Dmitri Alperovitch - Co-Founder of CrowdStrike: His Opinions on China

You've lived through the rise of cyber conflict firsthand. How did your experience in cybersecurity shape your understanding of modern state competition and influence your thesis in the book?

I think cyber is one of those canary in the coal mines that gives you a preview of what's to come from adversary nation states like China, Russia, Iran and North Korea. I've been privileged throughout my career, particularly in the last 15 plus years, to investigate some of the most consequential nation states operations from China, from Russia, from Iran, North Korea. And that gave me an early insight into what these folks are up to. Because cyber of course, is one of those things that is the niable way to hit an America, an asymmetric tool to accomplish their objectives. And in particular with China, I was the lead investigator on something that ended up being called I named Operation Aurora, which was the Chinese intrusion into Google, about two dozen other companies back in 2010. It was the first time that the public literally learned that China was hacking into our networks, into private networks, stealing our intellectual property and trade secrets, and over the course of the last 15 years, really uncovered a huge vast number of operations from China and coined the phrases that, you know, there are two types of companies, those that know that they've been hacked and those that don't yet know that what China is doing to us is the greatest transfer of wealth in history. And that led me to start thinking, what is it that they're trying to do here? And I ended up realizing that this is economic warfare that has been waged against American companies and other Western companies, companies to help domestic industry in China, to help them compete better against us and ultimately bleed that over into national security advantage in the Cold War that I believe they're waging against America.

Great. Got a couple more. Okay, you subtitled the book How America Can Beat China. What does winning actually look like in your view, economically, technologically, militarily or ideology, ideologically?

Yeah. So look, I believe that we are much stronger than China in almost every respect. We have a much stronger military, our economy is 25% greater in terms of raw GDP than China's. And with their growth rates having come down substantially thematically, it's becoming next to impossible for them to ever catch up with us. We have a great alliance network in the world. We have some of the greatest educational institutions everyone wants to come and study here. We have some of the best technology companies, right, that are leading the ira, that are leading in the semiconductor development, they're leading in bioscience and so many other areas. We have huge advantages. And what we want to do is make sure we don't lose that to China. I believe that this is a cold war that China is waging against us. And we need to make sure that we win this cold war by remaining the world's preeminent superpower, both economically and militarily. And we prevent China from becoming first a hegemon in the Pacific by taking Taiwan and changing the global distribution of power, particularly in that region, and ultimately remaining the one country that sets the rules of trade and national security order around the world. We don't want that to be China.

You argue that China poses not just a military threat, but an economic and ideological one. Which of these do you think the west is least prepared for and why?

I think the economic threat from China is really the main issue. Right. It drives the improvements in military modernization that you've seen from China, one of the greatest in all of human history. That is the reason why our power in the Pacific is eroding right now vis a vis China. Why they're making preparations for invading Taiwan, something that, of course, they've wanted to do since 1949, since the end of the Chinese civil war when the Communists won and the Nationalists fled over the Taiwan Strait to Taiwan, but something they. They could never really do because their power was so much smaller than the United States. From a military perspective, now that's starting to shift. We. We still have the edge, I believe, but it's increasingly eroding. And that is all driven by the incredible economic miracle that has taken place in China since 1979, largely because of the United States, largely because we, and then followed by the rest of the world, recognize the prc. The People's Republic of China removed the recognition from Taiwan, established trade relationships invested in China, helped our companies set up businesses there, transferred technology, and now China is the second largest economy in the world.

You've spoken about China's strategic patience. How does that differ from America's approach to global competition? And what lessons can the US Learn from it?

Well, of course, here in America, we're impatient. And our whole system of government and business is not set up for patience. Right. If you're a public company, you're looking a quarter or two quarters out at most. When you're thinking about investments, when you are in a political realm, you are thinking about the next election, the midterm election, the presidential election. So two to four year cycles. In fact, when you look at our national security strategies, every single president that comes into office writes a new one. Right. So is it really strategy if you keep changing it every four years. And China of course doesn't have the democracy problem, so called democracy problem. To be clear, I'm a fan of democracy. I'll take it over their system any day of the week of the week. But the reality is that Xi Jinping doesn't have to worry about that. He can take a longer term view and come up with a five year plan and execute on it. And that's a challenge for the United States.

You've been critical of America's over reliance on deterrence. What does an effective offense look like in the 21st century geopolitical arena?

