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This US Bitcoin Mine With China Ties Has the Pentagon and Microsoft on Edge

2 mins
Updated by Kyle Baird
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In Brief

  • The Pentagon and Microsoft express concerns over a Wyoming Bitcoin mine, owned by Chinese nationals, due to its proximity to sensitive US sites.
  • Despite Bit Origin Ltd.'s reassurances, the mining operation is seen as a potential threat to US national security and is under government scrutiny.
  • Amid these concerns, the CIA is developing an AI tool to improve data processing, signaling a competitive stance in the global AI race.
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The Pentagon and tech giant Microsoft are sounding alarms over a Bitcoin mining operation in Wyoming. Chinese nationals own this particular Bitcoin mine that is close proximity to a Microsoft data center and a military base.

The operation, linked to five companies, including Bit Origin Ltd., is viewed as a potential national security threat despite reassurances from Bit Origin’s president, Li Jiaming.

US Bitcoin Mining Firm With Chinese Ties Raises Concerns

According to The New York Times, Pentagon officials and Microsoft are concerned that this strategic location could enable the Chinese government to “pursue full-spectrum intelligence collection operations” targeting the data center and the Francis E. Warren Air Force Base, which houses Intercontinental Ballistic Missiles (ICBMs).

The crypto mine first came under the US government’s scrutiny when a Microsoft team flagged it to the Committee on Foreign Investment in August 2022. Microsoft said that it “has no direct indications of malicious activities by this entity.”

It added,

“However, pending further discovery, we suggest the possibility that the computing power of an industrial-level cryptomining operation…provides significant threat vectors.”

China banned the practice of Bitcoin mining within its borders in 2021. This pushed crypto businesses to establish themselves elsewhere, including the US.

China's Bitcoin Crackdown Shifted the Mining Market Share. Source: Statista
China Bitcoin Mining Crackdown Shifted the Market Share. Source: Statista

The Times identified mines in 12 states owned by Chinese nationals, some with ties to the Chinese government, others without, and some untraceable. The Cheyenne, Wyoming center, linked to Bit Origin Ltd., is one such mine.

Li Jiaming insisted the location choice was purely for business reasons, stating,

“Even though we are a Microsoft neighbor and a couple of miles from the base, without power it is nothing — the business cannot succeed.”

He claimed the mine was situated there due to a local utility company’s willingness to work with Bit Origin.

Read more: How To Mine Cryptocurrency: A Step-by-Step Guide

AI Race With China Heats Up

Meanwhile, the CIA is developing an AI tool akin to OpenAI’s ChatGPT. Its goal is to enhance open-source intelligence access and improve data processing across the US intelligence community.

This move is part of a broader government campaign to compete with China’s AI aspirations. Randy Nixon, director of the CIA’s Open-Source Enterprise division, highlighted the need for more efficient data processing:

“We have to find the needles in the needle field”

As these events unfold, the US grapples with the complexities of foreign-owned crypto mining operations and their potential national security implications. At the same time, it is also striving to maintain a competitive edge in the global AI race.

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