Tag: Recent News

Welcome to How AI Transform Business, a new series featuring insights from conversations with Microsoft partners who are combining deep industry knowledge with AI in novel ways and, in doing so, creating leading-edge intelligent business solutions for our digital age.

Our first episode features eSmart Systems, which is in the business of creating solutions to accelerate global progress towards sustainable societies. Headquartered in the heart of Østfold county, Norway, eSmart Systems develops digital intelligence for the energy industry and for smart communities. The company is strategically co-located with the NCE Smart Energy Markets cluster and the Østfold University College and thrives in a very innovative environment. When it comes to next-generation grid management systems, or efficiently running operations for the connected cities of the future or driving citizen engagement, the company is at the forefront of digital transformation.

We recently caught up with Davide Roverso, Chief Analytics Officer at eSmart Systems. Davide has many interesting things to share about where and how AI is being applied in the infrastructure industry. Among other things, he talks about how utilities companies are forced to fly manned helicopters missions over live electrical power lines today, just to perform routine inspections, and how – using AI – it is possible to have safer and more effective inspections that do not expose humans to this sort of risk.

Davide Roverso, Chief Analytics Officer, eSmart Systems, in conversation with Joseph Sirosh,
Chief Technology Officer of Artificial Intelligence in Microsoft’s Worldwide Commercial Business.

Video and podcasts versions of this session are available via the links below. Alternatively – just continue reading a transcript of their conversation below.

Joseph Sirosh: Davide, would you tell a little about eSmart Systems and yourself?

Davide Roverso: eSmart Systems is a small Norwegian startup, was established in 2013. The main area in which we work is building SaaS for the energy and utilities sector. So basically, it was founded by a group of people that had been working together for over 20 years in the energy and utilities space. They were first working a lot on power exchange software, and delivered power exchange to California, among others. And then, about 2012, they went for a kind of exploration trip to the US, to Silicon Valley and that area, and they visited Google and Amazon and Microsoft and Cloudera and tried to find what were the new biggest trends. And they came back home with a clear idea that they had to focus on cloud and AI. And of course, they used that in their core business and that was power and utilities.

So that’s how eSmart Systems started.

JS: And so, you have an analytics team, or now is it an AI team?

DR: We have 10 data scientists, so more than 10% of the company is data scientists, so we have a big focus on AI. When I started in eSmart Systems about three years ago we were just two, so I built quite a good group since then. And we use machine learning in a lot of different areas. Two main areas are specifically time series analysis and predictions, and the other is more on analyzing images – we use that for inspecting, for instance, power lines with drones.

JS: You must have a lot of interesting projects. So, tell me, in the power and utilities industry, where is AI used?

DR: Well, we mainly work with the DSOs, distribution system operators, which are kind of responsible for distributing power to end users. Up to few years ago they were basically operating blind because the last lowest voltage network is not instrumented. But since the introduction of smart meters, every home now – well in most of the European countries they are rolling out smart meters and the same in most of the US – every home now basically has a sensor. So now, suddenly they have much more data they can use to more intelligently steer the grid. So, there AI we use mostly to make predictions of loads and consumption from different types of customers, both household and industry customers.

And this is very important information, especially now, with the large introduction of distribution energy resources – all the renewables that are coming online. A lot of people are installing solar panels on the roofs. A lot of end users are now what we call prosumers, so they both produce and consume electricity, so there’s a two-way flow of power and data. So, there are lots of opportunities to optimize this new kind of smart grid that is becoming more and more widespread now.

JS: Very interesting. So, what are some of the most exciting AI applications that you have seen now in the power industry and in what you are doing?

DR: We are developing some very exciting applications in the space of inspections. We are combining AI with drones. Of course, the electrical infrastructure is relatively old and requires quite a lot of maintenance and inspections. And, so far, these inspections have been mostly done manually, so periodically people actually walk along the lines and climb up the poles and check infrastructure. And the last few years they have started using helicopters, and they fly helicopters – quite dangerous missions because they have to be quite close to the power lines, and every year there are reports of near incidents. So, it is quite an expensive process, but it is, of course, necessary, and even more necessary as the infrastructure ages even more.

So, the idea here is to use drones to have a cheaper, more effective inspection. And here, it is very exciting to use all the new technology that we have today for this kind of image intelligence that we have, with deep networks and convolutional neural networks. So, recognizing infrastructure, recognizing different types of faults and anomalies.

JS: And so, how do you use the cloud?