Well, look, the way we won the Cold War is by following George Kennan's insight that you need to contain the Soviet Union in all realms, economically, militarily, diplomatically, to prevent their expansionism. We basically, I believe have to do the exact same thing in Cold War II with China. We have to contain them in the economic sphere. We have to restrict the ability to gain in influence all over the world. This is not just an issue for the Indo Pacific. This is not just about Taiwan. Their influence is spreading in the Middle east, in Africa, in Europe, all over Latin America, even in the Caribbean. And we have to provide alternatives for countries that don't want to be in China's sphere. And this is particularly true in the Indo Pacific where pretty much every single one of China's neighbors, whether it's maritime neighbors or those that they share a land border with, they have disputes with. Russia is the only one that they've managed to resolve that under Xi Jinping and Vladimir Putin. But at the end of the day, India, Philippines, Japan, obviously Taiwan, Vietnam, all these countries have conflicts with China. India recently fought a short border conflict with sticks back in 2020. Philippines of course, deals with South China Sea issues with Chinese encroaching on various shoals in the South China Sea that are disputed between Philippines and China on an almost weekly basis. This is a huge problem for the region in particular, but others as well that are getting pressured by China, whether it's Australia in the aftermath of COVID whether it's countries like Lithuania that have dared to build better relationships with Taiwan, they've all faced Chinese coercion and we need to help those countries confront China and feel empowered to to be in our corner.

You've seen the front lines of cyber warfare through a crowdstrike. You were the co founder and ct. How has the nature of conflict cyber conflict evolved since you helped pioneer that field?

Look, I've coined this phrase a long time ago that we don't have a cyber problem. We have a China, Russia, Iran and North Korea problem. In that when you look at the threats that we face in the cyber domain, the nation state threats are coming almost exclusively from those countries and the militaries and intelligence services of those countries. And even in the criminal sphere, the majority of cybercrime that we face today, particularly the most insidious kind like ransomware, is coming from criminal groups that are based in those countries, that are provided safe haven by those nations. And that's not an accident. The reason it's those four is because there are four primary adversaries. And it's not that no one else has capabilities in cyberspace or there are no cybercrime cybercriminals elsewhere. But those nations that we have very good relationships with don't tend to attack us. Right. I don't worry a lot about what Singapore Cyber Force might do against the United States states because we have a good relationship with them. I don't worry a lot about cybercriminals in the UK because I know that the UK law enforcement agencies will investigate it thoroughly and will arrest them if, if they're doing significant damage to the United States. So the problem really is with those four geostrategic adversaries. So cyber in effect is geostrategy.

You often stress that technology, from semiconductors to AI is the new battleground. Which specific technologies will most determine global power in the next decade?

I believe that to win this new Cold War, the United States has to win the race for four critical technologies and two components that go into those technologies. The technologies are AI and autonomy. Almost self explanatory these days, that AI will be transformative to everything beginning with the military, right? With the use of autonomy in military systems, with the use of AI for logistical planning, with for human resources planning will really reshape the way that we fight conflicts in the future. And obviously from an economic perspective, it will transform nearly every industry. So really important that it's the United States that wins that race and not China. Secondly is bioscience. And not just in the medical sphere where you're seeing incredible advancements and treatments for new diseases and new ailments, but also in the area of biomanufacturing, where one day we might be able to produce new energy sources through the use of bioengineering. And a lot of that will come through AI advances. So really important that we're leading that sphere as well. And we are today. The third one is space. You have seen What Elon Musk and Starlink have been able to do in revolutionizing low Earth orbit in terms of communications, navigations, surveillance, intelligence, surveillance and reconnaissance, all sorts of things really important that we maintain our reach there. And the fourth one is energy, and particularly the new forms of energy, whether it's nuclear, whether it's other forms of renewables. Fortunately, China is ahead of us in many of these areas, particularly in the form of batteries and electric vehicles and the like. And we have to catch up and we have to ultimately win that race as well. And then the two components that go into all of these technologies are chips and critical minerals. We have to ensure that China does not achieve independence in chips manufacturing, that that remains in the west. Tsmc, of course, the leading company in Taiwan, manufacturing not just 90%, 95% really of all advanced chips, but, but 40% of all the chips in the world, period. And critical minerals. We have a problem in that we have a huge reliance on China in many areas. Not just rare earths, but nickel processing, aluminum, steel. They're trying to achieve dominance in all those sectors, particularly in the refining processing of those critical minerals. And we need to end our reliance on China there.

What's your take on Taiwan? Do you think conflict there is inevitable? And how should the US realistically prepare for that scenario?

