Pentagon worried about Chinese investment in US startups: report

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The Pentagon is worried about new American technology firms turning to Chinese companies for investment on potential military applications, The New York Times reported.  

Chinese firms are sending money to U.S. startups, include rocket engine manufacturers, companies that design sensors for autonomous naval ships and printers that make flexible screens that could be used in fighter jets. Many of the Chinese firms making the investments are owned by state-owned companies or have connections to Chinese officials, according to the Times. 

Department of Defense (DOD) officials worry about the investments because they have found that China is encouraging companies with close government ties to invest in U.S. startups specializing in technology that could advance China’s military and its economy, according to a new DOD special report.

The Pentagon sent the report — commissioned before President Trump took office — to senior administration officials this week.

Details on the size of the deals are not available, as startups and their investors are not required to disclose them. 

So far, no startup company or Chinese investors have been accused of any crime.

Trump administration officials and lawmakers are pushing for more scrutiny of China’s trade and economic relationships with the United States, but the Obama administration also kept a close eye on deals.

Former Defense Secretary Ash Carter appointed Mike Brown, the former chief executive of cybersecurity firm Symantec, to lead the inquiry into the Chinese investments.

A spokesman for the Department of Defense told the Times it “will not discuss the details or components of draft internal working documents.”

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