DR: Our systems are basically deployed in the cloud. So, the smart meter / smart grid systems, they collect data from smart meters and upload everything in the cloud. And all the analysis – all the machine learning and AI – happens in the cloud. And the same for the drones. Well, there are different missions. If it’s kind of a periodic inspection, then time is not the big issue, you can analyze the images in batch, and then we use cloud for that. So, we upload – it can be hundreds of thousands of images – and process them in the cloud.

JS: So, what is the advantage that cloud brings you, cloud and AI together?

DR: It is scalability. Regardless of how many drones or how many pictures our customers are sending to the systems, we are able to serve those.

JS: Near instantly being able to provision as many resources as you want. Okay, that’s very good.

DR: Also, edge is very important, it’s not just the cloud, the intelligent…

JS: Intelligent cloud and intelligent edge.

DR: Because if you’re on a mission for finding a fault or outage as quickly as possible then you need intelligence on the edge. And you also need that if you want to have autonomous drones, of course. Because today, we still don’t have fully autonomous drones – we still have pilots that remotely pilot the drones – but of course, the longer-term vision is to have fully autonomous drones.

JS: So, have you developed a prototype of autonomous drones that can follow power lines?

DR: Yes, to follow power lines and then position itself in the optimum spots to take the correct pictures for the detailed inspection. So the drone is not doing the detailed inspection – that happens in the cloud – but is using edge AI to localize the components, the assets that we need to inspect and take the right pictures and then move on to the next.

JS: Is AI scary?

DR: Not today. But it can be, in the future, you know. Your probably read Bostrom’s book “Superintelligence” that came out in 2014, I think. So, he envisioned like a superintelligence that will take over, and we will not even notice that because it will come so fast we won’t realize. But this is a long time away. But anyway, today there are philosophical and ethical questions that are important to ask ourselves. And there are big institutes both in the UK and in the US that focus on that, so that’s important. But todays technologies can be weaponized in a way, so there is that kind of scary side of it, of using AI without ethical controls, for autonomous weapons. So, there are some initiatives there. In my opinion, there should be an international agreement on how to control autonomy.

JS: But all technologies are the same way, I would think.

DR: Of course.

JS: What are some of the most exciting AI developments you have seen recently?

DR: Well, of course, all the developments around visual intelligence as I call it – so all the analysis of images, segmentation, detecting objects, and things like that with deep neural networks, and convolutional neural networks – it’s very exciting. And one very exciting development is, of course, self-driving cars. That, for me, is very exciting, and I use it a lot as an example in my presentations because it both showcases vision development / technological development but also its an application that basically touches almost everyone. Everyone drives a car, at least in the developed world, so it’s one of the applications that will come – that we will feel – much more quickly than other ones. But, of course, all the developments around language and speech recognition, and all these new intelligent systems and bots that are coming, it’s very exciting developments. From the research point of view, I like a lot of what is happening around the games and gaming in AI. You know, we both started working on AI in the nineties, and at that time, well since the beginning, AI has been applied to games – from checkers, and then chess, Deep Blue beating Kasparov in ’97, and then, more recently, of course, AlphaGo, and AlphaZero, even more exciting and now the latest one with Open AI playing Dota 2 – so, it’s a very nice way of developing new concepts. It doesn’t have direct applications in the real world, but it develops kind of fundamental capabilities that real world systems are going to need.

JS: Any thoughts about the applications of AI outside of the power industry, some of the most exciting other areas that you might be able to go into?

DR: Yeah, well – basically all the work that we are doing both around images and inspections is applicable to other…

JS: … all types of inspections. Yeah, one thing I heard sometime recently was about inspecting for lightning strikes on aircraft. And they were looking to see if you can use AI to identify, because today again somebody has to climb the airplane and go look at spots and see if there has been a lightning strike.

DR: Or inspecting like pipelines, or railways – any kind of infrastructure.

JS: Or even assets, even just counting assets, is one thing I heard, which was interesting.

DR: Almost limitless amount of applications.

JS: Very exciting. Any concluding thoughts on AI and its applications?

DR: Well, it’s very exciting times. I’ve been working in AI for 30 years and finally we see a lot of traction, and we see an explosion of applications and interest and money nonetheless coming into AI. And real applications that are both helpful and exciting.

JS: And do you think AI is being democratized – made available to software developers much more easily?

DR: Yeah, definitely. Today, basically anyone can experiment with AI. Maybe it’s still difficult to make an application that is production-ready if you are not a data scientist because you can fall in many places – you can make a lot of mistakes if you don’t know what you’re doing. But you can experiment and generate something useful in a much easier way than before. So, there’s been a lot of progress around that and there is going to be more progress – I cannot even say in the years to come, just weeks!