I don't think conflict over Taiwan is inevitable. Clearly Xi Jinping wants to take Taiwan. I believe he wants to take it on his own watch. The man is in his early 70s. He'll be up for reelection in 2027 for an unprecedented fourth year term, which he's very likely to get unless some sort of health issues or something else comes in his way. That'll be another five year term that will expire in 2032. In 2032 he'll be 79. So in the Chinese system, unlike ours, they don't tend to elect their leaders into their 80s. So quite possibly, and also, you know, health concerns may get in the way as well. Quite possibly he'll be thinking in 27 once he gets into office, that that five year term may be his last. And whatever is left on the to do list needs to get done in that five year period to cement his legacy. And I believe Taiwan is on that list now. It doesn't mean that he's for sure invading Taiwan. It is very difficult to pull off. There's a lot of uncertainty around success and particularly if he fails, the stakes are incredibly high for him. It could be the end of his life. It could be the end of the Chinese Communist Party's hold on power in China. So he needs to have a great deal of confidence that he can actually do this without severe ramifications for China or himself personally. And we can impact that calculus. We can enhance deterrence. We can ensure that we're more independent from China in the economic sphere so that he doesn't think that we are so intertwined that we will never fight for Taiwan. We want him to think, whether we do it or not, we want him to think that we might very well defend Taiwan. And then things get much, much harder for the Chinese military in terms of being able to accomplish this task.

And you're in your book, you argue that alliances are America's secret weapon. Which alliances are most critical right now and which ones are most at risk?

Well, I think America has built the greatest alliance system in the world. We have more allies than any country in human history and stronger allies where people are contributing both to our economic security and our military security through those alliances. Now, it comes at a cost and obvious, obviously, we have engagements all over the world and military bases to help protect those alliances, but we get something out of it as well. So it's not like these, these countries are just free riding on our, on our largesse. And, you know, you could argue, as Donald Trump does, that there's ways to reform some of those treaties, particularly on the economic sphere, so that we get more of the benefits than we have in the past, and that's fine. But fundamentally, I think even Donald Trump realizes that it's important to have friends. The more friends you have, the better, whether it's in life or in the international relationship. And that's a huge strength for America that China, frankly, does not have. China doesn't have many friends in the world. Even Russia is really, it's much more of a transactional partnership. It's not an ally. They don't have a defense treaty. The only defense treaty that China has with anyone is North Korea, and that's not the one that you want necessarily to promote as a great friend that you've got. So we have a lot of strengths, but obviously from a military perspective and from a deterrence of China perspective, the partnerships that we're building in the Indo Pacific are most critical with partners like Australia, with Japan, with the Philippines, with India, really, really essential to have the capabilities surrounding China and South China Sea and East China Sea, so that in the event for better conflict, we can rely on basing, we can rely on support from those allies. And I believe that should there be a war over Taiwan, that the United States actually joins, which is not a certainty, but should that happen, at least Australia and Japan and perhaps even the Philippines will be with us.

Is the US already losing the AI race in China? And we're just too proud to admit it.

We're absolutely winning the AI race. All the leading models are coming from American companies. The OpenAI, Anthropic, Gemini, Grok. They're by far leading in most of the major benchmarks. And the reason for that is not just talent. Obviously we have smart people, but so does China. China probably has a lot more, given their overall population. It's not the algorithms. The algorithms pretty well known, and many of them are public. It's the compute. It's the AI chips. And we've got a stranglehold on AI chips because they're all being designed by American companies like Nvidia, Google, Amazon, amd, and they've been manufactured by one company, tsmc, in Taiwan, which is now prevented from exporting to China, except for chips that we explicitly allow. That is a huge chokehold we have over the Chinese AI industry. We need to make sure that we continue to have a huge advantage in compute over China. The Huawei Ascent chips that are sort of trying to be competitive to the to Nvidia chips are nowhere near as good. And by the way, we know from reverse engineering that the current batch of those chips has been manufactured illicitly by TSMC for them, and TSMC paid a fine for that export to Huawei. So they're incredibly reliant on us. And don't take my word for it, take the word of the Chinese AI companies. They're all saying that their progress is being constrained by inability to procure enough chips to drive further advancement in their model. So if we continue to strangle China on compute, we can absolutely win the AI race.

Why are we in a cold war with China?

