"Five US VCs Invest 4 Trillion Won Over Decades in Chinese AI and Semiconductors"

Five American venture capital (VC) firms have invested a total of more than $3 billion (approximately 4 trillion KRW) over several decades in China's artificial intelligence (AI) and semiconductor sectors.

According to the South China Morning Post (SCMP) in Hong Kong on the 9th, the U.S. House of Representatives' China Communist Party Special Committee revealed this in a report published on the 8th (local time).

The report explained that five VC firms?GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital, and Walden International?have invested more than $1.9 billion (about 2.5 trillion KRW) in Chinese AI companies, with over $1 billion (approximately 1.3 trillion KRW) invested in ByteDance, the parent company of TikTok.

Additionally, these firms invested more than $50 million (about 66.7 billion KRW) in SMIC, China's largest foundry (semiconductor contract manufacturer). Including this, they have invested over $1 billion in more than 150 Chinese semiconductor companies.

SMIC has been on the U.S. government's trade restriction list since 2020 and is subject to export controls. The committee pointed out, "Decades of investment from U.S. VCs, including funding, knowledge transfer, and other intangible benefits, have helped China build and strengthen its priority sectors," and added, "Simply put, strong investment restrictions to China in key strategic sectors are vital for national security and human rights."

The report also stated that besides SMIC, Chinese companies that have received investments from these VCs and are on the U.S. blacklist include AI firms SenseTime and Kuangshi Technology. The U.S. government has sanctioned all these companies for allegedly supporting the repression of ethnic minorities in the Xinjiang Uygur Autonomous Region of China. They contributed to Chinese public security authorities by using AI technologies such as facial recognition and video analysis to identify specific Uygurs within crowds.

Furthermore, the committee recommended that the U.S. government immediately restrict investments in companies sanctioned or flagged by the U.S. government due to connections with the People's Liberation Army, forced labor, or genocide. It also urged the implementation of additional restrictions on foreign investments in China's core and emerging technologies, military capabilities, and human rights-related sectors.

Meanwhile, U.S. President Joe Biden issued an executive order last August regulating investments by American capital, including private equity and VCs, in China's advanced semiconductor, quantum computing, AI, and microelectronics sectors. Regarding this, Liu Fengyu, spokesperson for the Chinese Embassy in the U.S., criticized the report to SCMP, saying, "The U.S. government politicizes, instrumentalizes, and weaponizes trade and technology issues."

This content was produced with the assistance of AI translation services.