Listen: Exodus of Chinese investment from Silicon Valley is real. But how much does it matter?
"This marketplace podcast is brought to you by. Indeed, are you hiring with? Indeed, you can post a job in minutes set up screener questions than zero in on your shortlist of qualified candidates using an online dashboard get started today at indeed that com slash marketplace. That's indeed dot com slash marketplace. Chinese investment in Silicon Valley a true worlwide romance now with the nomads from American public media. This is marketplace tech demystifying the digital economy. I'm jed Kim in for. Molly would. Part of the Trump administration's hardline against China is focused on intellectual property concerns. The fear that widespread investment of Chinese money. Into startups gives the Chinese too much access to cutting edge American tech innovations. That's why legislation was passed to limit foreign investment, the committee on foreign investment in the United States or syphilis is now able to probe foreign investments into startups, and that is making investors, especially Chinese ones. Balk deals are being abandoned valley. Watchers say it's pretty much a full stop of Chinese money coming into Silicon Valley, Heather Somerville is a tech reporter for Reuters. Who cover Silicon Valley, I asked her I about the impact of this exodus where Chinese money has been particularly important to US tech startups is in hardware hardware is an area that a lot of US venture investors, don't really like to fund they find it difficult and expensive in Turkey to pay off. But china. Has been more enthusiastic about backing these types of startups. They'll very much back early early stage startups where there's a lot of risk. So all of these sorts of companies have definitely lost a fairly significant investment source you mission that they were kind of had an appetite for risks. But now we're seeing them no longer doing that. Oh, how have the risk mounted for them? Right. I think the appetite was for kind of technological or financial risk. But when we talk about political and regulatory risk that seems to be a different ballgame. So the reason that Chinese investors are really not even attempting to do a lot of deals these days. They used to do is because they see themselves as really non-competitive they know that if they go before syfy s for you, they're likely to have that deal unraveled. And so it'll be a big waste of time for everyone and startups aren't really going to want to go through that cost in that lengthy review that will slew them. Down. And they also in many cases, don't want the additional scrutiny a lot of these investors have some sort of government backing will what does the immediate and longer term impact of a Chinese exit. Well, in the near term, there's you know, one less source of funding for companies, and that can be viewed certainly as a disadvantage, but also I think a lot of people argue that that's not necessarily a bad thing. You know, more than eighty four billion dollars was invested in US venture backed companies in the first three quarters of last year. We should have full your data shortly here. There's a heck of a lot of money and are high and people are see the benefit of removing some money from Silicon Valley term. I think what people are concerned about is that the US will be put at a disadvantage because this Chinese money will go out swear, perhaps it'll be invested domestically. We're already seeing signs that a lot of it is shifting to southeast Asia or Latin America. Heather Somerville is a tech reporter for Reuters. She writes as Chinese investors are looking at other opportunities American start ups are trying to figure out how to make them stay. We've got linked her story on our website. Marketplace tech dot org. I'm jed Kim. And that's marketplace tech. And now for some related links. It's me Molly again from the ES in Las Vegas this ES show floor opens on Tuesday and so Monday is when literally everyone flew into Las Vegas. We are now well into miles and miles of walking huge ridiculous booths extravaganzas and also the realization that too small humans me and senior producer Yves tro, probably can't visit all of the forty five hundred exhibitors who were drying. No, some crazy things that are happening around Vegas because of CS Mercedes is shuttling people around in an electric autonomous car that looks straight out of town. There is a startup called hollow ride that is demonstrating a virtual reality system. That goes in cars, you can watch Disney marvel stuff inside an Audi e Tron, and they are certain that only passengers are going to use this system on the news year side of things remember yesterday when we told you that apple. Showing up big it's ES by partnering with all these companies for smart home devices. Well, Google is also out here. Big time trying to kick Amazon and Alexa to the curb on Tuesday. The company announced that you can now control a bunch of products using Google assistant like a smart sprinkler system. Hey, Google, water the lawn and some smart lights outlets television. And also, apparently a smart mirror and math. We're going to have to wrap this because I got to check out the show floor immediately from what I hear. There are lots of smart mirrors. And this is basically all I ever wanted a bathroom mirror. That tells me the weather and news update than the important basics. While I'm brushing my teeth, fixing my hair, and if that reality is here now, I am in also after go because Google has a huge booth. It's ES was actual rise like Disneyland you've probably already since it's Wednesday seen a million pictures of it. But if not check my Instagram, Molly would pro for pictures of that and everything else, I'm Molly would and that's marketplace tech. This is APN. This marketplace podcast is brought to you by. Indeed when it comes to hiring. You don't have time to waste you need help getting your shortlist of qualified candidates fast. That's why you need indeed dot com post a job in minutes. Set up screener questions then zero in on qualified candidates using an intuitive online dashboard. And when you need to hire fast, exceleron your results with sponsor jobs. New users contri- for free at indeed dot com slash marketplace. That's indeed dot com slash marketplace. Terms, conditions, and quality standards apply."