Pentagon worried that China is secretly accelerating investment in Silicon Valley startups

Netease Technology News April 9 news, according to "The New York Times" reported that the Pentagon released a report that China is accelerating investment in emerging Silicon Valley companies, the United States government needs to adopt more stringent control measures to prevent some of the most promising technology is being transferred To China.

The report said that at present, the U.S. government has limited restrictions on investment in U.S. start-ups that focus on artificial intelligence, self-driving, and robotics, and China has used this advantage. The report stated that the Chinese government is strongly encouraging Chinese companies to invest abroad to take the lead in the strategic competition between China and the United States.

The Pentagon pointed out that under certain circumstances, the investment of Chinese companies is very low-key, aiming to evade the supervision of the US government agency, the US Foreign Investment Commission (Cfius).

The report said: "If we allow China to acquire these technologies simultaneously, then we may not only lose technical advantages, but we may even promote China to gain technical advantages."

Such concerns of the Pentagon show that China has gradually caught up with the United States by spending decades to narrow the technological gap between China and the United States. Although this competition is often placed on an economic level, the Pentagon report emphasized its threat to US national security.

In recent years, China has combined domestic subsidies with radical overseas investment to establish its own technical reserves. A government plan called "Made in China 2025" proposed to provide government funding to 10 important industries, which has caused concern in the U.S. and European business groups. At the same time, investments from China that are supported by the government and aimed at obtaining the latest microchip technology have shaken the global semiconductor industry.

The Pentagon report found that business technologies are becoming more and more complicated, and the boundaries of which technologies are used for military purposes and which technologies are used for civilian purposes are blurred. Frequently, the products developed by start-ups and major Internet companies such as Facebook and Google are comparable in complexity to products owned by the military.

The report uses virtual reality technology (VR) as an example: "For example, in terms of complexity, the VR used for the game is comparable to the VR used by our military simulator." The report also said: "Social networking and online shopping Face recognition and image detection techniques used have practical applications in tracking terrorists or other threats to national security.” It added that most of today’s unmanned vehicles and drone technologies were developed by the Pentagon. Funding.

In some cases, these companies that received grants from the Pentagon have raised funds from Chinese investors. For example, after participating in a competition organized by the Pentagon’s Defense Advanced Research Projects Agency (DARPA) in 2005, laser radar manufacturer Velodyne began developing laser sensors for driverless cars. Since then, these sensors have been used for U.S. Navy unmanned ground vehicles.

Last summer, the company received a total investment of 150 million U.S. dollars from Ford and China’s Internet giant Baidu. Baidu declined to comment on the investment.

A spokeswoman for Velodyne stated that this round of financing was the first time the company had obtained external investment.

The spokesperson wrote in an e-mail: "As part of the financing process, the company obtained all the necessary government permits related to the investment. It is emphasized here that these investments are aimed at enabling more advanced LiDAR sensors. More in-depth application to a wider range of industries to develop safer, cheaper driverless cars.”

Former U.S. Secretary of Defense Ashton B. Carter ordered the report to urgently review China’s astonishing penetration of Silicon Valley by senior Pentagon officials, especially those that finance emerging technologies with military uses. .

The Pentagon report found that most American private companies do not understand China's efforts - many of them involve relatively little capital, and Washington does not have a deep understanding of the scale of the issue.

The report stated: "The United States government has not formed an overall view on the speed of technology transfer, China's investment in the U.S. technology industry, or what technologies we should protect."

Michael A. Brown, the former chief executive of Symantec, led the study. The report titled "Crown jewelry that China invests in emerging technologies to enable strategic competitors to obtain US innovation." The New York Times received a copy of the unclassified report.

Carter declined to comment on the final report submitted to U.S. cabinet officials last month.

The report did not mention that those companies specifically accepted Chinese investment, and later discovered that their sensitive technology was transferred to China.

However, the report expressed opposition to Chinese capital's strategy of avoiding US government supervision. For example, the report mentioned venture capital company Canyon Bridge, which was formed to purchase Lattice Semiconductor, a US microchip company. The company has Chinese capital and US management experts. According to the report, the purpose of forming the Canyon Bridge is to cover up the source of capital and to “increase the possibility of the transaction being approved by the US regulatory agency Cfius”.

In this regard, Peter Bridge, a partner of Canyon Bridge, said that just as the talks with Cfius prior to the signing of the deal had indicated, the fund had no intention at all to conceal its sources of funding.

From 2010 to 2016, Chinese investors invested nearly US$30 billion in U.S. startups through more than 1,000 transactions. According to the report, during this period, the proportion of China's participation in risky transactions in the United States rose to approximately 10%, of which 2016 saw an accelerated growth in investment in key industries such as artificial intelligence, robotics, and augmented reality.

(Liu Chun)

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