Pentagon's China Warning Prompts Calls To Vet US Funding of Startups

Congress may soon require government agencies to vet tech startups seeking federal funding, after a Defense Department study found China is exploiting a popular program that funds innovation among small American companies. From a report: The study, which was viewed by The Wall Street Journal, found China is using state-sponsored methods to target companies that have received Pentagon funding from the Small Business Innovation Research program. The SBIR program for decades has sought to promote innovation through a competitive U.S. government award process. The April 2021 report, which has been circulating among lawmakers on Capitol Hill, details eight case studies it says have "national and economic security implications." The studies include examples of program participants who dissolve their American companies, join Chinese government talent programs and continue their work at institutions that support the People's Liberation Army, the armed wing of the Communist Party. The report also documents instances of SBIR recipients taking venture-capital money from Chinese state-owned firms and of working with Chinese entities that support the country's defense industry. The report concludes that the SBIR program needs a due-diligence process to identify entities of potential concern that would then receive a more detailed review.

Read more of this story at Slashdot.