The United States government has blacklisted several top artificial intelligence startups in China. This action follows the already existing trade blacklist that has been present against China since the beginning of the ongoing trade war. The new developments are a response to the current actions being taken against Muslim minorities in the country. The decision will undoubtedly increase the current tensions between the U.S. and China.
The new policy will require U.S. government approval for firms who want to buy components from U.S. companies. It was the same tactic used against China in the Huawei Technologies Co Ltd conflict.
According to the U.S. Government and Department of Commerce, “entities have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups.”
Secretary of Commerce Wilbur Ross has said that the U.S. government will not tolerate the actions that are taking place in the Xinjiang region of China.
Blacklist Comes Days Before Trade Talks Resume
The new developments come just as trade talks are set to resume between Washington and Beijing in the coming days.
Companies that are being targeted include some of China’s most important AI startups. Included in the list are Hikvision, a video surveillance gear company with a market value of $42 billion, the $7.5 billion valued ScienceTime, the Alibaba connected Megvii valued at $4 billion, speech recognition specialist iFlytek Co, data recovery company Xiamen Meiya Pico Information Co, and facial recognition company Yitu Technology.
In total, there are 28 entities that the U.S. Commerce Department has added to the blacklist; Eight of them are companies and the other 20 are organizations including local public security bureaus, which have been targeted for their direct role in the ongoing human rights abuses taking place in Xinjiang.
The Massachusetts Institute of Technology has announced that they will be reviewing their relationship with SenseTime Group Ltd. According to the university, their relationship with the company is to “confront some of the world’s greatest challenges.” The co-founder of SenseTime is MIT graduate Xiao’ou Tang.
Damage to AI Startups in China
Many of the companies should be able to change over to backup supply chains, but there is still the strong possibility of heavy damage. Research will likely slow down as many of the companies rely on the chips created in the United States, and partnerships with U.S. companies can start to deteriorate or even come to a complete stop.
Beijing has been largely quiet on the issue, and they will still attend the trade meetings in Washington. However, the companies involved have not been quite like the government.
According to Hikvision, “Punishing Hikvision, despite these engagements, will deter global companies from communicating with the U.S. government, hurt Hikvision’s U.S. businesses partners and negatively impact the U.S. economy.”
In a statement released by SenseTime, the company expressed their views on the issue while also claiming they follow all relevant laws in the jurisdictions they operate within. The company also reiterated their commitment to ethics within the AI industry.
After the announcement of the blacklist, iFlytek fell by 2.7% and Xiamen Meiya by 1.8%.
With artificial intelligence becoming such a huge part of the global technology market with its enormous potential, it will likely keep becoming a target. It can be expected that the AI industry becomes a tool used against nations and companies, and it will be included in actions such as blacklisting.