The bill is expected to pass, but not without the opposition of the Big Five firms—Apple, Amazon, Google, Facebook, and Microsoft. Silicon Valley stands to lose billions of investment dollars from China, and with tech companies spending roughly $49 million a year on Washington lobbyists, twice as much as Wall Street, resistance should be considerable. It will also highlight the fact that, after years of cooperation, Capitol Hill and Silicon Valley are, increasingly, at odds.
America’s technology companies and politicians have long spoken the same language, celebrating openness, deregulation, and disruption as the drivers of innovation—and, in theory, broad economic prosperity. During the Obama administration, over 250 people shuttled back and forth between jobs in the White House and at Google. Yet within the last year, the tone has shifted. Both parties have reacted against Russia’s manipulation of the social media giants to intervene in the presidential election, and the resurgence of populist nationalism, both here and abroad, has altered political dynamics. In the CFIUS bill, government fears of China as an economic and military rival confront the realities of a technology industry in which capital and data flow across national borders.
In recent years, Chinese companies have made large investments in U.S. startups working in artificial intelligence, augmented reality, and robotics—fields with national security implications. They now hold stakes in firms that make rocket engines, sensors for navy ships, and printers that make the flexible screens used in fighter planes. “Imagine the boost for China’s overall military capabilities, not just tomorrow but ten or 20 years from now, once some of those technologies are in full production and integrated into Chinese weapons systems,” said John Cornyn, during a June speech at the Council on Foreign Relations. “China and other adversaries”—China, in this case, was assumed to be an adversary—“will know the vulnerability of our supply chain.”