US lawmakers say five top venture capital (VC) firms, including Sequoia Capital, have fueled China’s technological rise with at least US$3 billion of investments in key strategic sectors.
Almost two-thirds of the investment from Sequoia and its peers — including Qualcomm Ventures, Walden International, GSR Ventures and GGV Capital — has gone to Chinese artificial intelligence (AI) companies that have supported the country’s military and enabled human rights abuses, the bipartisan US House Select Committee on China said in a report.
More than US$1 billion has gone to Chinese semiconductor firms, the panel said, as chip technology has become a key geopolitical battleground between Washington and Beijing.
Photo: Bloomberg
Some of the firms criticized the report as outdated or exaggerated. It follows a months-long investigation into years of China investments by the five VC giants.
The lawmakers called out investments into companies like ByteDance Ltd (字節跳動), TikTok’s Chinese parent company, as well as entities that are now blacklisted by the US.
VC firms also invested US$35 million in a Chinese semiconductor firm after it was sanctioned, the report says, without naming the specific firms involved.
Sequoia Capital said in a statement that “we take US national security issues seriously and have always had processes in place to ensure compliance with US law.” It said its Chinese offshoot is now “fully independent” with its own brand, HongShan (紅杉).
“Qualcomm Ventures invests in companies worldwide as part of its engagement with the global technology ecosystem,” spokesperson Christie Thoene said in a statement.
“Qualcomm’s investments are generally small in any given market compared to venture firms and constitute less than 2 percent of the total investments discussed in today’s report,” Thoene said.
The remaining three firms did not respond or could not immediately be reached for comment on the committee’s findings, which were reported earlier by the Wall Street Journal.
The US has been working to curb China’s development of advanced semiconductor technology and AI models, citing the prospect that cutting-edge technology could give Beijing a military edge.
US President Joe Biden has issued restrictions on shipments of chips and chipmaking equipment to China, and is standing up a screening program for US investments in key strategic sectors including AI, semiconductors and quantum computing.
A broad bipartisan effort to codify those investment restrictions failed late last year due to some Republican opposition, and key lawmakers have been meeting over the past several months to try to hash out a deal.
“Decades of investment — including funding, knowledge transfer, and other intangible benefits — from US VCs have helped build and strengthen” China’s priority sectors, the lawmakers wrote in their report.
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Huawei Technologies Co’s (華為) latest smartphones carry a version of the advanced made-in-China processor it revealed last year, results from an independent analysis showed. This underscored the Chinese company’s ability to sustain production of the controversial chip. The Pura 70 series unveiled last week sports the Kirin 9010 processor, research firm TechInsights found during a teardown of the device. This is a newer version of the Kirin 9000s, made by Semiconductor Manufacturing International Corp (SMIC, 中芯) for the Mate 60 Pro, which had alarmed officials in Washington who thought a 7-nanometer chip was beyond China’s capabilities. Huawei has enjoyed a resurgence since
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li