A new congressional report found that investments from five well-known American venture capital firms (VCs) into China’s artificial intelligence (AI) and semiconductor companies have fueled the growth of China’s military capability and the Communist Party’s digital authoritarianism against its people while undercutting America’s strategic technology advantage over China.
When China debuted its “Made in China 2025” industrial plan in 2015, it announced its ambition of achieving global dominance in high-tech manufacturing within a decade. The Chinese Communist Party (CCP) knew that the nation that enjoys dominance in the high-tech sector would dominate the world. Since the release of its 10-year plan, China seems to be on track to achieve its goal: The nation’s global share of the AI industry is projected to exceed 30 percent in 2035, and China’s rapid progress in chip manufacturing leads many observers to expect the nation will soon dominate the global semiconductor market.
The CCP always credits its leadership and home-grown ingenuity for China’s explosive technological advancement. However, according to findings by the U.S. House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party, it was decades of investments from American venture capital firms, including “funding, knowledge transfer, and other intangible benefits,” that “have helped build and strengthen the PRC’s priority sectors.”
Last week, the committee released a report titled “The CCP’s Investors: How American Venture Capital Fuels the PRC Military and Human Rights Abuses.” It found five American-headquartered VCs, including Sequoia Capital and Qualcomm Ventures, have made investments worth “at least $3
