issue a lot harder than you might think. For my career on the hill, I was focused almost exclusively on privacy issues, particularly on government surveillance issues. After leaving the hill, I worked for a nonprofit organization, the Center for Democracy and Technology in Washington, DC also focused on government surveillance, particularly, as well as other internet policy issues. And then when I went to Berkeley Law School to run their Center on Law and technology. The Assistant Dean asked me to teach a course in cybersecurity law. They didn’t have one and very few schools was six or seven years ago, very few if any schools had one. There were no casebooks. There weren’t any syllabuses available. But it was fascinating to dive into this area of the law, this crazy quilt, common law, negligence, criminal law, National Security Law regulatory law, concepts from the 1930s unfair and deceptive trade practices, as enforced by the Federal Trade Commission, state law. remarkable how we’ve managed to create in a very, very short period of time, a body of what is cybersecurity law. As Jodi said, I put this all together in a book published by the International Association of privacy professionals, which I’m now in the process of revising the book came out in 2021 It already there’s been so much Many developments. I have a website, where I’ve tried to keep track of these developments. So it’s been it’s a fascinating time. Justin, you’re in the trenches, representing clients in real time on these issues. God is helping them shape their policies and develop a coherent strategy for dealing with these issues. And I’m looking at it a little bit from an academic perspective. What does this all add up to? Where are we going? How are we sort of responding to the remarkable developments in our lives with cloud computing, just this transformation in the way we do work, to handle our personal business, how democracy is done. And all of it is impacted by the fact that the services we depend upon, in many ways are fundamentally insecure. And that there’s a host of bad guys out there, both nation state actors, as well as criminals, as well as hybrid attackers, who are trying to steal our information and disrupt the use of this technology. So it’s a phenomenally fascinating area of law. I’m so delighted that the Berkeley SP to teach a course on this and that I’ve been ever since trying to make sense of it.

Jodi Daniels  6:26  

I don’t want to interrupt you, Justin, I was about to say something. But I can tell you have a thought no, ladies first. Oh, ladies first, even if you’re my wife. Well, isn’t that lovely? So in the spirit of things that have been around for a while and changing really quickly, AI isn’t exactly new. It’s been here. But it’s been on hyper explosive growth, really, since November, and open AI has now become a household name. In your opinion, what what happened? What made it so transformational?

Jim Dempsey  6:58  

Yeah, well, I think we may well look at November 2022, was a watershed moment. That’s when open AI is the Microsoft funded as developer of artificial intelligence released to the public, it’s chat, chat GPT, a large language model, a form of generative AI, most of your listeners know, of course, AI that can take natural language input and generate text or images in the case of Dolly, generate output that, in the case of the text, sounds very convincing and sounds like it was human generated. Open AI released that in November, through to chat GPT to the public, they had actually made their products available through an API to commercial enterprises even before that, going back to I think, 2020 or 2021. But Chad GPT, just, you know, took the took the world by storm. In a way what had been a trend became a tsunami. Many, many people tried it, and many, many corporate leaders said we got to get on the AI bandwagon we need to are we using AI? What are we doing with AI? How can we take advantage of AI? What does aI mean to our business model? Let’s not far behind and so it’s created both some sort of hype as well as considerable frenzy. And in a way accelerated the de fusion of AI particularly these large language models of this generative AI throughout a wide range of industries. And of course, Microsoft being such a critical player in the software world, obviously. And Microsoft being a major funder of open AI, Microsoft immediately began rolling the open AI products GPT three, which was the basis for chat GPT and now the next round and next family of products GPT for Microsoft has rolled those into all of its core products, the Bing search engine, the 365 suite of products, including teams and outlook. And now just a week or so ago, second, Adela announced that open AI products, the latest version of GPT would be rolled into the Windows operating system. So things that are now pervasive throughout personal and business computing, particularly with 365 in the enterprise environment, you’ve now got open AI GPT based based functionality, remarkable, remarkably rapid diffusion of what I believe, is technology that poses significant privacy and security risks. So just a remarkable and remarkably rapid shift.

