TuSimple’s IPO filing reveals roadblocks for self-driving startups with Chinese ties – ClearTips

While the governments of the United States and China are advancing policies for technical decompiling, private technology companies continue to exploit resources from both sides. In the field of autonomous vehicles, it is common to see Chinese startups – or startups with a strong Chinese link – wanting to keep operating and investing in both countries.

But as these companies mature and expand globally, their relations with China also come under scrutiny.

When TuSimple, a self-driving truck company headquartered in San Diego, applied for an initial public offering on Nasdaq this week, its prospectus flagged a regulatory risk due to its Chinese funding source.

On March 1, the Committee on Foreign Investment in the United States (CFIUS) requested written information from TuSimple about investments made by Sun Dream, a subsidiary of Sina Corporation, which runs Sina Weibo, China’s largest microblogging platform. Sun Dream is the largest shareholder of TuSimple with 20% Class A shares. Charles Chao and Bonnie Yi Zhang, both Weibo’s CEO and CFO, are both members of Tusimple’s board.

If the US government concludes that Sun Dream’s investment is a threat to the country’s national security, the investor may be asked to divest from the note-issuing note TuSimple.

Several China-based autonomous driving upstarts including WeRide.ai, Pony.ai and AutoX have research labs in California and have obtained regulatory permits to test in the US, but most do not seem to have clear business plans in the country.

On the other hand, TuSimple is now focused for the US, with 50 of its Level 4 semi-trucks operating in the US and 20 in China.

An official of a Chinese autonomous vehicle startup told ClearTips that his strong Chinese background could influence his US-centric strategy, which has not been named.

TuSimple cannot comment as it is in a pre-IPO quiet period.

Such a barrier may hardly be new to China-related tech firms wooing the US market (or its allies). In a more well-known example, CFIUS conducted a national security investigation into the $ 1 billion acquisition of ByteDance’s music. Reuters reported that until last December the agency was “entangled with ByteDance”

While self-driving enterprises may divest their Chinese consortium to make excuses, it may be more complicated to achieve short-term supply chain independence in an industry with tight global relations, as reported by an executive at Momenta.

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