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>> There is a size makeshift happening in Silicon Valley's startup investing. I'm Heather Somerville, technology correspondent with Reuters in San Francisco. Addition here are new rules by the committee on foreign investment in the United States. This is a inter-agency group in Washington known as CFIUS. What CFIUS is doing, starting in November is mandating that startups were receiving money from any foreign investor.
And startups that are using hot technology like artificial intelligence, machine learning, and robotics, get approval for investments in their companies. The broader issue here is the longstanding practice by the Chinese of technology transfer and IP theft. Many sources say that venture investing has become a primary way that the Chinese get information on and access to leading edge technology like artificial intelligence.
I've spoken to about two dozens startup entrepreneurs, investors, deal makers, and attorneys, and everyone is saying that this is wreaking havoc on the startup community. The startups don't want to take money from a foreign investor that could end up with a cumbersome, lengthy, and costly review with CFIUS.
Likewise, foreign investors are kind of throwing up their hands and walking away. One venture capitalist I spoke to who has been in the business a long time, said that he's aware of at least ten startups who, upon realizing that their foreign investor would require them to go through deceivious process, ended up stopping the investments and looking for new US-based investors who would not be subject to the same rules.