Original subtitles

This week on "Vice,"

a new era of cyber warfare.

What we're talking about here is a total revolution

of the whole concept of war.

What's the significance of the military being a part of all of this?

The Israeli Army is the largest HR Organization in the world.

And then, Japan re-arms itself

for the first time since World War II.

There are hundreds of people here.

They're all pissed off that China keeps encroaching on Japanese territory.

If China really goes for the military action,

the cost they are going to pay is very bloody.

Go, go, go!

We are not animals!

Cyber attacks have gone from a vague threat

to one of the most urgent security problems

in the United States.

During the 2016 presidential election,

the Russian government hacked

the Democratic National Committee

and used the stolen e-mails

to change the course of the campaign.

And just this May,

the largest ransomware attack in history

shut down hundreds of thousands of computer systems

around the world.

More than 150 countries were hit by the attack,

and now are scrambling to fix their defenses.

And while they do so,

one country has emerged

Israel.

We've come to an underground car park just outside Tel Aviv

to meet someone who's gonna show us how easy it is

to launch a cyber attack on almost any modern car.

Just like any connective computer,

everything that you connect to the internet is vulnerable at the end.

So, this is true the same way to cars.

Ziv is using a wireless adapter

that enables internet access to hack into the car's WiFi,

which is now standard on new vehicles.

What's weird about this little experiment we're doing

is that I've got no idea what it is that he's gonna be trying on us.

So, we're gonna start small,

playing a bit with her windows.

He's been putting the windows up and down.

Let's play a bit with her blinkers.

The left indicator's coming on.

The right indicator's coming on.

So, now he's messing with the miles-an-hour thing.

It's going all the way up to 220 kilometers an hour.

The revometer's going all over the place.

This would freak you out if you didn't know it was being done on purpose.

Now he... Now it's completely disabled.

"Engine malfunction."

The fact that he can do all of this means he can very easily

just ram this straight into that wall in front of us.

That experience and the experiment we just did then

is probably the first time where I've thought

hacking could physically cause harm to me.

How many cars in the world

do you think you could do the same thing to right now?

Today, I would say that most of them

are vulnerable or susceptible to hackers' attacks.

Though there aren't any cars made in Israel,

the world's top auto security companies are Israeli,

and they're all part of a wave of cyber innovation

that's sweeping across the country.

Israel's become a world leader in cyber technology,

and all of the Israeli companies

who are at the forefront of that revolution

are inside this building.

There are over 10,000 people here

from all over the world,

and what many of them have come here to hear

is Benjamin Netanyahu,

the Israeli Prime Minister,

laying out why his country

is a global leader in the field.

In fact, Israel receives

more venture capital funds per person

than any other country in the world,

and has become known as the Startup Nation.

To understand how Israel became a global leader in this field,

we spoke with Israeli journalist

and senior defense correspondent

Alon Ben-David.

It's a very small community

that is practically an island.

You are completely surrounded with nations

that you cannot cross through.

Israel developed creativity

to compensate for its lack of resources.

And it is a country that needs to conduct

constant surveillance on their neighbors.

As a country which is under constant

annihilation threat by other nations,

Israel understood many years ago

that going into wars and launching massive military operations,

it bears almost unbearable prices.

First, in human lives, in terms of economic costs,

in terms of international legitimacy.

So cyber was the right answer

for many things that Israel needed to do.

Do you think Israel's...

private cybersecurity industry

is essentially the child of the Israeli military's affairs?

Oh, absolutely. The whole of the Israeli cyber industry

relies on knowledge gathered

by people serving in Israel's different

security agencies in the military.

Military service is mandatory for most Israeli citizens,

and one of the largest parts of the Israeli Defense Force

is its Cyber and Intelligence units.

These entire units, and some 20,000 cyber soldiers,

are now being relocated to Beersheeba,

a desert city which is quickly becoming

Israel's Silicon Valley.

This military-industrial cyber complex

is said to be the largest infrastructure project in Israel's history.

We spoke with the CEO

behind this $5 billion undertaking,

Roni Zehavi.

What's the significance

of the military being a part of all of this?

Because going to the service is compulsory,

you can look at the Israeli Army

as the largest HR Organization in the world.

