Washington, June 27, 2026
US lawmakers have warned that China is intensifying efforts to acquire American artificial intelligence technology and other advanced innovations through economic espionage, cyber operations and commercial investments, describing the campaign as a growing threat to both national security and global technological leadership.
The warning came during a hearing of the House Select Committee on the Chinese Communist Party, where former Acting Director of the Defence Intelligence Agency David Shedd said Beijing had built an extensive system to obtain American commercial and technological secrets.
“The campaign which blends cyber espionage, human intelligence, academic collaboration, and commercial investments has been instrumental in propelling China’s rapid economic and military rise,” Shedd told lawmakers.
He said China had transformed itself into a global technological power by combining cyber espionage, intelligence operations, academic partnerships and commercial investments to obtain sensitive technologies.
According to Shedd, Beijing’s intelligence agencies target companies, universities and researchers working in sectors including artificial intelligence, telecommunications, biotechnology, quantum computing and advanced weapons systems.
“Corporate America, professors, academic researchers, are all fair targets,” he said, adding that China’s intelligence services had grown dramatically in size and capability.
The hearing also focused on emerging concerns over artificial intelligence after lawmakers referred to reports that Chinese technology giant Alibaba had targeted US AI company Anthropic through what was described as a “distillation” attack designed to extract knowledge from advanced AI models.
Explaining the technique, Shedd said it involved simplifying data from expensive AI models so they could be reproduced at much lower cost.
“They’re able to bypass the investment that these large AI companies in the United States have put into it,” he said, arguing that the approach allowed Chinese firms to “leapfrog” years of costly research and development.
Shedd urged stronger protection of what he described as the “crown jewels” of American technology and called for greater cooperation between government and industry to safeguard intellectual property.
Asked what Congress could do immediately to raise the cost of Chinese influence operations, he pointed to concerns surrounding TikTok and argued that enforcing existing legislation affecting the platform would send an important signal to Beijing while limiting access to user data.
The hearing highlighted growing concern in Washington that technological competition with China has become central to the broader strategic rivalry between the world’s two largest economies. Artificial intelligence, semiconductor technology, quantum computing and biotechnology are increasingly viewed as critical areas with both commercial and military applications.(Agency)
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