The development process of new technologies has long been a battleground of Foreign Affairs. In an effort to protect its interests, the US government is taking a closer look into foreign, specifically Chinese, investment in emerging technologies like artificial intelligence and machine learning.

The worry is that cutting-edge technologies developed in the United States could be used by China to bolster its military capabilities and perhaps even push it ahead in strategic industries.

The U.S. government is now looking to strengthen the role of the Committee on Foreign Investment in the United States (CFIUS), the inter-agency committee that reviews foreign acquisitions of U.S. companies on national security grounds.

An unreleased Pentagon report, viewed by Reuters, warns that China is skirting U.S. oversight and gaining access to sensitive technology through transactions that currently don’t trigger CFIUS review. Such deals would include joint ventures, minority stakes and early-stage investments in start-ups.

While understandable, this increased scrutiny of foreign investment may put unexpected pressure on companies looking for Chinese investors to participate in their rounds. It will be interesting to see if or how this affects investments in AI firms moving forward.

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Source: Reuters

Didier Weemaels

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