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A new analysis indicates that US investors participated in at least 37% of all investment deals in China’s artificial intelligence (AI) sector between 2015 and 2021.
The Center for Security and Emerging Technology at Georgetown University discovered that $40.2 billion of the total funds raised by Chinese AI businesses during this time period came from the United States. However, the center was unable to identify what percentage of the total originated from U.S. investors versus international investors.
The money went to 251 Chinese AI companies, while 91% of the US investment went to early-stage organizations as venture capital.
According to the research, some of the largest investments include Goldman Sachs’ investment in 1KMXC, an AI-enabled robotics company, and an investment by three U.S.-based venture capital firms in Geek+, an autonomous mobile robot startup.
In recent years, US investments in Chinese AI businesses have been scrutinized as China aims to exploit AI for both civilian and military applications. Analysts believe artificial intelligence will play a vital, “game-changing” role in China’s future military innovation and battle strategy.
The value of US investments in China’s AI sector was notably high. The survey indicated that while US investors participated in only 17% of all global transactions, these transactions accounted for 37% of the total capital.
And despite the fact that US investments in China’s AI sector are modest compared to those of Chinese investors, their benefits can have far-reaching consequences.
The report states, “While Crunchbase data suggests that US outbound investment in Chinese AI companies is limited, such financial activity, commercial links, and the transfer of tacit expertise from US-based funders to target companies in China’s booming AI ecosystem have implications that extend beyond the business sector.” “Early-stage [venture capital] investments can give intangible benefits beyond finance, such as mentorship and coaching, brand recognition, and networking possibilities. Therefore, US export investments in Chinese technology, especially AI, deserve increased monitoring.”
Concerning US investments in the Chinese AI sector, in addition of the possible benefits to the military, is the Communist Party’s control over Chinese enterprises.
According to the China Task Force report, a major project completed by members of Congress in 2020, Chinese businesses “are required to establish CCP [Chinese Communist Party] cells in their operations and support CCP security agencies.” “The CCP integrates its members into all businesses and organizations.”
Chinese espionage, according to US officials, costs the United States upwards of $600 billion each year in stolen intellectual property.
»US corporations are investing billions in China’s AI industry«