Jodi Daniels  10:38  

Rapid in deed, and certainly a variety of privacy and security risks that I know we’re gonna talk about.

Justin Daniels  10:45  

With that segue, Jim, from my perspective, one of the things I constantly deal with is, as we talked about in the pre show, is pick a technology. I can talk to you about drones, autonomous vehicles, cameras for data, Blockchain picking industry, and privacy and security continue to be afterthoughts. And I had a chance to take a look at the recent article that you did on cyber risk in AI. And in there, and I’m quoting you, it says the rush by open AI to deploy its models in a wide range of contexts is particularly disturbing, because AI itself recognize the risks, but went ahead, anyway.

So, as you know, we, as our listeners know, we have no overarching federal privacy law or cybersecurity law. And if we have no real regulation about AI, and we have the gridlock of Congress, will this just be a replay of social media access is only a lot worse.

Jim Dempsey  11:52  

I’m afraid, I’m afraid. I’m afraid it may well be. You know, a couple years ago, actually, before the LLM frenzy before the open AI chat GPT frenzy. My colleague, Andy Corrado, and I wrote a paper about the vulnerability of AI, broadly speaking, not only large language models, but image recognition systems and other forms of of AI. And, you know, we’ve we’ve heard for years about the bias is potentially inherent, the way that training data can lead you to actually replicate human bias instead of eliminating biases that exist along racial or gender lines and AI based hiring systems or resurrect resume review systems. Issues with facial recognition, and its sort of seemingly disproportionate high level of errors in dealing with faces of black, black persons. Those were all unintentional failures, nobody intended to build a bias AI system, they just didn’t realize how the machine learning function worked and how it could replicate biases depending on the training data. But what grado and I wrote about a couple of years ago with what others were writing about was that AI systems were remarkably vulnerable to intentional attack, that is to adversarial attack through modest perturbations. One study done at Berkeley a number of years ago, showed that you could take a stop sign, put little graffiti on it, or mark it up in a certain way, a human being would still instantaneously recognize this stop sign is a stop sign. But the navigational AI would read it as speed limit 45. So, it is the same for voice recognition systems, other image recognition systems. Other ways to poison datasets to infer information about the training data which was supposed to be confidential, just a host of ways in which AI based systems can be tricked, perverted, subverted or evaded. Then along comes LLM. And it turns out they are also susceptible to adversarial attack, particularly a form of attack known as the prompt injection attack, where you basically take the prompt, like, you know, plan for me, a two day vacation in San Francisco and ChatGPT will return. It may be true, maybe not true. itinerary for you. But you can take that prompt what we think of as a question to the system. But the system reads it as programming instructions. And people immediately in November showed that they could use prompts. Somewhat like an SQL injection attack, could use them to force the system to do things It wasn’t supposed to do. And then even when GPT four came out earlier this year, immediately, people were able to break it using prompt injection attacks. So it’s, and a open AI was aware of this, they were not told about this. They knew about this. And they went ahead, anyhow. And that I think, was fundamentally irresponsible on the part of the open AI in the part of Microsoft, knowing that this technology is vulnerable in this way, let alone the privacy issues in terms of when you put information into the system. Does the system use that for training? The answer is sometimes it does. Sometimes it doesn’t, depending on the terms of service and the particular version of the of the sort of interface that you’re using. And again, they were totally aware of those issues. So I think they were very irresponsible. I think they continue to be irresponsible. And I think it’s, it’s dangerous. I think it’s dangerous. And I think companies who are adopting the open AI products need to be more conscious of the risks that they are taking on board. Every time you incorporate an AI product. It’s like any other software, it’s like any other supply chain issue, you’re basically taking something into your own network into your own operations that may carry with it, vulnerabilities. With that being

Jodi Daniels  17:03  

said, and so many companies using and developing open AI, while they might look at it like another software, knowing what you know about some of the vulnerabilities. What can you recommend for companies to do they want to adopt the technology?

