China Makes a Big Play In Silicon Valley

An anonymous reader quotes a report from NPR: The Chinese government has been forming global partnerships with Western think tanks, recruiting key talent at networking events sponsored by the Chinese government and working with U.S. universities, says Michael Brown, managing director of the Pentagon’s Defense Innovation Unit in Mountain View, Calif. The unit was set up in 2015 to help the U.S. military capitalize on emerging commercial technologies. And, he notes, there is serious concern in Washington that China could acquire too much sensitive U.S. technology and transfer it back home.

Adam Lysenko, a senior analyst at Rhodium Group, an economic research firm, says American entities represent the largest venture capital investment in startup technology companies, but Chinese investment accounts for about 15 percent of the deals. In the past eight years, there were more than 1,300 rounds of funding for U.S. startups with at least one Chinese investor, Lysenko says, totaling about $11 billion of Chinese investment. After a record 2017, Rhodium Group predicts 2018 will be another record year for Chinese venture capital into U.S. startups. Lysenko says this has become a concern in national security circles because the nature of emerging technology is inherently dual-use: The artificial intelligence algorithms that help speed up your smartphone could also be applied to weapons on the battlefield.

China’s quest for innovation and know-how can best be illustrated by the offices of Baidu — China’s largest internet provider and Google’s rival — which is located right next to a Google complex. “Baidu opened its innovation center, called the Institute of Deep Learning, four years ago, with a focus on a self-driving vehicle called Apollo,” reports NPR. “Other Chinese tech powerhouses — Alibaba, Tencent and Huawei — also have Silicon Valley research and development centers. Instead of buying an existing U.S. business, these Chinese tech giants come to the U.S. and build new companies from the ground up, in what’s known as ‘greenfield‘ investments. [T]hese Chinese tech companies hire away a lot of U.S. employees who might otherwise work for American businesses.”