A recent Pentagon report warns that Chinese investment in U.S. tech startups, especially those with technology that could be deployed in a military setting, could give China a strategic advantage over the U.S.
Setting aside those concerns, while Chinese investment in U.S. tech companies has certainly increased over the years, it’s far from dominant, and may have peaked for now.
The exact amount Chinese firms are investing in U.S. startups is difficult to track. While many funding rounds for private companies become public information, either through disclosures to the Securities and Exchange Commission or via the press, there’s little available data on how much individual firms contribute to each round.
But what we do know is an estimate of the total size of funding rounds in which China-based firms participated, and that peaked in 2015, according to data from research firm CB Insights. That’s when China-based firms were involved in funding rounds for U.S. tech startups that totaled $10 billion, about one-fifth of the total money raised by U.S. tech startups that year.
Overall, that was a big year for funding. Chinese firms participated in rounds that were more than four times bigger than the year before. Those billion-dollar-plus financings in 2015 included investments by Hillhouse in Airbnb, Renren in SoFi and Baidu and Hillhouse in Uber. These investments also helped bring up the total investment in U.S. tech startups.
However, in 2016, the last full year of available data, the value of funding rounds with participation from Chinese firms dropped 50 percent. Based on the first quarter of 2017, that number could decrease this year as well.
Back to the Pentagon’s assertion: Even if we did know the exact investments, it’s not always clear which startups would be of military concern. Consider the following startups that have received Chinese investment recently and have potential military and consumer applications:
- Neurala (latest funding round with Chinese investors: $1.2 million) makes scientific engineering software that can make military robots smarter.
- Lytro ($60 million round), whose camera technology records 3-D information that could be used in VR, falls under consumer electronics.
- Velodyne ($150 million), an autonomous car sensor company backed by Baidu, falls in the electronics segment.
One particular growth area: Chinese-involved investment in AI and VR startups, both of which have consumer and military potential.
This article originally appeared on Recode.net.