Jacob Windle’s Post

“The U.S. has finalized rules to restrict certain American investments in mainland China, Hong Kong and Macao in high-tech sectors including artificial intelligence, semiconductors and quantum technology. The final rules, published by the Department of the Treasury on Monday, prohibit U.S. individuals from making certain transactions related to semiconductors and microelectronics, quantum information technologies and AI, or requires them to notify the Treasury when making such transactions. The restrictions, which follow U.S. President Joe Biden’s executive order signed in August of 2023, will go into effect on Jan. 2. Notable among the final rules is the definition of ‘U.S. persons’ to include not only U.S. entities and citizens but also permanent residents of the country, potentially leading to massive disruptions to China tech and investment circles. Haigui — returnees who have studied and worked overseas — have long been viewed as crucial to China’s tech and finance sectors.” “Many such executives and talents hold U.S. citizenship or permanent residency. Most U.S. venture capital and other investors have not been involved in investing in the three restricted areas in China, having gradually moved away from investing in the country. But some venture investors in China who work for domestic RMB funds will still fall under the restrictions as they could be U.S. green card holders or naturalized citizens. However, some industry players have pointed out that most investments in the three sectors covered by the ban are state-backed, with few non-state venture capital participating. ‘The ban should not come as a surprise to any investor who knows what’s been going on in the past three or four years,’ said a Silicon Valley-based venture investor who has invested in China for over two decades. ‘AI, chips and quantum computing have increasingly become a play for government funds in China.’ The Treasury Department said the ban does not prohibit U.S. persons from all activities in China.” “‘The United States supports an open investment environment consistent with the protection of U.S. national security,’ it said in its announcement of the new rules. Publicly traded securities and derivatives such as stocks and bonds will be exempt from the restrictions. A senior administration official said, ‘We do have existing authorities to address the threat [in the public market]. For example, the Treasury Department has Chinese military industrial complex sanctions regulations that are intended to address U.S. persons from purchasing or selling publicly traded securities and companies that are involved in this sector.’ Meanwhile, similar outbound investment bans on China might be coming from U.S. allies. ‘The administration has been engaged in extensive conversations with allies and partners on the issue, and we are encouraged to see some allies and partners exploring the issue of outbound investment security in their jurisdictions,’ said the official.”

"The idea that a federal Industry minister would champion a large public investment into a foreign technology company and then hold that investment up as a signature project in government’s Future Made in Australia ambitions is shocking." "... the idea that Australia, having spent tens of millions of public research dollars on quantum research over decades, would drop $200 million or more on a foreign quantum startup that has made no investment in this country and has no commitment to this country (and doesn't even have a commercial ready, proven product) seems unhinged." "For Australia’s quantum companies, it would be a disaster. It would have a crippling effect on the ability of Australia’s quantum hardware pioneers’ ability to raise venture capital in international markets." Why would anyone do business with a mature, advanced Australian quantum computing business ready to take their world-class product to market, when our own government has decided, ahead of issuing an EoI to those same Australian organisations, NOT to buy Australian, which just screams 'you are shit, why would anyone do business with you, we certainly won't be?' This decision to potentially cripple our own industry because America hates competition and will employ any dirty trick to destroy us because we are an economic threat, is tantamount to treason. A Royal Commission, empowered to demand information and jail any politician or public servant or lobbyist or agent that refuses to comply immediately and in full, for a minimum of ten years without a trial, might be the ticket to ensure we do what every other country does: buy home grown first, and if it's not yet commercial ready, invest in it until it is, them buy it. The US does it. The UK does it. China does it. Everyone but us does it, because Australians want to do deals with foreign companies in the hope of securing high paying jobs as their reward for aiding and abetting a foreign country in destroying our competitive potential. If anyone in China tried this, they'd never see the outside of jail cell again. By contrast, we'd jail anyone even naming any of the Australians who miraculously found themselves employed by the foreign company after fucking us over. Are public hangings still a thing? They should be. Accountability might actually be ensured because of the fear it would instil in the sort of self serving dirt involved in this atrocious deal. UPDATE: Industry minister Ed Husic has claimed public interest immunity to withhold documents that reveal federal government dealings with US-based quantum computing firm PsiQuantum. How's that for a polite 'mind your own business'. I say, declare your investment portfolio and those of family members and party mates, so we can see who's profiting from this dirty deal. Luckily, the Whistleblower Act means anyone who knows anything can be terrorised into silence to ensure transparency in government is never a thing.

