The US government has warned that the country’s cutting-edge technology industry is becoming a target for intellectual property theft and infiltration by the Chinese Communist Party (CCP). In response to the CCP’s espionage threats, tech companies in Silicon Valley are enhancing security screenings for employees and potential hires.
According to a report by the Financial Times, insiders have revealed that tech giants like Google and notable startups like OpenAI have ramped up security screenings for their employees.
Venture capital firms like Sequoia Capital are also urging some of their portfolio companies to intensify employee screenings, as they have been warned by the US government that spy agencies are targeting American tech developers.
With the US tightening export controls on China, the CCP is finding it increasingly difficult to access and develop cutting-edge technologies, including artificial intelligence and advanced chips. As a result, the CCP has set its sights on American tech research companies and tech personnel.
While the US government strengthens security measures, it has been issuing warnings to companies about the CCP’s espionage threats over the past two years.
Cases of CCP espionage can be traced back several decades, but it appears to have increased exponentially in recent years. In March of this year, the US Department of Justice charged a former Google software engineer with stealing commercial secrets related to artificial intelligence and engaging in secret collaboration with two Chinese companies.
The US government has stated that in the past five years, companies like Tesla, Micron, and Motorola have all fallen victim to egregious intellectual property theft by the CCP.
The CEO of US defense industry data analytics contractor Palantir, Alex Karp, described the CCP’s espionage activities targeting American tech companies as a “significant problem,” especially for manufacturers of corporate software, large language models, and weapon systems.
After leaving the political arena, former US National Security Advisor H.R. McMaster has provided advice to tech and investment firms on foreign espionage risks. He emphasized that threats from Chinese intelligence agencies are “absolutely real and ongoing.”
McMaster stated, “Companies I’ve spoken with and collaborated with are now very aware of this and are making every effort to mitigate this threat.”
Google stated that the company has “strict safeguards in place to prevent the theft of our confidential business information and trade secrets.”
Sequoia and OpenAI did not respond to requests for comments from the Financial Times.
Bill Priestap, former head of the FBI’s counterespionage division and current operator of a consulting firm called Trenchcoat Advisors, advises on “man-made risks” from foreign adversaries. He highlighted numerous cases where foreign intelligence agencies exploited American corporate employees to steal valuable assets.
Priestap remarked, “Some employers have realized that when recruiting employees, they must understand if there are any vulnerabilities to be aware of. Simply maintaining contacts with certain countries can make individuals susceptible to exploitation, even if they do not intend harm to the company.”
Some private companies have started providing strategic intelligence to US enterprises regarding the CCP espionage threat.
Security firm Strider Technologies offers a data tool to companies to prevent certain countries from targeting their employees and infiltrating third-party suppliers and vendors.
Greg Levesque, co-founder of Strider, mentioned that the adoption of their tool has seen an increase among startups engaged in emerging technologies such as quantum computing, artificial intelligence, and synthetic biology.
Strider’s system uses artificial intelligence to gather data on how foreign intelligence agencies approach companies and their employees. For example, it tracks hundreds of Chinese talent recruitment programs that aim to recruit foreign scientists and professors to lure them into stealing technology to advance the CCP’s military and economic objectives.
If an individual is flagged by Strider’s system, the company can conduct additional screening, such as investigating the person’s family or financial ties abroad and examining their travel history to the country where the intelligence agency is based.
Levesque added, “We’ve seen this across the Fortune 500. Everyone is being targeted.”
During Trump’s administration, the US initiated a program called the “China Initiative.” Following the implementation of this measure, individuals like Harvard University chemistry professor Charles Lieber were convicted.
Lieber was discovered to have clandestinely accepted funds from the CCP through a state-supported program designed to help the CCP gain access to advanced technology and expertise in the US and other regions.
In November last year, FBI Director Christopher Wray, along with counterparts from the Five Eyes intelligence alliance countries, held a public event in Silicon Valley. Wray urged tech companies to “confront” unprecedented threats from the CCP.
Silicon Valley groups participating in US Department of Defense bid contracts have been encouraged to expand the scope and scale of due diligence investigations into CCP espionage threats. All commercial tech companies working with the US defense agencies are required to implement strict security measures.
Former US National Security Advisor H.R. McMaster, also a retired US Army lieutenant general, stated, “The vast majority of research affecting national security used to be government projects, and now it’s in the private sector, which makes these companies indeed potential lucrative targets from the Chinese perspective.”