US-Backed VCs Are Funding China's Answer To OpenAI (theinformation.com) 40
A boom in artificial intelligence startup funding sparked by OpenAI has spilled over to China, the world's second-biggest venture capital market. Now American institutional investors are indirectly financing a rash of Chinese AI startups aspiring to be China's answer to OpenAI. From a report: The American investors, including U.S. endowments, back key Chinese VC firms such as Sequoia Capital China, Matrix Partners China, Qiming Venture Partners and Hillhouse Capital Management that are striking local AI startup deals, which haven't been previously reported. U.S. government officials have grown increasingly wary of such investments in Chinese AI as well as semiconductors because they could aid a geopolitical rival. For instance, Sequoia China, the Chinese affiliate of the Silicon Valley VC stalwart, recently made a U.S.-dollar investment in a brand-new AI venture created by Yang Zhilin, a young assistant professor at Beijing's prestigious Tsinghua University, which is sometimes described as China's equivalent of the Massachusetts Institute of Technology, according to a person with direct knowledge of the deal. Yang, who got his doctorate from the School of Computer Science, Carnegie Mellon University, in 2019, is considered one of China's top AI researchers. He previously co-founded another startup Sequoia China backed, Recurrent AI, which develops tools for salespeople, according to the company's website. Matrix and Qiming, meanwhile, recently funded another Beijing-based AI startup, Frontis, which has compared its product to ChatGPT. It was founded in 2021 by Zhou Bowen, a Tsinghua professor who once led JD.com's AI research lab, according to the company's website. The deal gave the startup a paper valuation of hundreds of millions of U.S. dollars, the company said.
What's the alternative? (Score:2)
If we ban such investments, it will cause retaliation, similar to a trade-war, and similar to what's happening with chips.
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What's the alternative is a good question. Capitalists don't like fucking borders, or regulations. Capital wants to be free and help destroy the old feudal order. What's the alternative to capitalism.
Re:What's the alternative? (Score:4, Informative)
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News at 11. Straw username makes straw argument.
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Capitalists don't like fucking borders, or regulations
Capitalists do not like state intervention, except when this is about protecting their wealth.
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Well, if nothing else...let's START by revoking their US citizenship if they have it.
If they are against the US, then they. should lose their US privileges.
Doing something like this is just barely on the grey area before actual treason.
These people are actively helping the enemy.
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> by revoking their US citizenship if they have it.
That would result in revoking retaliation. Same problem.
Re:What's the alternative? (Score:4, Interesting)
Whoa there
1) We are not at war with China - maybe we should be but until Congress says so, they are not 'the enemy'.
2) There isn't a lot of legal provision for involuntary revocation of citizenship. Generally speaking unless you join a foreign military or renouce your own citizen the government can't decide you are not a citizen.. Which is a good thing because that would be a very handy way to strip agitators of all kinds of rights... Not a path you want to go down, I execpt.
Now as far as retaliation and trade wars go, I am all for it. A big question is why are we making aide investments in the worlds second largest economy. Why the heck were NAID funds going to a research lab in Whuan. I don't think there is a very good argument to be made as to how that is promoting the general welfare ... to ourselves and our posterity at least not in fashion where spending those research dollars here in our OWN economy would not have done more..
On the commerical side again not real concerned about the retaliation. Look the types of investmetns. US capital invests in Chinese industry, they get factories, expertise, technology transfers... China does what buys US farm land and mineral rights, long terms we get what for that?
Yeah I don't buy the retaliation argument - because they sure aint going to quit selling cheaps products over here anytime soon. They could try it I suppose in an attempt to create massive price inflation, but the harm they'd do their own economy by taking away the outlet for all that production would be just as devestating (probably more so).
So the problem is the VC guys trying to make a buck - the problem in Washington and the fact we keep electing people with last names like Biden, or McConnell...
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Whoa there
1) We are not at war with China - maybe we should be but until Congress says so, they are not 'the enemy'.
Economic warfare.** Not all are conducted at the point of a gun, but can be. e.g. Taiwan.*
*Head start on their chip initiative (and even if destroyed still cripples everyone else), and like lithium can dictate what the market will be if successfully dominated. The power of Russian sanctions without the Russia. You want chips, bow to this portrait of Xi Jinping.
**Story featured here about their espionage should drive that home.
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And who do they become a citizen of then? They don't just suddenly get exiled into a oblivion. Are you really advocating that we make a bunch of stateless billionaires?
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And what would we lose other than an attack vector and the ability to provide economic and technological benefits to an enemy?
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Promise not to complain about inflation? Less competition usually results in higher prices.
