Washington, June 27: U.S. senators have issued a warning that China is ramping up its efforts to acquire American artificial intelligence technology and other advanced technologies through economic espionage, cyber operations, and business investments. They described this campaign as an increasing threat to both national security and global technological leadership.
This warning emerged during a hearing by the House Select Committee on the Chinese Communist Party, where former acting director of the Defense Intelligence Agency, David Shedd, stated that Beijing has established a significant system to obtain American commercial and technological secrets.
Shedd informed representatives, “This campaign, which includes cyber espionage, human intelligence, academic collaboration, and commercial investment, has been crucial to China’s rapid economic and military advancement.”
He noted that China has transformed itself into a global technological power by combining cyber espionage, intelligence operations, academic partnerships, and commercial investments to acquire sensitive technologies.
According to Shedd, Beijing’s intelligence agencies target companies, universities, and researchers working in fields such as artificial intelligence, telecommunications, biotechnology, quantum computing, and advanced weapon systems.
He remarked, “Corporate America, professors, and academic researchers are all prime targets. The size and capability of China’s intelligence services have significantly increased.”
The hearing also focused on emerging concerns regarding artificial intelligence. Senators referenced reports indicating that the major Chinese tech company Alibaba had targeted the U.S. AI firm Anthropic through a “distillation” attack, designed to extract information from advanced AI models.
Shedd explained that this technique involves simplifying data from expensive AI models, allowing them to be recreated at a much lower cost.
He stated, “This enables Chinese companies to bypass the substantial investments made by large AI enterprises in the U.S.” He argued that this method provides Chinese firms with an opportunity to leapfrog years of costly research and development processes.
Shedd called for robust protection of what he referred to as the “crown jewels” of American technology and urged for greater collaboration between government and industry to safeguard intellectual property.
When asked what Congress could do immediately to increase the costs of Chinese-influenced operations, he pointed to concerns surrounding TikTok and suggested that enforcing existing laws affecting the platform would send a crucial signal to Beijing while also limiting access to user data.
The hearing highlighted growing concerns in Washington that technological competition with China has become a focal point of strategic rivalry between the world’s two largest economies. Areas such as artificial intelligence, semiconductor technology, quantum computing, and biotechnology are viewed as essential sectors for both commercial and military applications.
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