The U.S. has increasingly restricted China’s ability to access American tech, but for now, Chinese investors are still free to ride the U.S.-led AI software wave. Partners at top Chinese VC firms including Sequoia Capital China, Source Code Capital and ZhenFund have been criss-crossing the U.S. and quietly taking minority stakes in all manner of AI startups, according to this enterprising article from my colleague Juro Osawa, which lists around 10 recent examples that haven’t been previously reported.

These China-backed startups include HeyGen and Opus Clip, which focus on AI-generated video and audio, and Generative Alpha (GAlpha.ai), which is developing AI agents that can do financial research and also has backing from Sequoia Capital and Andreessen Horowitz. We also learned that MiraclePlus, formerly the China affiliate of Y Combinator, employs part-time personnel in the U.S. to source new investments locally.

The deals have been hush-hush because of the growing geopolitical tensions between the U.S. and China, so there are probably a lot more of them than we know about. Is that a problem? China hawks in the U.S. are likely to worry: they believe Beijing’s closeness to the Chinese private sector means authorities might extract information from the VCs about the development of generative AI in the U.S. And, many of the China-backed startups are also run by Chinese nationals. We aren’t sure what kind of sensitive or useful information a minority investor could end up with, but U.S. officials are already expressing concerns about the issue, as Juro reported.