Unveiling the Surprising Link Between US VCs and Chinese Tech

A congressional investigation has found that American venture capital firms have played a role in funding the growth of China’s semiconductor industry and AI development. The House Select Committee on the China Communist Party (CCP) investigation revealed that five VC funds, including GGV Capital and Sequoia Capital, injected billions of dollars into Chinese AI and semiconductor businesses tied to human rights abuses and the People’s Liberation Army (PLA). The report highlighted that more than $1.9 billion of funding went to AI companies that have been blacklisted by the US government for their support of the Chinese surveillance state and human rights violations. It also claimed that $1.2 billion in funding was provided to 150 semiconductor companies, with particular attention given to Walden International’s support of Semiconductor Manufacturing International Co. (SMIC), China’s leading producer of high-end semiconductors. The investigation also pointed out the “intangible” contributions of VCs, such as consulting and talent acquisition, and called for sectoral investment controls to prevent US capital from flowing to entities that support the PLA or the PRC’s domestic repression or genocide.