Tech Firms Tighten Staff Scrutiny Over China Spying Concerns

Companies in Silicon Valley are reportedly doing more staff vetting over concerns about Chinese espionage.

As the Financial Times (FT) reported Wednesday (June 19), firms such as Google and OpenAI have begun doing tighter screening of employees and potential hires, according to sources working directly with these companies.

It’s a move, the report noted, driven by fears that foreign governments aim to use compromised workers to gain access to intellectual property and corporate data.

The sources told the FT that venture capital companies like Sequoia have also encouraged some companies in its portfolio to do more vetting following warnings that intelligence agencies have set their sights on American tech firms.

Alex Karp, CEO of data analytics contractor Palantir, said Chinese spying on U.S. tech companies was “a huge problem,” particularly for companies that make enterprise software, large language models and weapons systems.

“We have smart adversaries,” Karp said. “Our enemies are ancient cultures fighting for their survival, not just now but for the next thousand years.”

The FT also noted that there are concerns about an increase in xenophobia at U.S. tech companies, considering the prevalence of skilled workers of Asian ancestry.

H.R. McMaster, former White House national security adviser to the U.S. who has advised tech companies and investment firms on foreign espionage risks since entering the private sector, said the threat from Chinese intelligence agencies was “absolutely real and they are persistent.”

“The companies I talk to and work with are very much aware of this right now and are doing everything they can to reduce it,” he said.

These efforts come as tensions between China and the U.S. have led the governments of both countries to institute tech crackdowns.

For example, President Joe Biden signed a bill into law in April that bans TikTok unless its China-based owner ByteDance sells the popular social media platform within a year. The ban is under appeal by the company.

“Congress is not acting to punish ByteDance, TikTok, or any other individual company,” Sen. Maria Cantwell, D-Wash., chair of the Senate Commerce Committee, said in remarks on the Senate floor before voting on the bill. “Congress is acting to prevent foreign adversaries from conducting espionage, surveillance, maligned operations, harming vulnerable Americans, our servicemen and women, and our U.S. government personnel.”

China, meanwhile, has banned iPhone use by government employees and workers at state-owned companies.

This spring, Apple said it pulled WhatsApp, Threads, Telegram and Signal from its App Store in China on the orders of the Cyberspace Administration of China, which cited national security concerns.