JS: Wonderful, it’s been a pleasure talking to you.

DR: Thank you, it’s been a pleasure.

We hope you enjoyed this post. This being our first episode in the series, we are eager to hear your feedback, so please share your thoughts and ideas below.

The AI / ML Blog Team

Resources

Russia has denied any knowledge of a spear phishing attempt that allegedly mimicked the domains of the US Senate and two US-based think tanks.

Russia’s denial came after Microsoft said it detected and shut down the campaign.

“Last week, Microsoft’s Digital Crimes Unit (DCU) successfully executed a court order to disrupt and transfer control of six Internet domains created by a group widely associated with the Russian government and known as Strontium, or alternatively Fancy Bear or APT28,” Microsoft Chief Legal Officer Brad Smith wrote in Microsoft’s announcement Monday. “We have now used this approach 12 times in two years to shut down 84 fake websites associated with this group.”

The domains were apparently meant to mimic those of the International Republican Institute, the Hudson Institute, and US Senate systems. “Attackers want their attacks to look as realistic as possible and they therefore create websites and URLs that look like sites their targeted victims would expect to receive email from or visit,” Microsoft said.

Spear phishing attacks are designed to trick specific people into divulging login credentials or into clicking on malicious links.

Microsoft is “concerned that these and other attempts pose security threats to a broadening array of groups connected with both American political parties in the run-up to the 2018 elections,” Smith wrote.

A Kremlin spokesperson denied any knowledge of the alleged spear-phishing campaign.

“We don’t know which hackers they are talking about, we don’t know what is meant about the impact on elections,” Kremlin spokesperson Dmitry Peskov told CNN. “From the US, we hear that there was not any meddling in the elections. Whom exactly they are talking about, what is the proof, and on what grounds are they reaching such conclusions?”

“We don’t understand, and there is no information, so we treat such allegations accordingly,” Peskov also said.

An unnamed Russian diplomatic source who spoke to Russian news agency Interfax accused Microsoft of “playing political games,” according to Reuters.

Microsoft previously said that earlier this year, it detected and shut down a fake Microsoft domain that was set up by Russian actors as a landing page for phishing attacks against political candidates.

“Pattern mirrors… 2016 election”

The apparent spear phishing attempt announced this week seems to be part of “continued activity targeting… elected officials, politicians, political groups, and think tanks across the political spectrum in the United States,” Microsoft said. “Taken together, this pattern mirrors the type of activity we saw prior to the 2016 election in the United States and the 2017 election in France.”

The six domains that Microsoft took control of were my-iri.org, hudsonorg-my-sharepoint.com, senate.group, adfs-senate.services, adfs-senate.email, and office365-onedrive.com.

Microsoft said it is still trying to determine “what Strontium intended to do with the domains.” Microsoft continued:

Importantly, these domains show a broadening of entities targeted by Strontium’s activities. One appears to mimic the domain of the International Republican Institute, which promotes democratic principles and is led by a notable board of directors, including six Republican senators and a leading senatorial candidate. Another is similar to the domain used by the Hudson Institute, which hosts prominent discussions on topics including cybersecurity, among other important activities. Other domains appear to reference the US Senate but are not specific to particular offices. To be clear, we currently have no evidence these domains were used in any successful attacks before the DCU transferred control of them, nor do we have evidence to indicate the identity of the ultimate targets of any planned attack involving these domains.

International Republican Institute President Daniel Twining said Microsoft’s findings are evidence of Russian meddling.

“This apparent spear phishing attempt against the International Republican Institute and other organizations is consistent with the campaign of meddling that the Kremlin has waged against organizations that support democracy and human rights,” Twining told The Washington Post. “It is clearly designed to sow confusion, conflict, and fear among those who criticize Mr. Putin’s authoritarian regime.”

Microsoft said it is working with the International Republican Institute, Hudson Institute, and other targeted organizations on countering threats to their systems. “We’ve also been monitoring and addressing domain activity with Senate IT staff the past several months, following prior attacks we detected on the staffs of two current senators,” Smith wrote.

Microsoft also said it is offering a new security service to political campaign organizations and to all candidates for federal, state, and local elected offices. The service, AccountGuard, is available at no extra charge to “candidates, campaigns, and related political institutions” that use Office 365, Microsoft said.

Intentionally or not, Microsoft has emerged as a kind of internet cop by devoting considerable resources to thwarting Russian hackers.