Acting directly against national interests (Score:2, Flamebait)
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I don't get it. What is the "national interest" at play here? Generative AI, like all software, knows no political boundaries. It's not like China is having difficulty funding technology ventures. Heck, they own a large share of the US national debt! They could easily reinvest that money in their own AI ventures. I fail to see the problem.
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This is similar to cryptography export controls. These investors are funding software that will grant these regimes unlimited power over their citizens.
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Yeah and we see just how well those cryptography export controls have worked. What cryptography technology can't the Chinese get their hands on as a result of those controls? Do the controls even matter? Most of the best cryptographic algorithms are open source and a matter of public record.
Dictatorial regimes will find ways to control their people, regardless of export controls. We once thought the internet itself would be a way for oppressed people to gain access to the outside world, but Iran and North K
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And you think it was the export controls that ensured that TLS and PKI don't have back doors?
And you think that TLS and PKI don't have back doors?
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Yes, I think it was export controls that ensured that both TLS and PKI were developed in US/Canada.
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This is similar to cryptography export controls. These investors are funding software that will grant these regimes unlimited power over their citizens.
I think AI is much closer to nuclear weapons than cryptography. I can easily think of dozen offensive means to use LLM AIs. For example, such AI is a significant force multiplier for psychological warfare. Cryptography on other hand is defensive by its very nature.
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To see why this AI isn't as scary as you might be imagining, try this exercise.
Ask ChatgPt:
1. Write SQL to create a table of employees.
2. Write SQL to create a table of users.
3. Write SQL to add a foreign key to link the two tables.
In each case, ChatGPT spits out something very reasonable, and one might say, amazing. At the same time, the answers are just enough *off* target to make it clear that a human database programmer is still needed to get it right.
Military drones use AI already, to fly themselves an
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The limitation I described has nothing to do with algebra. It has more to do with understanding context.
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Does it make sense to help an enemy get stronger?
That's not as simple as you might assume.
First, is China our enemy? We do all kinds of business with China. Many Americans visit and live in China, and many Chinese visit and live in America. Both countries deeply depend on each other economically. There are certainly some areas of disagreement between the two countries, but doesn't that describe our relationship with every country?
Second, even assuming that China is an enemy, what does it mean to help them get stronger? The fact that we purchase billions i
Re: Acting directly against national interests (Score:2)
To the people who are scared of AI (Score:3)
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Why would VCs worry about US national interests? (Score:2)
VCs are worried about exactly one thing: return on investment. They want cash. If they can get that in China, why not?
A positive angle (Score:5, Interesting)
The golden rule of investing: "He who has the gold, makes the rules."
If US investors are investing in Chinese companies, those dollars carry influence with them. If US interests are hurt by these investments, and it starts to make the VCs look bad, or if regulators start snooping around, the VCs are going to have leverage to make the Chinese businesses make changes. Maybe not absolute power, but even Chinese corporations are in it to earn money, and they won't want to lose major investments.
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If US investors are investing in Chinese companies, those dollars carry influence with them.
This is a very naive view of China. CCP opressive rule ensures that Chinese society is unable innovate. Instead, they steal tech from elsewhere. Any influence one might have in China is only as far as CCP sees transactional benefits of continuing the relationships with you. Investment, in traditional sense of this word, is not possible with China as there are no property rights that CCP respects.
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You've never actually known a Chinese businessperson, have you! Just like in the US, they are very focused on making money. Yes, they have to be creative about circumventing the demands of the government (at least, the ones that don't suit them). But they are not dumb, they know who to pay off if they have to. If it were so easy to steal tech from elsewhere, why would they need VC money in the first place?
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You can't make much money just stealing tech. You come to market late, your product is almost always inferior, and consumers see your brand as just a knock-off.
That's why China has been building up universities, and Chinese companies put so much effort into R&D.
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The problem is that one cannot do business in China without doing business with the CCP. Whatever influence an investor may normally have is overwhelmed by the direct authority of the far more powerful CCP. "Well, what if you're on the board of directors?", doesn't matter, the CCP has direct and indirect representatives
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Influence is not absolute power, but the fact that it doesn't always work in every situation, doesn't mean it's non-existent. Those movie franchises, it turns out, didn't feel the "integrity" of their productions was so important that they were unwilling to alter them for the Chinese government. They've been altering movies for the airlines and for broadcast TV for decades, why not for China too?
On the other side of the ledger, as companies have gotten more insistent that their products be made without empl
U.S. government wary of capitalism (Score:3)
U.S. government officials have grown increasingly wary of such investments in Chinese AI as well as semiconductors because they could aid a geopolitical rival
Did they just discover that capitalists are not patriots?