US Urges Vigilance By Tech Startups, VC Firms on Foreign Funds

The US is warning homegrown tech startups and venture capital firms that some foreign investments may be fronts for hostile nations seeking data and technology for their governments or to undermine American businesses. From a report: Several US intelligence agencies are spotlighting the concern in a joint bulletin Wednesday to small businesses, trade associations and others associated with the venture capital community, according to the National Counterintelligence and Security Center. "Unfortunately our adversaries continue to exploit early-stage investments in US startups to take their sensitive data," said Michael Casey, director of the NCSC. "These actions threaten US economic and national security and can directly lead to the failure of these companies." Washington has ramped up scrutiny of investments related to countries it considers adversaries, most notably China, as advanced technologies with breakthrough commercial potential, such as artificial intelligence, can also be used to enhance military or espionage capabilities. [...] Small tech companies and venture capitalists "are not in a position to assess the national security implications of their investments," said Mark Montgomery, former executive director of the Cyberspace Solarium Commission, which was assigned to develop a US cybersecurity strategy. "There are way too many examples where what appears to be, at best, potentially only dual-use or non-military-use technology is quickly twisted and used as a national security tool."

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