US Government Addresses Foreign Threats in Tech Beyond TikTok through Grants and Market Influence

While Congress debates whether to force the sale of TikTok’s parent company due to alleged Chinese influence, the US government is taking various actions to address foreign threats in sensitive technology areas beyond just TikTok. These include providing grants to both domestic and friendly foreign semiconductor manufacturers to combat the dominance of Taiwan-based TSMC, which is viewed as being under Chinese influence by US authorities. The recent award of $6.1bn in such grants to Micron Technology has been welcomed, with Senate Majority Leader Chuck Schumer stating that this will create an estimated 50,000 jobs. These grants stem from the federal CHIPS and Science Act, which has a $52.6bn budget allocated to it. However, some experts argue that such government action, which includes actively working with private companies to influence markets, may induce recipient companies to become bloated and inefficient, leading to a waste of taxpayer money. Instead, they suggest reducing regulatory barriers and international corporate tax rates to attract foreign investment rather than resorting to federal grants and subsidies. Regardless, the US is following the lead of other countries, notably China and Russia, who prioritize achieving dominance in AI as part of their national security strategies. As AI and cybersecurity become increasingly integral to national defense systems and infrastructure, governments recognize the need to foster a strong domestic AI industry and not fall behind on the global stage. Additionally, data and AI are major drivers of economic growth and competitiveness, and governments acknowledge the importance of ensuring that these technologies are secure from foreign interference and manipulation. However, some experts caution against the growing trend of government intervention in free markets, arguing that it could potentially result in recipient companies becoming bloated and inefficient, ultimately harming the economy.