Goldman Sachs has been using money from a Chinese ‘partnership fund’ totaling $2.5 billion to make covert investments in several American businesses operating in the areas of artificial intelligence and computing. According to the Financial Times, the massive Wall Street firm is transferring money from a private equity fund that it established in partnership with the China Investment Corporation.
Goldman Sachs tapped into a $2.5 billion private equity “partnership fund” with the Chinese government to buy several American and British companies, according to a report. (Source: New York Post)
Private Partnership Fund Utilized by Goldman Sachs Complies with the Laws and Regulations Imposed
Since its inception in 2017, the China-US Industrial Cooperation Partnership Fund has been put to use in business transactions with American companies operating in a variety of industries, including cloud computing, drug testing, global supply chains, and retail technology. This occurs even though relations between the United States and China are becoming increasingly tense due to disagreements regarding technology, security, and Taiwan, as well as amid Joe Biden’s signing of an executive order to ban American investments in Chinese enterprises.
The private equity partnership, according to a spokeswoman for Goldman Sachs who talked with DailyMail.com, “is a U.S. fund run by a U.S. manager, and it is managed to comply with all laws and regulations.” When Goldman Sachs’ chief executive at the time, Lloyd Blankfein, formed the private equity fund in November 2017, it was during President Donald Trump’s state visit to Beijing. This marked the beginning of Goldman Sachs’ behind-the-scenes transactions with the Chinese cash flow.
In September 2018, the fund and Goldman Sachs invested $3 billion in Boyd Corporation, according to Reuters sources. Drone and AI manufacturer Boyd Corporation is situated in California. The drug-testing company Parexel and cloud computing consultancy firm Cprime were also acquired. Project44 monitors international supply chains; Aptos, a retail technology company; and Visual Comfort & Co., a lighting company, are also part of the partnership’s investment portfolio. FT reports that the fund made five investments in 2021 and one in 2020, indicating a recent uptick.
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Biden’s Directives on Limiting China Utilize US Investments
The Financial Times reported that Goldman used the partnership fund to finance the acquisition of Lloyd’s Register’s inspections and cyber business, LRQA, in 2021. LQRA owns Nettitude, a cyber security company that claims to have won UK government approval and uses ‘ethical hacking’ to assess clients’ defense weaknesses. LQRA claims UK government approval. “The Cooperation fund is a US fund run by a US manager, and it is managed in compliance with all laws and regulations,” a Goldman Sachs representative said. “It continues to invest in US and global companies, assisting them in increasing their sales into the China market,” the publication claimed. This comes as the West imposes sanctions to restrict Chinese influence in the region through business agreements.
This month, President Joe Biden signed an executive order to restrict US-China high-tech investments, reflecting a growing conflict between the world’s two most powerful governments. Artificial intelligence, sophisticated computer processors, microelectronics, and quantum IT are covered. Senior government officials say the project was driven by national security goals rather than commercial considerations and that its categories were purposely limited.
The directive aims to limit China’s capacity to utilize U.S. investments in its technology businesses to strengthen its military while keeping broader levels of trade that are essential for the economies of both countries. The Chinese Ministry of Commerce issued a response in the form of a statement, in which it stated that it has ‘ serious concern’ regarding the decision and that it reserves the right to take steps.
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