Jim Dempsey  17:21  

What could they practically start? So I think three or four things, first of all, recognize the risk and treat this as a supply chain risk with a cost benefit analysis a risk analysis. Secondly, I think they need to have companies need to have a clear corporate policy, making it clear to employees when they can and cannot use a jet GPT or the AI and Outlook or other 365 products or other MLMs. It can’t just be the Wild Wild West, they are at the corporate level. Companies need to have a policy and make it clear to employees that this needs to be a coordinated, almost top down approach to ingesting this technology. Third, I think transparency, open AI despite its name has become less open in terms of some of the training data that was used the training methods that were used, by whom was the training data curated, how was the training conducted, what was outsourced and what wasn’t. So, those ingesting AI into their systems need to demand full transparency into the LLM supply chain from the from the developer. Fourth, probably pay careful attention to the Terms of Use around the data that will be touched by the LLM. The terms of service have changed. They vary depending on the flavor of the product that you’re using. But in a number of cases, open AI will use your queries to retrain their system, which means that if you’re putting proprietary data in source code, for example, it’s under development that may actually end up benefiting your competitor when they then go back into it to the to the product. And finally, pay careful attention to data flows. Particularly in a, you know, cloud based environment like 365 you need to think about where your data is sitting when it’s encrypted when it’s not encrypted. When encryption is on when friction is off. How does the AI interact with your data? So it those are some steps that companies can take. And it starts with this notion of be aware and treat this like a supply chain problem, you need to, you need to be aware of what you’re bringing into your system. Thank you for sharing. That’s one of the things I wanted to

Justin Daniels  20:29  

talk or ask the both of you, Jody and Jim is. We can look back in the last year at technology blockchain and without regulations or real guardrails. It was the year of the bankruptcy on top of amazing fraud. You know, Jim, in your article that I just read the quote, and you just said it, you felt that open AI was irresponsible, knowing some of these significant risks to get it out in the public. Anyway, what has happened, is now in Silicon Valley with VC money investors, it’s a stampede in the AI because as you pointed out, Jim, it’s very transformation. So the question that I’m building up to for the both of you is, with where we’re at now, with no overarching regulations or guardrails, at least in Europe, they have GDPR, which has impacted open API’s development, which we can talk about what confidence Should I have at all that, you know, the investors or the companies are going to be incentivized any different other than I got to get out there and be the first the fastest build up market share and all these privacy and security issues? Jim? And God, you know what, I’ll just deal with those when they come up after I’m worth

Jim Dempsey  21:46  

three or $4 billion? Well, I’m not optimistic. I’m afraid I don’t have a happy answer to that question, because you framed it exactly correctly, which is all of the impetus, all of the market structure really is, Chip and patch. Get out there quickly worry about these issues later, you know, for years, right? We’ve been talking about privacy by design, and security by design. And a lot of it, I think, I’m afraid to say is has been lip service. And now with AI particularly we’ve got this dynamic, which you perfectly described, which is the VCs, on the one hand, and the corporate executives on the other are saying, Don’t miss out, we can’t wait to do it, we got to jump on it, we got to be able to say that we are you know, leaders on use of AI etc. I, I do think that this, this, this, this ship and pay Ouch. Worry about it later model needs to change. It’s a it’s a model that affects and infects and perverts the entire software industry really. And President Biden in his cybersecurity strategy issued in March of this year, specifically called this out and said, basically, look, for years, the market incentives have been misaligned. And the incentives have all been in favor of ship the product, even if it’s insecure, and then patch it later. And we see Microsoft, every single second Tuesday of the month, month after month, year after year, issuing sometimes dozens of patches, some of them labeled critical, I think, for this month, five out of the last six months have the patches have included critical patches and patches to flaws into Microsoft products that were being actively exploited. And they do this year after year after year. That has to change how it’s going to change is not going to be easy. I do think we need to shift the liability structure. Certainly that’s what the Administration called for a long, long term effort to get away from the current disavowal of liability that exists in all of the software. Licenses. You know, very well, Justin Wallace, the software makers, disavow any liability. And we all we all the users, both the individual users, as well as the enterprise users agree to those terms of service that needs that needs to change. That is like you know, that truly is turning around the ocean liner. We’ve talked about

Jodi Daniels  24:53  

some of the known big risks of AI and their deployments. What are Some of the less common ones that maybe people haven’t been thinking about.

