A recent study found that between 2015 and 2021, US investors participated in at least 37% of all investment transactions in China’s artificial intelligence (AI) sector.
The Center for Security and Emerging Technology at Georgetown University determined that the United States provided support for $40.2 billion of the total funds raised by all Chinese AI businesses during this time. The center was unable to ascertain whether a greater or lesser portion of that sum came from foreign or American investors.
251 Chinese AI companies received funding, while 91% of the US investment was made as venture capital for earlier-stage enterprises.
The study included three U.S.-based [venture capital] firms’ investment in Geek+, an autonomous mobile robot company, as one of the largest investments. Goldman Sachs also made a solo investment in 1KMXC, a robotics firm with AI capabilities.
Since China wants to employ AI for both military and civilian purposes, U.S. investments in Chinese AI businesses have come under close scrutiny. Analysts predict that artificial intelligence (AI) will be a key, “game-changing” component of Chinese military innovation and future conflict tactics.
The U.S.’s investments in China’s AI industry were particularly profitable. Only 17% of all global transactions involved U.S. investors, but those deals generated 37% of the total investment, the study showed.
Additionally, even though American investments in China’s AI sector are minimal in comparison to Chinese ones, their advantages could have significant effects.
Although Crunchbase data suggests that U.S. outbound investment into Chinese AI companies is relatively low, the report notes that such financial activity, commercial ties, and the tacit knowledge that U.S.-based funders transfer to target companies in China’s booming AI ecosystem have implications that go beyond the business world. Early-stage venture capital investments, in particular, can provide benefits other than financial returns, such as networking opportunities, coaching and mentoring, and brand recognition. In light of this, it is important to pay more attention to and keep track of American investments in Chinese technology, particularly in AI.
A further issue with U.S. investments in the Chinese AI industry, aside from the possibility of military benefits, is the Communist Party’s ability to influence businesses based in China.
Chinese businesses “are compelled to build CCP [Chinese Communist Party] cells in their operations and support CCP security agencies,” according to the China Task Force report, a significant project carried out by members of Congress in 2020. Every business and organization has a CCP member on staff.
According to US officials, Chinese espionage costs the US upwards of $600 billion per year in stolen intellectual property.
Source link
