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China panel probes AI, chip funding

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Jul 19, 2023
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Illustration: Allie Carl/Axios

A bipartisan duo has launched investigations into U.S. venture capital funds investing in Chinese artificial intelligence and semiconductor companies.

What's happening: China Select Committee Chair Mike Gallagher and ranking member Raja Krishnamoorthi on Tuesday requested detailed information from GGV, GSR, Walden and Qualcomm Ventures, a committee spokesperson told Axios.

  • The lawmakers take issue with investing in China-based companies that aid the Chinese government in human rights abuses, such as Uyghur surveillance, and military modernization.
  • In letters to each VC fund, Gallagher and Krishnamoorthi ask for information on how much money has been invested in each Chinese company and when, as well as any national security risk factors identified.
  • The lawmakers also ask the funds to hand over any documents relevant to the Chinese government's role or influence at the company its investing in.
  • The VC firms did not immediately respond to a request for comment.

Why it matters: Lawmakers are increasingly finding it unacceptable for U.S. companies to do business with China — especially when it comes to critical, emerging technology — despite the country being a huge market.

What's next: The companies have until Aug. 1 to answer the lawmakers' questions.

  • This is the first in a series of investigations into the relationship between investors and China the committee plans to pursue.
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