Investments

Chinese Investment In Neurala, Others, Worries US

Boston-based artificial intelligence startup Neurala has created a deep learning neural networks platform and software. While Neurala has seen some funding success, including a $14 million Series A venture funding round led by Pelion Venture Partners back in January, one investor in particular reportedly had the Pentagon on red alert (so to speak).

Neurala received an investment of an undisclosed sum as part of a $1.2 million funding round from investment firm Haiyin Capital, said The New York Times, which is backed by a state-run Chinese company Everbright Group.

The investment itself is what is concerning to some. Chinese investments in U.S. startups are far from atypical. Data indicates that China has increased activity enabling American startups, investing $9.9 billion in 2015, according to research firm CB Insights.

But some at the Pentagon worry that Chinese companies with close ties to the government are investing in American AI and robotics startups as a means to advance China’s military.

“What drives a lot of the concern is that China is a military competitor,” senior fellow at the Center for Strategic and International Studies James Lewis told NYT. “How do you deal with a military competitor playing in your most innovative market?”

But many technology startups say that Chinese investments are sometimes the only source of startup funding. For example, the U.S. Air Force was impressed by Neurala’s deep-thinking Neurala brain technology and its capability to make robots more reactive. But there was no follow-through when it came time to fund the company.

“We were told by the secretary of the Air Force, ‘Your tech is awesome; we should put it everywhere,’” Neurala’s CEO Max Versace told NYT. “No one followed up.”

Neurala’s technology enables products to learn autonomously and receive actionable information from their cameras and sensors in real time. Originally developed for use by NASA and the U.S. Air Force, Neurala’s deep learning artificial intelligence platform can be used in smart consumer products, including toys, cameras, drones and self-driving cars.

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