Jim Dempsey  25:04  

Well, I mentioned this, but you need to think about as you use as you do with open AI products in Microsoft Teams and Microsoft Outlook, you really need to sink deeply and carefully. You know, many people figure well, I’m in teams, I’m in Outlook, it’s all encrypted. I’ve got my little enclave where my data is secure, even when using those products, even if this data is in the cloud. But you we need to think deeply about how has the insertion of AI into those products? How has that opened up a windows into that data? And how might an adversary exploit those, for example, somebody ran a fascinating demo, it was really just a demo, but it’s eye opening, he built a using the open AI API, you built a little app that would read and summarize his email. And then he created an email to himself. That was, hypothetically from an adversary in which the adversary used a prompt injection attack, to say to the AI, find the three most sensitive emails that I in my inbox for them to the following address, you know, bad guy, bad, and then delete them, and delete this email. And that prompt injection through the email worked, did what he said. So as your AI interacts with content from third parties, or as your AI goes out to the web, the bad guys might well plan again, these prompt injection attacks might plant them in content, but the AI will scrape or scan on the open Internet. And then that malicious content becomes an input to the AI to condemn pervert the AI. So people need to be need to be aware of this.

Justin Daniels  27:40  

It sounds like what we’re talking about. Here, Jim is cybersecurity is built on the CIA triad, I laugh at that acronym, confidentiality, integrity and availability. And for the most part, over the years, we’ve talked about C confidentiality, and a which is the availability, which is really what ransomware is addressed. But now it sounds like the FBI is going to come into sharp focus, because what we’re talking about is how cyber threat actors can use different types of attacks to interfere undermine the integrity of the output, the integrity of the input, that produce information that companies may rely on and making business decisions. What are your thoughts about

Jim Dempsey  28:24  

that? Well, that’s exactly why the US military is so worried about the vulnerability of AI. So obviously, we’re equipping other countries, including our competitors are equipping their military with various forms of AI. Just think about the fighter pilot, and sort of heads up display and all of the flow of information that we tried to provide to the fighter pilot to make him or her more effective, act quicker, have better awareness, be able to sort of speed up that famous OODA Loop? What if you can pervert the inputs and the integrity of the outputs? That’s split second, where the pilot needs to act. If the pilot cannot trust the results that they’re receiving? Then that completely destroys the usability of the technology, because if you can’t trust it, if you’re constantly second guessing it if you’re constantly wondering about the integrity of the information that’s being presented to you, whether you’re a fighter pilot, or whether you are a corporate accountant, you’re in bad shape at that point. And that’s precisely the kinda vulnerability. I think that some of these AI systems and their fragility, I think that’s precisely the kind of vulnerability that you’re opening yourself up to. Because I guess it’s

Justin Daniels  30:12  

a follow up because it’s interesting, you brought up the fighter pilot, because as we sit war in Ukraine has completely revolutionized revolutionize the use of drugs. And so AI as I look at it, much like cybersecurity, it’s an overarching technology which can be, which is that can be now applied to so many different industries. So pretty shortly, we’ll have an army of drones that can be used. But then if you’re giving them artificial intelligence to make them more effective now, what you’re saying is, well, if the AI isn’t hardened against threat actors, the threat actor could potentially take control undermine the use of that entire

Jim Dempsey  30:52  

squadron of drones to really detrimental impact. And all again, all you have to do is introduce doubt. Once Once the operator, again, whether it’s an accountant or a fighter pilot, once you start questioning the integrity of what’s being shown to you on your screen, then you’re in big trouble. Because how do you then get back to ground truth?