You know, when I started writing my book, I've always believed, for many years now, in part through my cyber experience, that we're in a cold war. But I actually thought that this Cold War, Cold War II is very different from the first one. And then as I was writing the book and doing the explicit comparisons and contrast between Cold War one and Cold War ii, I realized how incredibly similar the two conflicts are in almost every area. There are about a dozen similarities between the two. One, you have a global competition for supremacy between the United States and China, just like we had between the United States and the Soviet Union playing out in every corner of the world, not just in Asia, playing out in the tech space, in the military space, in the geostrategic space, in the economic space. We have preparations for war. Both countries, as we speak, are building up military capabilities to confront each other, primarily over Taiwan and potentially South China Sea. We have an arms race related to those military preparations, but it's not just conventional, it's also nuclear. Just like in the first Cold War. Both countries are modernizing and building up their nuclear arsenals. Donald Trump just declared that he wants to return back to nuclear weapons testing like we were doing throughout the entire Cold War. And that only ended in the 1980s. And it looks like that post Cold War one period has now ended, and we're now squarely in Cold War two. We have a space race, right? One of the most defining moments, of course, of the first Cold War was this race to the moon in the 1960s that the United States won. What are we doing now? We're trying to get back to the moon and before the Chinese do, hopefully, and then maybe on to Mars from there. So another incredible similarity between the two conflicts. There's a scramble for military bases, just like we had during the first Cold War, where we're trying to secure basing rights in the Philippines, where we're back for the first time since the 1990s. We're trying to expand our presence in Guam, in Japan, in Australia. Chinese are trying to do the same thing all over the region. And Cambodia and Pakistan, even as far away as Djibouti, both countries are trying to shore up their military advantages on the basin front. There's an economic war, there's literally a trade war happening that actually did not begin with Donald Trump putting on tariffs on China back in his first term, but began, as I write in the book, with an incredible campaign by China to steal everything that's not bolted down, all the economic advantages from American and other Western companies. In cyberspace, we have a spy war. The greatest level espionage we have seen in modern history, including the first Cold War, is happening now with the espionage we're seeing from China against not just our private sector, but our government institutions, in part enabled by cyber as well. We have a tech war, including an AI war, and we have a major regional flashpoint in Taiwan that was West Berlin during the first Cold War. And ultimately, we also have an ideological competition where China is obviously an authoritarian nation, a communist nation. Xi Jinping is a Marxist, Leninist, believes in that ideology. We are obviously a capitalist nation. So there's an ideological component to this fight, just like there was in Cold War one.

Dimitri, why Does China want to invade Taiwan?

Yeah. You know, I was one of the early predictors of Russian invasion of Ukraine. And I believe that there are five reasons why Putin decided to invade Ukraine. And those five reasons actually are the same reasons why Xi, I believe, wants to invade Taiwan. Their history, destiny, security, geography and ego history. Both of these leaders, Putin and Xi, have a distorted view of history. We believe these nations, Ukraine and Taiwan, are not independent countries that deserve to survive outside of the respective empires of Russia and China. Both Iran, of course, and the views are historical. Nevertheless, they believe that passionately. And by the way, most of the populations in Russia and China believe the same thing, that Ukraine is not a nation and Taiwan is not a nation either. There's a destiny element of this as well. Both a personal destiny on their parts and a destiny of their nations to be sort of the great countries that they used to be. In the case of Russia, it's, you know, rebuilding the great Russian Empire or the Soviet Union, at least the power that it had back in the day before it lost the Cold War. And in the case of China, it's going back to China's origins, where for much of human history, China was the most powerful, most prosperous country, obviously the most populous on earth. And it lost that mantle first to Great Britain and then to the United States with the Industrial Revolution. And it wants to reemerge back on the world stage as a preeminent superpower. And Taiwan is really key to that. The reason it's key is for the other two reasons, which is geography and security. When you look at China, it is effectively contained by US military bases and allies from South Korea to Japan to the Philippines, forming the so called first island chain, in particular Japan and the Philippines. And at the center of it, of course, is Taiwan. There's a cork that keeps China bottled up where the US Navy is basically patrolling all of their trade routes from Malka Strait in South China Sea to the Taiwan Strait, where you have obviously the Taiwan being able to potentially control that key passageway if it's in US corner, but also between Japan and Taiwan, and Taiwan and the Philippines, really, really critical maritime pass. They're essential for China's security, but also for China's power projection. If it's able to control. Taiwan is going to be able to establish a dominant position all over that region and now push the United States military out of East Asia all the way back to Hawaii and start setting the rules of the road for Japan, for Korea, for the Philippines, our key partners in that region. And lastly, and mostly importantly, which I think is driving the timeline and was the reason, I believe, why Putin decided to invade Ukraine when he did, is ego, personal ego of these two men looking to secure their legacy, both in their 70s, basically the same age, Putin just about a year older, thinking about the key accomplishments that they want to go down into the history books with. And for Putin, it is securing Ukraine, it is securing Belarus, which he basically has de facto political control over. When he rescued the Belarusian president Lukashenko from the free elections that were about to overturn his regime back in 2020, he wanted to secure Ukraine, a crown jewel, one of the crown jewels in the old Russian empire. And Xi Jinping wants to take Taiwan because of the historical element, because of obviously the geography, the security that I've just talked about that will help ensure that he goes down into the history books. As someone who eclipses even Mao's legacy, of course, could never take Taiwan. If Xi Jinping is able to take Taiwan, he'll be far greater historical leader of China than Mao ever was.