VCs Face Fresh Scrutiny Over China Investments as Geopolitical Pressures Build
- A new report from the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP) highlighted the investments of five US VC funds in Chinese tech companies, particularly in sectors that are significant for national defense.
- The report targeted GGV Capital, Sequoia, Walden International, GSR Ventures, and Qualcomm Ventures, criticizing them for allegedly ignoring how their portfolio companies facilitated repressive domestic policies and for supporting Chinese government initiatives in critical areas like chips and AI.
- The report details how each of the five firms financed China’s cutting-edge facial recognition companies, even as the technologies were widely deployed in the government’s expansive surveillance efforts, including the repression of the Uyghur minority.
- The US Congress is singling out VCs for helping a primary geopolitical rival develop technology that could help it wage military or cyber-warfare against the US or its allies.
- VCs investing in China face increasing backlash as the US government ramped up restrictions on American investment in Chinese companies.
- Blockade of US money could leave an opening for autocratic Gulf states to fill the gap.
VCs investing in China are facing fresh scrutiny from the US Congress due to geopolitical pressures and concerns of national security. A new report by the House Select Committee on the Strategic Competition Between the United States and the CCP highlights the investments of five US VC firms in Chinese tech companies, particularly in AI, semiconductors, and facial recognition technology. The report criticizes the firms for allegedly ignoring how their portfolio companies facilitated repressive domestic policies and for supporting Chinese government initiatives aimed at catching up to the US in critical areas like chips and AI. The report also discusses how the firms financed facial recognition companies that were deployed in the Chinese government’s surveillance efforts, including the repression of the Uyghur minority. It singles out GGV Capital, Sequoia, Walden International, GSR Ventures, and Qualcomm Ventures as the main targets. The US government’s increasing restrictions on American investment in Chinese companies have prompted a backlash against VCs investing in China, with concerns that their investments may aid China in military or cyber warfare against the US or its allies. However, pulling back US investment may create openings for autocratic Gulf states to fill the gap.