Because, practically speaking, they'll start scanning

the layers of the Israeli population

and position the right people in the right places,

especially in elite units.

So, if you think about it, you take somebody who is 18 years of age,

and you get them exposed to the state-of-the-art technology,

to the highly advanced paradigms and methodologies,

so when they go out of the service, at the age of 23, 24,

from an IBM point of view, or from EMC point of view,

or from Intel point of view,

somebody has already conducted the screening,

and already selected the best they can get in that sense.

But the initial screening and recruitment process

for the IDF's most elite cyber units

actually begins much earlier.

In 2013, the Ministry of Defense

helped create a national program

for high school students interested in learning more about the realm of cyber.

These after-school classes have become unofficial feeder programs

for the IDF's cyber units.

We met with a recruiter for one of those units, C4I.

We could not reveal her identity

because of her security clearance.

For decades, Unit 8200 was a closely-guarded secret,

partially because this elite cyber and intelligence division

doesn't just provide defense.

In fact, they're responsible

for one of the most aggressive cyber attacks in history.

Stuxnet, a cyber attack

that sabotaged the Iranian nuclear program

by destroying centrifuges

at the Natanz Nuclear Facility,

is widely believed to be a joint operation

of Unit 8200 and the NSA.

And in 2014,

43 former members of 8200

wrote an open letter to the prime minister

refusing to serve because of the unit's

widespread use of surveillance.

We met with one of the soldiers who signed the letter

What's wrong with that? If you're at war

with another people and you've got complete surveillance?

That sounds like quite an advantage.

If someone's cheating on their wife,

and Unit 8200 have discovered this,

what's the benefit of having that information?

It's blackmail.

Despite its shadowy reputation, one thing is clear:

The skills and methods these soldiers learn in 8200

are extremely profitable on the free market.

These veterans have gone on to create tech startups

worth billions of dollars,

and the most prestigious tech companies

actively recruit former 8200 members.

Sharon Nimirovski served in one of the IDF's technological units

before founding a company called White-Hat Limited.

Companies hire his team to attack their systems

to assess and then fix any weaknesses.

So, at the moment, around this table,

your colleagues here are actually attacking

- a company? - They are actually attacking a company.

These days, it only takes an e-mail

to control you. I can send you a PDF file

and when he opens it, he gets a hostile file

installed on his computer.

After he gets it, everything he strokes on his keyboard

is being transferred to the internet.

Every password, every credit card number,

every e-mail you send.

Now, what do you do with that data

after you collect it?

You sell it. You sell it on the darknet.

Everything you just want to know,

you can buy here.

Business profiles,

social security numbers of the employees,

date of birth.

Bronx Hospital in New York,

they stole 34,000 patient records.

Healthcare will be the most

profitable information today.

What's this? That's an e-mail from...

Senator McCain.

John McCain's e-mails are floating around the darknet?

While the origin of Senator McCain's e-mails remains uncertain,

the power of hacked e-mails and data breaches

became abundantly clear during the 2016 election.

President Obama blaming Russia

for interfering in the U.S. elections.

Beyond the risks of data breaches and hacker markets,

potential threats to critical infrastructure,

including physical facilities,

are also becoming indisputable.

We met up with Barak Perelman,

an 8200 vet and founder of INDEGY,

a startup that builds cyber security networks

for industrial facilities that could be vulnerable to hacks.

What happened in the last decade or so

was the interconnectivity between the systems.

"I want access anytime, anywhere, to any place."

- Quite convenient, in theory. - Convenient for the operators

and making it more convenient for the hackers.

The type of control systems

that essentially manage the pumps

and the valves in all of this facility,

were designed 20 years ago, 30 years ago.

They are very easily penetrable.

Very easy to disable them, very easy to manipulate them.

Could you do that? Um, so...

the short answer is yes.

Barak hacked into the reservoir systems

to show us how dangerous a simple piece of malware can be.

First, he shut down the valves which drain the sewage.

Simultaneously, he manipulated the system's display

to indicate that everything was operating normally.

There's not a big red sign saying,

"Alert! You've been hacked." Exactly.

The eventual result of this would be the reservoirs filling up

and having a toxic overflow.

This is theoretical. Can you give me an example

of where this has happened in the real world?

