Rep. Mike Gallagher (R-WI) (C), chair of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, joins Rep. Elise Stefanik (R-NY) (L) and Majority Whip Steve Scalise (R-LA) for a news conference following a GOP caucus meeting at the Republican National Committee offices on Capitol Hill on February 28, 2023 in Washington, DC.
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Mike Gallagher, the Wisconsin Republican who chairs the select committee tasked with evaluating strategic competition between the U.S. and China, left his meetings with Silicon Valley leaders last week “cautiously optimistic” about the will to stem the flow of U.S. dollars into Chinese artificial intelligence.
Gallagher told CNBC in a phone interview on Tuesday that there was “broad support” among the venture capitalists, and others the committee members met with in California, for barring American asset managers from investing in Chinese AI companies. That’s good news in his eyes as he described the AI race between the U.S. and China as neck and neck.
“I actually emerged from that day cautiously optimistic that we could put in place some sensible controls on American capital flowing to China that would allow us to not fund our own destruction or fund our own loss in the great AI race,” Gallagher said.
He added that American tech companies competing with Chinese firms “don’t want us to sort of subsidize their losing the AI race.”
Gallagher believes the more difficult challenge will be trying to figure out how companies that already have large operations or production in China, like Apple, can decouple from the country and increase their presence in places like India or Vietnam. Gallagher said he believes business leaders now understand that “the behavior of the Chinese Communist Party has changed.”
But even if they don’t accept that, he said, “they accept that the political reality in Washington, D.C. has changed and so it seems they’re looking for active ways to diversify their supply chain.” Still, he acknowledges moving large and costly operations outside of China won’t happen overnight.
Gallagher acknowledged there are still questions he wasn’t able to answer fully during the short trip, but said he hasn’t yet decided the best way to continue those conversations, whether in the context of a hearing or a more private setting or letter format.
“A lot will depend on the answers we get going forward,” he said. “I tend to think it’s healthy when the American people get to see this stuff. And I think the way we’ve conducted our committee so far, it hasn’t been a bomb-throwing exercise. It hasn’t been an effort to get clicks and I genuinely want to understand the choices these companies make when they do business in China and I think the American people want to understand that. And I got to believe that we could have that conversation without it devolving into partisan insanity.”
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