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The Intercept’s latest…not even sure where to start.

By Ken Glueck, Executive Vice President, Oracle—April 27, 2021

Well, we have another installment in the series of stories about Oracle and China from Intercept reporter Mara Hvistendahl. We provided a not-so-subtle critique of her prior story here. Her new story is salaciously titled, “How a Chinese surveillance broker became Oracle’s ‘Partner of the Year.” She makes the false claim that “A network of local resellers helps funnel Oracle technology to the police and military in China.” The problem is the article itself proves no such thing, and she knows it. Taken together, we now have 9,000 words and a couple of tweet storms but, read carefully, scant evidence that Oracle is actually supplying technology to the surveillance state in China.

This story is yet another word-sandwich of innuendo. She uses pull quotes to quote herself. She misrepresents her prior reporting and has her timelines entirely backwards. She makes broad assertions that have nothing to do with Oracle. And much of the proof she offers is in the form of links to Wayback Machine web archives in Mandarin. But for readers that actually click through the links and translate the pages, much of her evidence fails to support her point.

In lieu of actual technology implementations, she continues to argue that public PowerPoint presentations are responsible for Chinese repression. She quotes an actual, real-life anthropologist, who notes, “It does take some time to suss out your networks and figure out who is doing what.” [emphasis added and whatever that means]

She’s got hi-res photos which stunningly demonstrate the self-evident—that Oracle has a limited presence in China. One highly incriminating photo shows “a cyclist rid[ing] past a signage displayed outside Oracle’s building” at a software park in 2020. Yet, she glosses over the fact that Oracle is the only U.S. technology company that has steadily reduced its footprint in China, while all other U.S. technology companies have rushed into China with cloud technology and cutting-edge Artificial Intelligence.

But this story is different from her prior: it is so misleading that she is either getting half-information fed to her by a competitor (a point she doesn’t like to hear) or she is knowingly misrepresenting the facts.

Mara centers this story around a birthday cake, an obvious source of repression and surveillance. The story begins:

“Banners printed for the occasion read. ‘Build a new type of strategic partnership.’ Artfully made cutouts of the two companies’ logos adorned the stage. And the frosting on the massive sheet cake curled into a red ‘20,’ to celebrate two decades of cooperation between Oracle and one of its most important resellers.

This was the backdrop in 2018, when Oracle executives gathered with management from Digital China, a Beijing-based broker used by foreign tech companies to access the Chinese market. Roger Li, Oracle senior vice president and managing director for China, delivered a speech extolling the deep and sustained cooperation between the two firms, according to an account published on Digital China’s website. His team posed for numerous photos with Digital China representatives, including a carefully staged shot in which they together placed their hands on a cake knife.”

Her eloquent wind up ends with the “discovery” that Digital China was named Oracle’s 2018 “Partner of the Year”—a distinction conferred on 13 other resellers, by the way. Naturally, she omits that in 2020, Digital China was named Microsoft’s “Partner of the Year.” Nor does she mention that Digital China references more than 30,000channel partners” on its website (there’s a word for that, but this is a family blog).

Mara asserts that “Digital China and its network of subsidiaries are critical purveyors of technology used to build China’s surveillance state.” Digital China is a $12 Billion (annual revenue) Chinese technology company. What Mara doesn’t demonstrate is that Oracle technology is a meaningful part of that supply chain.

She points to an Oracle sale with Digital China for a whopping $400,000 as part of a smart policing project. It’s apparently a massive surveillance system requiring “at least one Oracle-certified engineer.” (yes, you read that right, one engineer.) The “towering” machine she cites as sold by Digital China for this project is, in reality, less than 24 inches tall. We told Mara that these pre-configured, pre-tested servers are simply not capable of being used for mass surveillance, but again, she wouldn’t let facts get in the way of a good narrative.

But wait, let’s take a closer look at this project she believes is so explosive. For starters, the contract is actually with the Public Security Traffic Management Bureau. The award does in fact show the single Digital China Dengyun server (1/8 of a rack), listed for $415,000. But she misses a few other items (Mara was apparently counting on us not reading Mandarin). Turns out the entire award is for $10.2 million so what about the other $9.8 million that didn’t involve Oracle? A quick scan of the award reveals the bulk of the procurement is for at least 7 full racks (oh, that should read “towering” racks) of Huawei servers. Plus there’s a $769,000 line item for two K1 Power E980’s from Inspur—the “localized” versions of IBM’s Power System E980. Perhaps the reason IBM and their partner are not mentioned is because they didn’t cut a cake.