The National Quantum Strategy unveiled in May last year included the crazy-brave ambition to build the world’s first full-stack, error-corrected quantum computer in this country. While most reasonable people would have assumed this would mean doubling down on Australia’s investment in local quantum sector, which has emerged organically from decades of patient investment in public research. But no, the signs point to the federal government investing in a California-based quantum startup, PsiQuantum following a controversial and secret call for Expressions of Interest last August. Local quantum companies, which entered unusually onerous non-disclosure agreements to participate, say the EoI was tilted in favour of quantum technology being pursued by the US company. A first-up investment in a foreign quantum company would be a disaster for local Australian quantum startups, making it more difficult to raise money from international funds in future. If your own government took a pass on your company, why would private VC be interested in tipping money in? If this is the process that will be used to allocate funding support under this government’s Future Made in Australia Act – including through the National Reconstruction Fund – taxpayers should be alarmed. InnovationAus.com https://lnkd.in/gJi3ZFu5

New Post: China’s $47B semiconductor fund puts chip sovereignty front and center - https://lnkd.in/g-TMBt2t - China has closed a third state-backed investment fund to bolster its semiconductor industry and reduce reliance on other nations, both for using and for manufacturing wafers — prioritizing what is called chip sovereignty. China’s National Integrated Circuit Industry Investment Fund, also known simply as ‘the Big Fund,’ had two previous vintages: Big Fund I (2014 © 2024 TechCrunch. All rights reserved. For personal use only. - #news #business #world -------------------------------------------------- Download: Stupid Simple CMS - https://lnkd.in/g4y9XFgR -------------------------------------------------- or download at SourceForge - https://lnkd.in/gNqB7dnp

Last week, the National Counterintelligence and Security Center (“NCSC”), the Office of Economic Security and Emerging Technologies (“OESET”) and other coordinating government agencies issued a warning to U.S. venture capital, private equity, and technology startup companies of efforts by foreign threat actors to gain access to intellectual property and proprietary data of U.S. companies through foreign-origin private investments. These foreign investments, the agencies say, are being used to exploit U.S. startup companies and their investors, while putting U.S. economic and national security interests at risk. U.S. companies and their domestic private equity and venture investors that are contemplating raising investment capital should carefully assess prospective foreign investors by undertaking due diligence designed to: * Independently confirm that the foreign investors are credible, including their ownership, and their anticipated source of funds. * Confirm that the investors are not subject to any U.S. regulatory restrictions, including sanctions or other designations. * Ensure that data privacy and other local laws of the foreign investors allow for company information to remain confidential and out of the host government’s purview. * Determine the foreign investors’ other investments and whether they invest in companies engaged in similar businesses in their home country – a potential indicator that their intentions may not be entirely above board. There is no such thing as “too much diligence” as it relates to considering bringing on a foreign investor, especially from countries racing with the United States to be at the forefront of critical emerging technologies and resources. #Duediligence #Intelligo

Over the past twenty years, many of our current "disruptive" technologies were financed at a loss in order to drive out the competition and dominate industries such as social media, online payments, cloud services, and online shopping. In many cases the initial financing came from Angel Investors and Venture Capital that included money from Russian Oligarchs that was apparently legal at the time. These early-stage contributions were essential for the success of these companies, however, with the brutal invasion, bombing of civilian infrastructure, and the rape and murder of citizens of neighboring countries by Russia, the well-known attempts to influence US and other country's politics and elections, and Putin's current war on "the West" should require that we take a second look at where exactly the money came from for these startups and what these external relationships mean with regard to current Russian hostilities.