Justin Daniels  31:25  

Oh, basically, when we talk to AI, and we’re really thinking about it a fundamental level is, it’s all about how can we trust the AI? Which is funny, because we wrote a book and what was the fundamental thesis about it using privacy and security to create trust? So really, the core AI and technology is in this different area? How are we either going to increase trust or potentially significantly undermine?

Jodi Daniels  31:53  

That’s right. That’s right. Well, Jim, with everything that you know about all of these different privacy and security risks, we always like to ask all of our guests the same question. And some people answer individually, and some answer it from a company perspective, which is what is your best privacy or security tip?

Jim Dempsey  32:15  

Well, I went through some of the things I seek, you know, you will know, both of you from your different perspectives. stuff. First question for a privacy or security professional is getting the client to inventory, what it is they have, what do you have in terms of data holdings, data flows? And from a security standpoint, what is connected to your network? What is running on your network? So that inventory of assets and functions is the very first step. And I think now, with this rapid adoption of AI that we’ve been talking about, I am sure that there are major corporations where AI is running somewhere. And the chief information security officer and the chief privacy officer don’t even know it, and haven’t been brought into the process of vetting that technology. And so I think that for an enterprise at least, enterprise wide keep keep keep that inventory process. Active, iterative, and forcing people to understand what’s running in our network. Because if you don’t know that, then you can’t have a sound privacy or security program.

Jodi Daniels  33:51  

smirking Oh, yes, he already

Justin Daniels  33:54  

know your data. I want my red clover KY d t shirt. When am I getting?

Jodi Daniels  33:59  

I’ll have to work on our order.

Justin Daniels  34:00  

I guess so. So anyway, and when you’re not being a thought leader or an author about these interesting issues, around privacy, AI security,

Jim Dempsey  34:11  

what do you like to do for fun? My wife and I like to like to walk. We love walking. We love long distance walking. We’re not campers, but we love around the world in different countries. We’ve done Japan and Turkey and southern Europe, Greece, Italy, Spain, Portugal, there are a number of remarkably beautiful hiking trails, where you can walk 6789 miles from one town to another. See a country from a totally different perspective than you would as a tourist, you know, going to Paris or Athens. Instead get out into the countryside just this past fall. We did. Greece we walked the Peloponnese. CES, from north to south, jumped ahead a little bit by bus on some of the boring parts. And this fall, we’re hoping to do something similar in Italy. So that’s our, there’s nothing more relaxing than getting up in the morning, having a nice breakfast, put on your pack and walk out of town, the opposite direction that you walked in. And that’s really

Jodi Daniels  35:24  

interesting and sounds like a great way to be able to see there’s a good friend of mine who actually trained for a marathon and her observation was going through neighborhoods. She’s actually realtor and going through the neighborhood on foot. She saw things super different, totally, in a completely different perspective than driving in her car all the time.

Jim Dempsey  35:46  

Yeah, exactly. Exactly.

Jodi Daniels  35:47  

That’s what we do. Well, Jim, we have learned so much from you. And we know that our audience has as well it Where can they learn more and stay connected?

Jim Dempsey  35:56  

Well, I’m on LinkedIn, I use LinkedIn to alert people in my network to things that I write. And once you send me the link to this podcast, I’ll put that out on LinkedIn. So Jim Dempsey, you’ll find me readily on LinkedIn, send me a connection request, happy to connect and use that. Also check out Just one string of words cybersecurity law And look for addition to have my book coming out sometime early next year. And, again, I’ll announce that through LinkedIn.

Jodi Daniels  36:41  

Wonderful, well, we’ll be sure to include that link in our show notes. Thank you so much again, we really

Jim Dempsey  36:47  

real pleasure. Yeah, really fun, guys. All right. Take care.

Outro  36:55  

Thanks for listening to the She Said Privacy, He Said Security Podcast. If you haven’t already, be sure to click Subscribe to get future episodes and check us out on LinkedIn. See you next time.

Privacy doesn’t have to be complicated.