The U.S. government expanded its trade blacklist to include some of China's top artificial intelligence startups, punishing Beijing for its treatment of Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week. The decision, almost certain to draw a sharp response from Beijing, targets 20 Chinese public security bureaus and eight companies including video surveillance firm Hikvision, as well as leaders in facial recognition technology SenseTime Group Ltd and Megvii Technology Ltd. The action bars the firms from buying components from U.S. companies without U.S. government approval – a potentially crippling move. It follows the same blueprint used by Washington in its attempt to limit the influence of Huawei Technologies for what it says are national security reasons. U.S. officials said the action was not tied to this week's resumption of trade talks with China, but it signals no let-up in U.S. President Donald Trump's hard-line stance as the world's two biggest economies seek to end their 15-month trade war.
Washington this week targeted Chinese facial recognition startups SenseTime, Megvii and Yitu over national security concerns and foreign policy interests, aggravating the clash between the two economic superpowers over who will dominate the technologies of the future. SenseTime is the second-most valuable artificial intelligence startup in the world, with investments from tech giants SoftBank (SFTBF) and Alibaba (BABA) and a private market valuation of $7.5 billion, according to CB Insights. Megvii and Yitu are worth $4 billion and $2.4 billion respectively, according to CB Insights. The three tech startups, along with a handful of other Chinese firms like AI-driven surveillance camera maker Hikvision and voice recognition firm iFlyTek, are now banned from buying US products or importing American technology. The US Commerce Department added them to a trade blacklist this week, saying the companies had been implicated in human rights violations against Uyghurs and other members of Muslim minority groups in Xinjiang.
In part 2 of China in AI, we look at how the biggest companies in China are positioning themselves to become global leaders in smart city solutions, autonomous driving, conversational AI, and predictive healthcare. China's internet may be sandboxed from the rest of the world, but China's big tech companies are bringing their AI capabilities to the global market. Tencent, Baidu, and Alibaba (collectively called BAT) are positioning themselves to become the AI platforms of the future. Join us for a live briefing as we dive into the Chinese government's AI strategy, what tech giants like Alibaba and Tencent are doing, startup activity, and much more. Tencent, which runs WeChat, has access to over 1B users on its platform, while Baidu is the country's largest search provider, and Alibaba is its biggest e-commerce platform. In addition, all 3 offer services well beyond their core products, and like the biggest tech giants in the US have far-reaching global ambitions. BAT is expanding into other countries in Asia, recruiting US talent and investing in US AI startups, and forming global partnerships to advance smart city solutions, autonomous driving, conversational AI, and predictive healthcare, among other initiatives.
The US Commerce Department added them to a trade blacklist this week, saying the companies had been implicated in human rights violations against Uyghurs and other members of Muslim minority groups in Xinjiang. Twenty government and security bureaus in China's Xinjiang region were also included in the ban. Chinese authorities dismissed the human rights allegations, and threatened retaliation against US companies. "The US accusations against China are groundless and senseless. They only expose the evil motives of the United States to interfere with counterterrorism efforts in Xinjiang and thwart China's development," China's Foreign Ministry spokesman Geng Shuang said on Tuesday, telling reporters to "stay tuned" for retaliation.