Report: 37% of Deals to Fund China's AI Sector Included American Investors

U.S. investors have reportedly been involved in a major percentage of all investments into China’s artificial intelligence projects, raising national security concerns. At least 37 percent of the deals for AI projects in the Communist country involved American investors such as Goldman Sachs, whose investment in technologies like AI-enabled robotics could be used by the Chinese military against the United States.

The New York Post writes that according to a recent report by Georgetown University’s Center for Security and Emerging Technology, between 2015 and 2021, US investors participated in at least 37 percent of all investment transactions in China’s AI sector. This comes to $40.2 billion, the majority of which was invested in early-stage companies as venture capital. US officials are concerned about the potential military ramifications of the technology as well as the impact of the Chinese Communist Party on such businesses.

Soldiers of China’s People’s Liberation Army march on Red Square during a military parade (PAVEL GOLOVKIN/POOL/AFP via Getty Images)

David Solomon, Chairman and CEO, Goldman Sachs, speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California. (PATRICK T. FALLON/AFP via Getty Images)

The report by the Georgetown organization shows US investments made up 17 percent of all global transactions but accounted for 37 percent of the total funding. This suggests that US investments are particularly beneficial to Chinese AI firms. One of the most significant investments was made by Goldman Sachs in the AI-enabled robotics company 1KMXC. Three US-based venture capital firms also invested in the autonomous mobile robot company Geek+.

US officials have expressed concern about how US investments in China’s AI industry might affect China’s military. Analysts predict that AI will significantly influence China’s military innovation and future warfare tactics. Furthermore, according to US officials, the US loses intellectual property worth up to $600 billion annually due to Chinese espionage.

The impact of the Chinese Communist Party on Chinese businesses receiving US investments is another major source of worry. Establishing CCP (Chinese Communist Party) cells and supporting CCP security agencies are requirements for Chinese companies. It is also unknown how the CCP’s embedding of its members into every company and organization will impact the businesses receiving US investments.