If you are in the VC or PE space, ask yourself what you are doing to ensure you are not funding your adversaries? Please read this post from Michael J.. His opinions here are not only well informed, but relevant to the current state of where geopolitics meets investing. #venturecapital #investing

As I’ve argued multiple times, VC – an industry predicated upon transforming other verticals at scale – is itself facing significant disruption. But adding fuel to this fire is the recent barrage of legal and regulatory changes, underscoring a new interventionist approach from the authorities. This includes new merger guidelines introduced by the FTC and DOJ; President Biden's Executive Order, which will impose restrictions on U.S. investments in “countries of concern” in sectors like semiconductors and microelectronics, quantum information technologies and AI; the proliferation of AI initiatives including an updated AI R&D roadmap, the SAFE Innovation for AI framework emphasizing security, accountability, and innovation, and the CREATE AI Act; and California Senate Bill (SB) 54: which will mandate VC firms to report diversity data on the founders they invest in. Individually these changes make sense and are designed to curb some of the industry’s excesses, the lack of diversity and improve national security. But together they are shifting the ground under the venture industry’s feet, and creating a new tier of regulatory complexity for VCs to navigate. This playbook from Carta is one of the best practical guide on VC fund regulation that I've seen. Great checklists and frameworks to understand SEC rules and the more recent California diversity disclosure requirements. #venturecapital #regulation #SEC https://lnkd.in/eXxt4gVQ

Trump's second term presents opportunities for VC/PE and startups through deregulation and innovation-focused policies, but challenges like stringent immigration rules, reduced AI funding, and fragmented regulations may hinder startups and global talent access. In this post you can find more details. Digital Data Design (D^3) Institute at Harvard #MTLC #BostonTech #BoardReadyBootcamp #TechTop50 Harvard Innovation Labs #PE #VC #Startups

Funding our Adversaries: We need a cohesive strategy to force and penalize American VC and PE firms from continuing to fund the technology programs of our adversaries. No Good Return Comes from Funding our Adversaries We are at war. There is no doubt about it. Nation-state adversaries are attacking us at this very moment. #China, #Russia, #Iran, and #North Korea attempt to leverage the #cyber and technology battlefields to inflict harm on U.S. economic and national security every day. Oh, I forgot to mention that China’s IP theft costs U.S. companies $600 billion a year. Our Venture Capital and Private Equity machines are fueling Chinese military and intelligence capabilities with one purpose – defeat the U.S. economically and militarily. Ouch. Research earlier this year from Future Union highlighted the stark reality. It found that nearly half of the top 100 venture capital investors have directly invested in Chinese companies focused on overtaking U.S. technology dominance. Future Union found that GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital China, and Walden International invested nearly $2 billion in Chinese artificial intelligence (AI) companies and more than $1 billion in semiconductors. We are in a technology arms race where #AI is the next great weapons platform, and semiconductors are the foundational “natural resource.” We cannot have a system funded by Americans that contributes to the war efforts of our enemies. Are #venture capital and private equity firms knowingly working with companies owned and groomed by the Chinese Communist Party (CCP)? It is hard to claim naivete when you are investing billions of dollars. It doesn’t take a lot of digging to find CCP fingerprints. There are no good explanations or excuses – none. Some might ask, “Isn’t it the primary responsibility of venture capitalists and private equity firms to make the largest return possible for their investors?” Yes, that is true, but realizing a short-term gain that ultimately leads to long-term destruction is not a return in the best interest of American investors. It is time to shine a light on the dark investment underworld that is working against the best interests of its constituents. We need stronger regulation and oversight of overseas technology investments. The venture capital and private equity industries must fully disclose who, when, and what they have invested in China. There is a reason that Global Open Source Intelligence (OSINT) pioneers like Strider Technologies - is one of the fastest growing tech firms in the U.S by revenue. The private sector is lightyears ahead of Governments in using OSINT and data science to see who is who in China, Russia and Iran. It is time that investors have the opportunity to prevent their money from aiding and abetting China’s mission of American destruction. #venturecapital #cybersecurity