So, I want to refute the fact that it's theoretical,

because as recent as a few months ago,

in the Ukraine, a power grid that was being shut down,

industrial control systems got hacked.

A few years ago, we had reporting by the German government

that a furnace was being blown up in a steel mill

due to a cyber attack.

It's the same industrial control systems.

If I hacked one of them, I can hack, presumably, all the others as well.

This is, without exaggeration,

life-threatening attacks.

If I hack into a pharmaceutical plant

and I change the composure of the drugs.

If I hack into an oil rig and cause an oil spill.

If I create too much pressure in oil pipelines.

All of this is no longer data and privacy issues.

It starts to be safety and life-threatening situations.

I have zero doubt in my mind

that, currently, critical infrastructures

in the Western world

already have malwares inside

just ready for someone to press that red button

and shut off a power grid.

The weapons are loaded, essentially.

I think so. That's exactly the definition I would use.

While cyber security companies

become more and more in demand,

the crippling potential of cyber warfare

only continues to grow.

What we're talking about here is a total revolution

of the whole concept of war.

It changes everything we thought about war

and how it's being conducted, and what are the rules.

And who is the enemy,

and can you recognize the enemy at all?

Many countries have very dangerous cyber tools.

Some are using it viciously, like the Russians,

like the Chinese,

and are not shy of using them against other countries.

We all understand the vulnerabilities of critical infrastructure.

And we all understand the vulnerabilities of privacy.

But what troubles me

is the ability to affect the mindset of masses.

The mindset of the public.

The Russians were manipulating American public mindset.

That's scary. And that, I suspect,

would eventually undermine

most of Western democracies in the coming decade.

I fear that the good 70 years post-World War II

of prospering democracies in the Western world,

and prosperity, economic prosperity,

are over.

After World War II,

the Allies punished Japan

for waging war in Asia

by forcing it to disarm,

and to swear off having offensive military capabilities ever again.

Over time, that pacifism

became part of the Japanese psyche.

But today, nationalism is on the rise around the world

and Japan has not been immune to this political tide.

Tensions are on the rise in the Pacific,

and now Prime Minister Shinzo Abe and his backers

are rethinking his country's previously peaceful stance

and moving to restore Japan's military might.

I'm walking into a survival gaming spot.

It's kind of like paint ball.

It's outside Tokyo

and it's clearly been designed to look like a war zone.

You have all these guys in camo.

It looks like American military gear.

Konichiwa.

For the last 70 years, this is about as close

as any Japanese citizen has come to being in combat.

But if you ask the locals here,

that might be about to change.

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You're mentioning the idea that Japan could be invaded.

Who... who would invade the country?

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The threat from China is so obvious to these guys

because the two countries have a very long, bloody history.

The last time they came to blows was when Japan invaded China

in the run-up to World War II.

After Japan was defeated by the Allies,

they were found guilty of war crimes that included

the killing of millions of Chinese.

The U.S. forced them to adopt a constitution which renounces war,

and banned them from having any offensive military capabilities.

Since then, pacifism has become

a part of post-war Japanese culture,

with the military confined to self-defense only.

But now, that might be changing.

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Today the Japanese parliament approved

a controversial policy to allow its military

to defend allies in other nations,

clearing the way for troop deployments overseas.

This parliamentary resolution

marked a shift towards militarization

that's being pushed by Japan's

Prime Minister, Shinzo Abe.

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Abe and his supporters argue that today,

Japan needs stronger armed forces

to defend themselves from their powerful neighbors

and other global security threats.

Hundreds of thousands of Japanese

have protested Abe's reform efforts,

which they say violate Japan's constitutional commitment to pacifism.

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There are a few thousand people in this protest

and they're all chanting for Prime Minister Abe to resign.

They obviously feel like he's dangerous for the country.

They're legitimately nervous that he could drag the country into war.

Why do you think this bill is dangerous for the country?

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But another loud voice is a growing group

of ultranationalists called Nippon Kaigi...

who have gained a lot of influence inside of Abe's government.

They want to go so far as to change the constitution

to allow for attack-capable forces.

Akira Momochi is the group's

strategic advisor.

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Many people see this, though,

as the first step in preparing Japan to go to war.

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But the line between defense and offense

is starting to blur.

