TLDR:
– A US congressional panel has found that five American venture capital firms have invested over $3 billion in China’s artificial intelligence and semiconductor industries
– The panel’s report calls for more restrictions on the US financial industry’s ties to China and argues that US investments have helped strengthen China’s priority sectors
A US congressional panel has concluded that five American venture capital firms have invested a combined total of over $3 billion in China’s artificial intelligence and semiconductor industries, according to a report released on Thursday. The report, which was issued by the US House select committee on the Chinese Communist Party, names the five firms as GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital, and Walden International. The investigation found that the companies have invested more than $1.9 billion in Chinese AI companies, including over $1 billion in ByteDance, the parent company of TikTok. The report also states that more than $1 billion has gone to over 150 semiconductor companies in China, including over $50 million to Semiconductor Manufacturing International Corporation (SMIC), the mainland’s largest semiconductor foundry company. The lawmakers argue that the investments made by US venture capital firms have helped build and strengthen China’s priority sectors, calling for more restrictions on the US financial industry’s ties to the country. The report also identifies other Chinese tech companies that have received investments from the five US VC firms, including AI developers Megvii and SenseTime, which are alleged to be involved in surveillance of Uygurs, an ethnic minority group in China’s Xinjiang Uygur autonomous region. The report recommends Washington to immediately restrict US investment in entities sanctioned or red-flagged by the US government for ties to the Chinese military or forced labor and genocide. Additionally, it suggests implementing further outbound investment restrictions related to China’s critical and emerging technologies, military capabilities, and human rights. The findings follow US President Joe Biden’s executive order in August that prohibited US private equity and venture capital investments from going into four Chinese tech sectors, including AI and semiconductors.
