China is investing in Silicon Valley start-ups with military applications at such a rapid rate that the US government needs tougher controls to stem the transfer of some of the US’ most promising technologies, a Pentagon report says.
There are few restrictions on investing in US start-ups that focus on artificial intelligence, self-driving vehicles and robotics, the report said, and China has taken advantage.
Beijing is encouraging its companies to invest to push China ahead in its competition with the US, the report said.
UNDER THE RADAR
In some instances, Chinese companies have made under-the-radar investments intended to dodge the oversight of the Committee on Foreign Investment in the United States.
“If we allow China access to these same technologies concurrently, then not only may we lose our technological superiority, but we may even be facilitating China’s technological superiority,” the report said.
Such concerns show that China is looming in the US’ rearview mirror after a decades-long campaign by Beijing to close the technological gap between the two nations.
Although the race is often cast in an economic light, the report underlines the national security threat.
BLURRED LINES
The report found that increasingly sophisticated commercial technology has blurred the lines between what is available to military and civilian consumers.
Start-ups and leading Internet companies like Facebook Inc and Google are working on products as sophisticated as anything the military has at its disposal.
“For example, VR [virtual reality] for gaming is at a similar level of sophistication as the VR used in simulators for our armed forces,” the report said.
“Facial recognition and image detection for social networking and online shopping has real application in tracking terrorists or other threats to national security,” the report continued, adding that a lot of autonomous vehicle and drone technology was developed using grants from the Pentagon.
In some cases, companies aided by those grants have since raised money from Chinese investors, the report said.
COMMISSIONED
Former US secretary of defense Ash Carter commissioned the report as an urgent review of what senior Pentagon officials have considered China’s alarming penetration of Silicon Valley, particularly in deals that finance nascent technology with military applications.
The report found that US private industry was mostly unaware of Beijing’s efforts — many of the deals involve relatively small amounts of money — and that Washington did not have a strong understanding of the scale of the issue.
“The US government does not have a holistic view of how fast this technology transfer is occurring, the level of Chinese investment in US technology, or what technologies we should be protecting,” the report said.
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