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Japan's 2017 military budget

is its biggest ever.

And the Self-Defense Forces have demonstrated

that they're expanding their capabilities on land

in the air, and at sea.

This is the "Izumo." It's one of Japan's brand-new carriers.

There's a constitutional ban against Japan having aircraft carriers,

and so they actually classify this as a helicopter carrier.

The "Izumo" looks so much like a conventional aircraft carrier

that other countries have complained that it's a violation

of Japan's pacifist commitments.

I'm on top of the outdoor elevator

that brings all of the aircrafts from the hangar

up to the deck.

Critics have said that this carrier

is only called a helicopter carrier

because it's against the constitution to have an aircraft carrier.

What's your reaction to that?

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I've been on a U.S. aircraft carrier before,

and this looks pretty much exactly the same.

Could this transform into a carrier

that could deploy fighter jets like the F-35?

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Not only did the "Izumo's" commander concede

that the ship could be converted into an attack vessel,

but it was also recently deployed alongside an American battleship

in nearby waters as a clear show of strength.

These growing naval capabilities

are exactly what Japan wants to project towards China,

especially when it comes to their intensifying standoff

over a small group of uninhabited islands.

Nationalists from both countries

frequently make their way out to the islands

to plant their country's flag.

One regular visitor is Satoru Mizushima,

an influential conservative Japanese talk show host.

Hello. How are you, Mr. Mizushima?

- Nice to meet you. - Thank you for having me.

Nice to meet you.

Thank you so much. Thank you. Okay.

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Hello, hello. Thank you for having me.

You have a beautiful set here.

Thank you very much.

Uh, behind us we have videos of the Senkaku Islands.

What is your opinion of what's going on there right now

between China and Japan?

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So, do you think it would actually be realistic

that war could break out there between Japan and China?

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This suspicion of an aggressive China

appears to be growing,

as Japanese nationalists

have also taken to the streets

to demand a much stronger stance toward China.

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I'm with a bunch of right-wingers

in the middle of Tokyo.

There are hundreds of people here

and what they're all protesting

is Japan's relationship with China.

They're all pissed off that China keeps encroaching

on Japanese territory.

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We chartered a boat to the Senkakus

to see the disputed territories ourselves.

But the Japanese Coast Guard intercepted our boat

and jumped on board.

Konichiwa.

So first... sure. Oh, first can I just ask you,

um, why... Why did you stop us?

I want to talk to...

To the captain. I understand. Yeah.

Sorry. I'm just trying to understand, 'cause it...

I don't think we're breaking any... breaking any laws.

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The Coast Guard cited an 80-year-old fishing regulation

as grounds to turn us away.

But based on their past actions,

they're concerned that an incident in these waters

could spark an actual conflict.

So much so, that these same Coast Guard vessels

will physically block civilian boats

from reaching the islands.

And the hostility on the water is escalating.

China has been claiming, constructing,

and militarizing islands in the nearby South China Sea,

dangerously amping up tensions with the U.S.

and its allies in Asia.

But if local hostilities did boil over into conflict,

it would have major global consequences

because the original post-war agreements also stipulated

that in return for Japan's pacifism,

the U.S. is legally bound to defend them.

We are committed to the security of Japan

and all areas under its administrative control.

Retired admiral Yoji Koda

was once the commander-in-chief

of Japan's Self Defense Fleet.

He made it clear that if Japan goes to war,

the U.S. is going with them.

One of the fundamental reasons why Japan maintains the U.S.-Japan Alliance,

if anything, the aggression happens toward Japan,

Self-Defense Force role is to repel

those... the invaders.

No more than that. We can't strike their homeland.

Japan fully depends on the strategic deterrence

and strike capability of the United States.

If China really...

goes for the military action,

the cost they are going to pay is very bloody.

They know that.

And Japan has the hardware

and the personnel to exact that cost.

Armed Japanese fighters regularly patrol contested air space,

including over the Senkakus

and they launch whenever they see Chinese planes doing the same,

scrambling their jets more than 1,100 times last year alone.

It's a tense waiting game

between the world's three largest economies,

and it could erupt into hostilities at any time.

The closer they come, the more sensitive we become,

and we send our fighters to say hello.

We will not fire. We will not fire.

We can't.

Unless they fire first.