Cloud computing has become ever more prevalent in people's daily interactions with technology (think Google Drive). The recent growth and proliferation of artificial intelligence has already — and will continue to — increase that prevalence.
End-user spending on public cloud services topped $490 billion last year, according to Gartner. The research firm in April predicted that end-user cloud spend will spike 21.7% to $597.3 billion in 2023. This trend is expected to continue.
Gartner expects that by 2026, 75% of organizations will have shifted to a new digital model "predicated on cloud as the fundamental underlining platform."
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That shift comes as a growing list of businesses are turning to Amazon Web Services (AWS), Google Cloud and Microsoft Azure to run their cloud operations. In 2015, AWS surpassed one million active enterprise users, bringing in $7 billion in revenue.
In the third quarter of 2023, Amazon said that its cloud service earned $23.1 billion in revenue.
This fast-moving transition to the cloud, however, poses a variety of security risks.
When it comes to the cloud, computing hardware — data centers containing racks of chips — becomes a shared resource. When users access their private data, there are several points of inherent vulnerability to that data as it is transported across the cloud.
When a user submits a query to ChatGPT, for example, that information is parsed and processed in the cloud. Even if that data is encrypted while it is in the cloud and while it is in transit from the cloud to the AI model, it necessarily must be decrypted for the chatbot to process it, Chain Reaction co-founder and CEO Alon Webman told TheStreet.
That decryption poses a vulnerability.
Chain Reaction, an Israeli semiconductor startup, is working on commercializing a viable solution to that weakness: Fully Homomorphic Encryption (FHE).
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The value of FHE
With such encryption, the "query is encrypted, the processing is done on encrypted data, the response is encrypted. None of the data was exposed in the process," Webman said.
FHE is the "holy grail of privacy," he added. Current software solutions protect the data when it is in storage and in transit. But not when it needs to be processed.
"The moment you need to process the data, you have to decrypt it. The moment you decrypt it, the data is exposed. Where there's weakness, someone will use it," Webman said.
With FHE, "the data is never exposed. And therefore, the data is not compromised."
Such technology could be applied to a wide variety of uses, ensuring the privacy of the cloud across sectors, including the protection of biometric data. The end-to-end security of data, Webman said, beyond helping to prevent fraud, could enable faster advancements in science and medicine through the secure sharing of larger pools of data.
The idea of Homomorphic Encryption has been around since 1978; though research into the technology has been promising, the hardware required to run it has been too slow for commercial viability.
"There's one problem with the technology: it costs you one million times to run the data on encrypted data versus regular data," Webman said. "We need to accelerate it, and that can be done only on dedicated hardware and only on a new novel processor."
Webman said that Chain Reaction's privacy chips will make FHE viable, ushering in a new age of technology.
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He told TechCrunch in February that Chain Reaction could "become the next Nvidia."
Webman said Chain Reaction is planning to launch its first product in the second half of 2025.
"Our privacy processor is the only solution out there," Webman said.
"We think that every decade there's a technology that requires a new hardware solution," he said. "We think that privacy is an unbelievable technology that the world is waiting for. You will see it in every possible way."
After working in stealth for around six years, Chain Reaction closed a $70 million round of funding in February, bringing its total funds raised to $115 million.
Contact Ian with tips via email, ian.krietzberg@thearenagroup.net, or Signal 732-804-1223.
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