According to a report, one out of five investments in China’s artificial intelligence industry from 2015 to 2021 came from American investors, including Qualcomm and Intel Corp.

A tech policy organization CSET published the report at Georgetown University. The document comes as American investments in semiconductors, quantum computing, and artificial intelligence are coming under increased scrutiny. Moreover, the US presidency may announce new restrictions on the American funding of tech organizations this year.

The document reveals 167 US investors participated in 401 transactions. This amounted to approximately 17% of investments in AI startups in China. The transactions exceeded $40 billion in investment. They were about 37% of the funds Chinese AI companies raised in six years. 

US firms may be funding the Chinese AI industry

According to the report, GGV Capital led the list of US firms investing in the Chinese AI sector, with 43 investments. Qualcomm and Intel Capital participated in 13 and 11 investments, respectively.

The report claims that GSR Ventures also invested in a Chinese AI company with IFIytek CO Ltd after the speech recognition firm got on US blacklist preventing transactions with US firms. In addition, Wanxiang American Healthcare investments group and Silicon Valley also invested in Chinese AI firms before it also got on the US blacklist. Both companies got on the blacklist for alleged human rights violations in 2019. 

The report also listed Goldman Sachs’ investment in 1KMKC, a robotics company. Additionally, it listed three US-based VC firms which invested in Geek+. However, according to CSET, only one AI company amongst the Chinese beneficiaries of US investments is developing AI applications for public safety or military uses.

Describing it as a transfer of capital and know-how, US technocrats have condemned American investments in the Chinese tech industry. The Biden administration may announce an executive order this year to restrict US investments in critical Chinese technology industries.