US venture capital firms have sunk at least $3 billion in Chinese tech companies that have aided the Communist government and its military — as well as the ongoing genocide against Uyghur Muslims in Xinjiang, according to a Thursday report from a bipartisan House panel.
The House Select Committee on the Chinese Communist Party (CCP) released findings from its probe of five firms that supported Beijing’s military, enabled human rights abuses and boosted China’s semiconductor sector, Chairman Mike Gallagher (R-Wis.) and Ranking Member Raja Krishnamoorthi (D-Ill.) said.
The investments by GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital China and Walden International totaled more than $1.9 billion in Chinese artificial intelligence companies and $1 billion in more than 150 semiconductor firms.
But the lawmakers say their findings “merely scratched the surface of the danger that American investment into Chinese industry poses to our national security.”
“The Committee’s findings suggest that there are billions of dollars beyond those captured in this report that have flowed into PRC companies that support the PRC’s military, digital authoritarianism, and efforts to develop technological supremacy and undermine American technological leadership,” Gallagher and Krishnamoorthi wrote in the 66-page report.
“The status quo is untenable,” they added. “Decades of investment—including funding, knowledge transfer, and other intangible benefits—from U.S. VCs have helped build and strengthen the PRC’s priority sectors.”
Both lawmakers are calling for the US to restrict investments in Chinese entities already sanctioned or flagged by the federal government for having ties to the People’s Liberation Army, forced labor camps or genocide.
They are also demanding other restrictions that build on President Biden’s Aug. 9, 2023, executive order to ban some outbound US investments that help China’s development of military, intelligence, surveillance and cyber technologies.
One-third of the venture firms’ investments went to ByteDance, the parent company of the social media platform TikTok, which is under investigation by the Justice Department for allegedly spying on American citizens.
China hawks have long warned the company poses a national security threat.
The report also notes that more than $130 million from US venture firms went toward Chinese AI companies that have been blacklisted by the federal government.
Those companies have created AI programs for autonomous Chinese weapons systems, collected genetic data from US citizens and created facial recognition technology that is used in Xinjiang against Uyghurs.
On Oct. 16, 2022, Chinese President Xi Jinping delivered a speech pledging to “resolutely win the battle of key and core technologies” by building a “great wall of steel” that would allow his nation to be a world leader in science and technology innovations.
Gallagher and Krishnamoorthi said in a summary of their findings that Americans are unaware their “retirement accounts are invested in these five venture capital firms,” which “are contributing part of their hard-earned paycheck to it furthering the Chinese Communist Party’s authoritarian ambitions.”
“Coupled with their checkbooks, these five venture capital firms provided Chinese AI and semiconductor companies with expertise, global networks, reputational benefits, and access to global talent,” they added.
“Without these critical US investments, would the CCP have been able to build world-class semiconductor and AI sectors in China?”
The Post has reached out to all five firms for comment.