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Silicon Valley steps up measures against Chinese capital.
The US National Counterintelligence and Security Center (NCSC) has issued a warning to tech startups about the risks associated with foreign investment. According to the NCSC statement, foreign countries, in particular China, use investment mechanisms to gain access to confidential data and technologies, which may pose a threat to US national security.
In recent months, Silicon Valley companies have stepped up screening of staff and potential employees due to the threat of Chinese espionage. In some cases, American investors have even demanded that startups they support abandon Chinese capital.
The NCSC has distributed a bulletin to U.S. companies warning that "foreign threat actors" may use private investment, such as venture capital and private equity, to exploit technology startups, potentially threatening economic and national security.
NCSC director Michael Casey said startups face risks when seeking potential foreign investment to expand their firms. He noted that U.S. adversaries continue to use early-stage investments in American startups to gain access to their sensitive data. These actions threaten the economic and national security of the United States and can directly lead to the collapse of these companies.
The bulletin states that hostile foreign groups can take advantage of startups ' financial difficulties to gain access to their intellectual property, and can obtain confidential data "under the pretext of a trustworthiness check before investing."
Rapid advances in artificial intelligence over the past 18 months have raised growing concerns among the industry and the U.S. government about attempts by Chinese intelligence agencies to steal technology.
The NCSC bulletin does not specifically mention Beijing. However, it highlights that Chinese venture capital investments are focused on promising U.S. sectors such as artificial intelligence, which is a priority for the Chinese government.
The document focuses on IDG Capital, a Chinese investment company recognized by the US Department of Defense as a military company that has invested in more than 1,600 enterprises, including American ones.
Washington and Beijing are locked in a growing strategic rivalry, with the United States imposing export restrictions to make it harder for China to access and develop cutting-edge technologies, including artificial intelligence and state-of-the-art microchips.
The bulletin warns about strategies used by foreign actors to conceal their intentions and ownership structure. These include channeling investments through intermediaries in the United States or abroad, and developing investment schemes to avoid inspections by the Committee on Foreign Investment in the United States (CFIUS), an interagency group that checks incoming investments for security risks.
A partner at one of the Silicon Valley venture funds noted that many startups in desperate need of capital are willing to take risks in order to stand out and get funding.
Greg Levesque, CEO of Strider Technologies, which protects companies from espionage, added that China is successfully using the model of access to advanced technologies, copying them while startups are at an early stage of development.
According to the bulletin, foreign actors can also target startups that have contracts with the US government, threatening national security. The NCSC warns that such schemes can lead to the collapse of startups if foreign investors receive confidential data and use it to compete with American companies. The document mentions the case of a British company that was on the verge of bankruptcy after transferring intellectual property to a Chinese investor as part of a failed transaction.
The bulletin calls on startups to take measures to protect themselves from potentially unscrupulous actors, including protecting critical assets and restricting data provided to investors.
Washington has recently identified other threats to intelligence from Beijing. In June, the United States, Britain, Canada, Australia and New Zealand jointly warned that the Chinese People's Liberation Army was actively recruiting Western pilots to train its own military pilots.
Source
The US National Counterintelligence and Security Center (NCSC) has issued a warning to tech startups about the risks associated with foreign investment. According to the NCSC statement, foreign countries, in particular China, use investment mechanisms to gain access to confidential data and technologies, which may pose a threat to US national security.
In recent months, Silicon Valley companies have stepped up screening of staff and potential employees due to the threat of Chinese espionage. In some cases, American investors have even demanded that startups they support abandon Chinese capital.
The NCSC has distributed a bulletin to U.S. companies warning that "foreign threat actors" may use private investment, such as venture capital and private equity, to exploit technology startups, potentially threatening economic and national security.
NCSC director Michael Casey said startups face risks when seeking potential foreign investment to expand their firms. He noted that U.S. adversaries continue to use early-stage investments in American startups to gain access to their sensitive data. These actions threaten the economic and national security of the United States and can directly lead to the collapse of these companies.
The bulletin states that hostile foreign groups can take advantage of startups ' financial difficulties to gain access to their intellectual property, and can obtain confidential data "under the pretext of a trustworthiness check before investing."
Rapid advances in artificial intelligence over the past 18 months have raised growing concerns among the industry and the U.S. government about attempts by Chinese intelligence agencies to steal technology.
The NCSC bulletin does not specifically mention Beijing. However, it highlights that Chinese venture capital investments are focused on promising U.S. sectors such as artificial intelligence, which is a priority for the Chinese government.
The document focuses on IDG Capital, a Chinese investment company recognized by the US Department of Defense as a military company that has invested in more than 1,600 enterprises, including American ones.
Washington and Beijing are locked in a growing strategic rivalry, with the United States imposing export restrictions to make it harder for China to access and develop cutting-edge technologies, including artificial intelligence and state-of-the-art microchips.
The bulletin warns about strategies used by foreign actors to conceal their intentions and ownership structure. These include channeling investments through intermediaries in the United States or abroad, and developing investment schemes to avoid inspections by the Committee on Foreign Investment in the United States (CFIUS), an interagency group that checks incoming investments for security risks.
A partner at one of the Silicon Valley venture funds noted that many startups in desperate need of capital are willing to take risks in order to stand out and get funding.
Greg Levesque, CEO of Strider Technologies, which protects companies from espionage, added that China is successfully using the model of access to advanced technologies, copying them while startups are at an early stage of development.
According to the bulletin, foreign actors can also target startups that have contracts with the US government, threatening national security. The NCSC warns that such schemes can lead to the collapse of startups if foreign investors receive confidential data and use it to compete with American companies. The document mentions the case of a British company that was on the verge of bankruptcy after transferring intellectual property to a Chinese investor as part of a failed transaction.
The bulletin calls on startups to take measures to protect themselves from potentially unscrupulous actors, including protecting critical assets and restricting data provided to investors.
Washington has recently identified other threats to intelligence from Beijing. In June, the United States, Britain, Canada, Australia and New Zealand jointly warned that the Chinese People's Liberation Army was actively recruiting Western pilots to train its own military pilots.
Source