Mara then cites other sales to the State Administration of Radio, Film and Television. What she doesn’t mention (or doesn’t know) is that was a sale from 2017, the last sale on record with this customer, for an Oracle StorageTek tape drive worth $54,057.00, including product support and freight. She also cites a sale to the State Sports General Administration, which was actually to the Sports Lottery Management Center for less than $2 million, including tax. Neither of these sales scream repression.

Then, in a bizarre riff, Mara seems to make our case. She references China’s campaign to “de-IOE Chinese supply chains.” (Note to reader: Oracle is the “O” in “De-IOE”). She states that “in the wake of PRISM-gate, as the PRC state media calls it, there was increased pressure on and suspicion of foreign companies like Oracle.” She goes on to say that “in 2013, revelations from the National Security Agency whistleblower Edward Snowden that U.S. tech companies assisted the agency’s spying set off alarm bells within the Chinese government, sparking a scramble to purge Chinese government supply chains of foreign technology.” (she doesn’t mention that Edward Snowden who has been charged by the United States under the Espionage Act is on staff at The Intercept, just saying.)

From this fact, she concocts the hypothesis that in order to circumvent China’s attempt to remove Oracle from its supply chain (de-“IOE”), Oracle secretly turned to “brokers.” (Mara doesn’t like the term “reseller,” commonly used to describe technology partners, because it doesn’t sound nearly nefarious enough, so she invents the more ominous-sounding term “broker” for her purposes.)

She states, “the resellers empowered by it offered one advantage: They helped shroud sales of controversial technologies, warding off scrutiny from both the U.S. government and human rights activists concerned about the ways that Western technology was being used to perpetrate techno-authoritarianism in China.” And then to make sure this secret (“shroud[ing]”) plan would succeed, we listed those resellers on our public website and then threw a public birthday party, cake and all. Of course, Mara does not understand that resellers are not unique to China, in fact, Oracle’s primary business with the U.S. Government is through resellers.

Then it’s time to insert an irrelevant third party quote, so Mara turns to Emily Weinstein, a research analyst at Georgetown’s Center for Security and Emerging Technology who has written about problematic work by U.S. tech companies in China. She quotes Ms. Weinstein as saying, “We’ve seen brokers crop up and become more important as a way to keep things underground.” Oh, wait, awkward, if you follow the link and read Ms. Weinstein’s article about “problematic work,”…you don’t see any mention of Oracle. Nor will you find mention of Oracle in her complete report, unlike Autodesk, Dell, Google, Honeywell, IBM, Intel, Merrill Lynch, Microsoft, National Instruments, Rockwell Automation, Synopsys, Tektronix, and Texas Instruments.

Sinobest is another “broker” Mara cites because they advertise on the Oracle Cloud Marketplace. While Sinobest is no longer an Oracle partner, their previous listing on Oracle’s Gen2 cloud deserves some clarity. First, as Oracle only offers our Gen2 cloud services from data centers outside of China, the Sinobest solution is banned for use by Chinese police by Chinese regulations (whoops). Second, the listing in Oracle’s marketplace is categorized as “Lead Generation,” offering an option to inquire about the Sinobest software. Unsurprisingly for a solution targeting police departments in China, we have no record of any leads ever generated from the listing.

She then blurts out in a single line that Kingbase is described on an Oracle’s partner site as having products that are used in the “national defense war industry.” That’s it. But she completely fails to offer a single piece of evidence that any of Kingbase’s products used in this fashion have anything to do with Oracle.

Let’s slow down and hold on a second. She states that:

“Xinjiang Hui Wen Network Information Technology, works extensively with the Xinjiang Production and Construction Corps, the entity that runs many internment camps used in the systematic persecution of Muslim Uyghurs and other minorities. Oracle previously told The Intercept that it sold technology to the Xinjiang Public Security Bureau, which oversees policing in the region, until 2019.”

This paragraph does nothing more than tie two unrelated trains of thought together because they have a common reference to “Xinjiang” in an attempt to somehow invoke the persecution of Muslim Uyghurs in her story. We previously told Mara that Oracle completed a limited number of transactions with Hui Wen Network Information Technology, the vast majority of which were for partner fees. But then, she doesn’t provide any evidence whatsoever that Oracle technology is involved in these transactions with Xinjiang Production and Construction Corps. Sloppy or intentionally misleading? You decide.

She caps off her exploration of Xinjian Hui Wen Network Information Technology by pointing out that they specifically list Oracle as a partner in a 2020 job posting. Again, she fails to mention that they also list Microsoft and VMware as partners in that same posting. The actual job description doesn’t mention any Oracle skills in the requirements, rather they require experience in products from US companies including IBM, HP, and Cisco. Unless the reader goes to the trouble of translating that page from Mandarin, they’re left to believe that job posting is all about Oracle.

