TLDR:
- Five top venture capital firms, including Sequoia Capital, have invested at least $3 billion in key strategic sectors in China, fueling the country’s technological rise, according to a report by the US House Select Committee on China.
- Almost two-thirds of the investments from these firms have gone to Chinese AI companies that have supported the military and enabled human rights abuses.
- More than $1 billion has gone to Chinese semiconductor firms, as chip technology has become a key geopolitical battleground between the US and China.
A US House report has accused five top venture capital firms, including Sequoia Capital, of fueling China’s technological rise with investments in key strategic sectors. According to the bipartisan House Select Committee on China, the majority of these investments have gone to Chinese AI companies that have supported the country’s military and enabled human rights abuses. The report also highlighted that more than $1 billion has gone to Chinese semiconductor firms, as chip technology has become a significant geopolitical battleground between the US and China. Some of the firms criticized the report as outdated or exaggerated, while others did not respond to the findings.
The US has been taking steps to curb China’s development of advanced semiconductor technology and AI models, citing national security concerns. President Joe Biden has issued restrictions on shipments of chips and chipmaking equipment to China, as well as establishing a screening program for US investments in key strategic sectors. However, a bipartisan effort to codify these investment restrictions failed last year.
The report emphasizes the decades of investment by US venture capital firms in China’s priority sectors, which have contributed to China’s technological rise. The lawmakers argue that these investments have provided funding, knowledge transfer, and other intangible benefits to China.
