US investors poured billions of dollars into China’s artificial intelligence (AI) companies between 2015 and 2021, including some that were sanctioned by the US government, according to a report released on Wednesday.
Backers from the United States, which included the investment arms of Intel and Qualcomm, accounted for nearly a fifth of investments in the China AI sector.
The report, released by CSET, a tech policy group at Georgetown University, comes amid growing scrutiny of US investments in AI, quantum computing and semiconductors. It is based on information from data provider Crunchbase.
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167 investors from the US took part in 401 transactions, the report said. They made up for 17% of the investments into Chinese AI companies in the period.
Those transactions represented a total $40.2 billion in investment, the report said. That would account for 37% of the total raised by Chinese AI companies in the six-year period.
It was not clear from the report what percentage of the funding came from Intel or Qualcomm.
Qualcomm Ventures and Intel Capital were involved in 13 and 11 investments in Chinese AI companies respectively. GGV Capital led investments by US firms in the sector.
Investments in sanctioned AI firms
US investor GSR Ventures invested alongside China’s IFlytek in a Chinese AI company after the speech recognition firm was added to a trade blacklist, the report showed.
Silicon Valley Bank and Wanxiang American Healthcare investments group made investments in Chinese AI firms alongside China’s Sensetime before the facial recognition technology powerhouse was added to the same trade blacklist.
The US added both companies to its ‘Entity List‘ in 2019 for alleged human rights violations of Uighur Muslims. That effectively barred them from receiving US tech exports.
Some of the largest investments include Goldman Sachs’ solo investment in 1KMXC, an AI-enabled robotics company. Another was an investment by three US-based VC firms in Geek+, an autonomous mobile robot company, the report showed.
Only one Chinese AI company that received funding from US investors is involved in developing AI applications for military or public safety uses, according to CSET.
The Biden administration plans to unveil an executive order this year to curb some US investments in sensitive Chinese tech industries.
Hawks in Washington blame American investors for transferring capital and valuable know-how to Chinese tech companies. It could help advance Beijing’s military capabilities, they say.
- Reuters, with additional editing by Vishakha Saxena
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