Speaking of stringing together two unrelated sentences, Mara states: “Oracle’s work with brokers illustrates the role that Western companies play in driving surveillance in China, even as they scale back their presence there. ‘The West has a long history of selling arms and surveillance systems to other countries,’ said Maya Wang, a senior researcher on China at Human Rights Watch.” Ok, Mara is there a point in there somewhere because Ms. Wang’s broad statement about “the West” doesn’t seem to have anything to do with Oracle?

Moving on, she cites a 2012 quote from former-Oracle CEO Mark Hurd that Oracle is “ramping up its business in Asia” (yes, that’s quoted in its entirety from the story) as if Japan and Korea are now part of Europe. Oh, and there’s one other problem…Mr. Hurd does use the words “ramping up,” but doesn’t say “business in Asia.” If you read the transcript, he was specifically talking about “ramping up” the launch of a brand-new product at the time. The “business in Asia” part is just fabricated.

Ok, one more just for fun, because this one is exciting. Mara cites an Oracle presentation that she claims is about “neighborhood-level social control” in China. The presentation she cites is of a 311 system. It reads, “tattoo parlor is operating without a license,” “a local deli is falsely advertising cold-cut prices,” “a mouse is seen in a restaurant kitchen,” “a restaurant menu lacks caloric information,” “a neighbor plays her TV too loudly for hours.” Oh, wait, forgot to mention this slide is about a hypothetical 311 system in Manhattan, not China.

In the end, we certainly agree with Mara’s concerns about human rights, pervasive surveillance and repression. But after 9,000 words we are still waiting to see her substantiate her egregious claims against Oracle.

And because we continue to call Mara’s reporting for what it is, we anxiously await her next installment.

Post Script:

Mara gets particularly perturbed when we highlight the work of our competitors in China because it fundamentally undermines her stories. Mara seems uninterested in reporting on the significant investments and partnerships that some industry colleagues are making—from joint ventures to source code sharing; from “transparency” centers to joint research in Artificial Intelligence. Or even investments in the future Chinese technology workforce. If Mara were intellectually honest, she would move on from Oracle since she has struck out twice, but we are not holding our breath. So, we thought we would provide a bit of an assist:

  • IBM, with its longtime presence in China has surrendered most of its proprietary technology to Chinese competitors to expand market access, and they have even submitted to source code review by Chinese authorities. They’ve entered into joint ventures with partners, some that have eye-raising ties to the PLA and public security organizations. Let’s also not forget about their commitment in 2015 to share technology with Chinese firms and actively help build China’s industry. And, their investment in China has not stopped, as indicated by their GCG Ecosystem Strategy win announced in 2020. Under one of the three pillars in this strategy, they launched—with partners—an Artificial Intelligence center that “will act as a research and development lab focused on exploring smart future applications and Watson-based technologies, such as speech recognition, cognitive image detection and deep learning.”
  • Microsoft China, its “most complete subsidiary and largest R&D center outside of the United States” has been working closely with Chinese customers and industry “brokers” numbering some 17,000 partners. Microsoft Research Asia, its largest Microsoft research institute outside the United States and considered the “cradle of Chinese artificial intelligence,” counts among its alumni people selected for the Thousand Talents Program and chairpersons or chief technology officers at Fortune 500 companies in China or China’s top 100 Internet companies such as Alibaba, Baidu, Xiaomi, Toutiao, Haier, and Lenovo. And in addition to its expanding cloud footprint in China, Microsoft’s substantial resource investments are helping to develop Chinese human capital in technical areas like artificial intelligence and software engineering.
  • Aside from its cloud offerings, AWS has invested heavily in programs that support broader strategic Chinese objectives for modernizing its domestic cloud computing industry such as educating and training the future Chinese technical workforce. For example, in the last few years AWS launched at least four Joint Innovation Centers in high-tech areas, some are even hubs for smart city technologies. By partnering with local governments and third-party Chinese operating companies, these joint innovation centers benefit from preferential industry policies and government resources. They also provide incubation services for startup companies, including technical training and counseling, business guidance, and investment and finance support.
  • Google, which once left China after discovery of a major Chinese intrusion and a subsequent banning of its search engine, eventually reentered the Chinese market. They also opted to open the Google AI China Center, focusing on basic AI research while also supporting “the AI research community by funding and sponsoring AI conferences and workshops, and working closely with the vibrant Chinese AI research community.” This is an interesting investment given their former CEO Eric Schmidt’s stern warning that there will be a national emergency should China overtake the US in AI. But, for a company that seems less interested in supporting the US government, perhaps this investment is logical.

So there we go…just a quick tour of how U.S. technology companies are actually operating in China, with no expectation that any of this would interest Mara.