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Study finds that China is still a key DoD supplier

Sep 18, 2023
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While much attention is given to China’s role in the supply chain for electronics, particularly semiconductors, a new report featured in Forbes has revealed that Chinese suppliers are deeply integrated into US defense contracting and acquisition across a wide range of sectors, including artificial intelligence and optics.

The report, by Govini, a commercial data analytics firm, found that the US Department of Defense (DoD) has 922 Tier-one Chinese artificial intelligence suppliers and 552 Tier 2 AI suppliers. The AI category spans a variety of sub-segments including data integration, autonomy, machine learning, computer vision, and natural language processing.

“The vulnerabilities apply to a whole subset of critical applications of artificial intelligence in government and the national security sector,” said Govini founder Kevin Dougherty, as reported in Forbes.

The report also found that the DoD has 45 Chinese Tier 1 suppliers for optical sighting and ranging equipment.

The impact of Chinese supplier presence in the acquisition chain can be seen across the defense enterprise, with hundreds of billions of dollars in US taxpayer funding being spent on critical technologies that include Chinese components or interests.

While some of this is unavoidable in today’s globalized economy, as Dougherty points out, there are some links that could be avoided. For example, the US government could avoid contracting with US firms that have subsidiaries that sell to or work with Chinese defense companies.

Last March, it was revealed that the Northern California-based tech firm AXT owns an 85 percent stake in a Chinese subsidiary that produces materials for semiconductors and counts state-owned defense firm China Electronics Technology Group Corporation (CETC) as one of its biggest customers. CETC has been linked to Beijing’s surveillance balloon program.

The growing reliance on Chinese suppliers in US defense contracting and acquisition is a cause for concern, as it presents a number of risks to national security. For example, China could use its access to US supply chains to steal sensitive information or sabotage critical systems. Additionally, China could use its leverage over US suppliers to pressure the US government to make concessions on policy issues.

The US government needs to take steps to reduce its reliance on Chinese suppliers in defense contracting and acquisition. This could include investing in domestic production of critical technologies, working with allies to develop more resilient supply chains, and identifying and mitigating risks associated with Chinese suppliers.

The Excitement of Artificial Intelligence

Artificial intelligence (AI) is one of the most exciting and rapidly developing fields of technology today. AI has the potential to revolutionize many aspects of our lives, from the way we work to the way we interact with the world around us.

AI is already being used in a wide range of applications, including defense contracting and acquisition. For example, AI is being used to develop new weapons systems, improve intelligence gathering and analysis, and create more efficient and effective logistical systems.

The growing reliance on AI in defense raises a number of important questions, such as how to ensure that AI systems are used responsibly and ethically. However, it is also clear that AI has the potential to make a significant contribution to US national security.

The Challenge of Securing Supply Chains

In today’s globalized economy, supply chains are complex and interconnected. This can make it difficult to ensure that all components of a supply chain are secure and trustworthy.

The US government is increasingly aware of the risks posed by insecure supply chains, and is taking steps to address these risks. For example, the Department of Defense has issued new regulations requiring contractors to disclose their supply chains and to take steps to mitigate risks.

However, the article highlights the need for the US to work with its allies and industry partners to develop and implement new technologies and strategies to mitigate the risks posed by insecure supply chains.

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