The company’s announcement Tuesday that it had identified and forced the removal of fake internet domains mimicking conservative U.S. political institutions triggered alarm on Capitol Hill and led Russian officials to accuse the company of participating in an anti-Russian “witch hunt.”

Microsoft stands virtually alone among tech companies with an aggressive approach that uses U.S. courts to fight computer fraud and seize hacked websites back. In the process, it has acted more like a government detective than a global software giant.

In the case this week, the company did not just accidentally stumble onto a couple of harmless spoof websites. It seized the latest beachhead in an ongoing struggle against Russian hackers who meddled in the 2016 presidential election and a broader, decade-long legal fight to protect Microsoft customers from cybercrime.

“What we’re seeing in the last couple of months appears to be an uptick in activity,” Brad Smith, Microsoft’s president and chief legal officer, said in an interview this week. Microsoft says it caught these particular sites early and that there’s no evidence they were used in hacking.

The Redmond, Washington, company sued the hacking group best known as Fancy Bear in August 2016, saying it was breaking into Microsoft accounts and computer networks and stealing highly sensitive information from customers. The group, Microsoft said, would send “spear-phishing” emails that linked to realistic-looking fake websites in hopes targeted victims — including political and military figures — would click and betray their credentials.

The effort is not just a question of fighting computer fraud but of protecting trademarks and copyright, the company argues.

One email introduced as court evidence in 2016 showed a photo of a mushroom cloud and a link to an article about how Russia-U.S. tensions could trigger World War III. Clicking on the link might expose a user’s computer to infection, hidden spyware or data theft.

An indictment from U.S. special counsel Robert Mueller has tied Fancy Bear to Russia’s main intelligence agency, known as the GRU, and to the 2016 email hacking of both the Democratic National Committee and Democrat Hillary Clinton’s presidential campaign.

Some security experts were skeptical about the publicity surrounding Microsoft’s announcement, worried that it was an overblown reaction to routine surveillance of political organizations — potential cyberespionage honey pots— that never rose to the level of an actual hack.

The company also used its discovery as an opportunity to announce its new free security service to protect U.S. candidates, campaigns and political organizations ahead of the midterm elections.

But Maurice Turner, a senior technologist at the industry-backed Center for Democracy and Technology, said Microsoft is wholly justified in its approach to identifying and publicizing online dangers.

“Microsoft is really setting the standards with how public and how detailed they are with reporting out their actions,” Turner said.

Companies including Microsoft, Google and Amazon are uniquely positioned to do this because their infrastructure and customers are affected. Turner said they “are defending their own hardware and their own software and to some extent defending their own customers.”

Turner said he has not seen anyone in the industry as “out in front and open about” these issues as Microsoft.

As industry leaders, Microsoft’s Windows operating systems had long been prime targets for viruses when in 2008 the company formed its Digital Crimes Unit, an international team of attorneys, investigators and data scientists. The unit became known earlier in this decade for taking down botnets, collections of compromised computers used as tools for financial crimes and denial-of-service attacks that overwhelm their targets with junk data.

Richard Boscovich, a former federal prosecutor and a senior attorney in Microsoft’s digital crimes unit, testified to the Senate in 2014 about how Microsoft used civil litigation as a tactic. Boscovich is also involved in the fight against Fancy Bear, which Microsoft calls Strontium, according to court filings.

To attack botnets, Microsoft would take its fight to courts, suing on the basis of the federal Computer Fraud and Abuse Act and other laws and asking judges for permission to sever the networks’ command-and-control structures.

“Once the court grants permission and Microsoft severs the connection between a cybercriminal and an infected computer, traffic generated by infected computers is either disabled or routed to domains controlled by Microsoft,” Boscovich said in 2014.

He said the process of taking over the accounts, known as “sinkholing,” enabled Microsoft to collect valuable evidence and intelligence used to assist victims.

In the latest action against Fancy Bear, a court order filed Monday allowed Microsoft to seize six new domains, which the company said were either registered or used at some point after April 20.

Smith said this week the company is still investigating how the newly discovered domains might have been used.

A security firm, Trend Micro, identified some of the same fake domains earlier this year. They mimicked U.S. Senate websites, while using standard Microsoft log-in graphics that made them appear legitimate, said Mark Nunnikhoven, Trend Micro’s vice president of cloud research.

Microsoft has good reason to take them down, Nunnikhoven said, because they can hurt its brand reputation. But the efforts also fit into a broader tech industry mission to make the internet safer.

“If consumers are not comfortable and don’t feel safe using digital products,” they will be less likely to use them, Nunnikhoven said.

___

Associated Press Technology Writer Frank Bajak in Boston contributed to this report.