LAURA PARNABY
Goldman Sachs has quietly been using Chinese cash from a $2.5 billion 'partnership fund' to invest in several US companies in the field of AI and computing.
The Wall Street giant is funneling funds from a private equity stash it created with the China Investment Corporation, the Financial Times reports.
Since its launch in 2017, the China-US Industrial Cooperation Partnership Fund has been used for deals with US companies from the fields of cloud computing, drug-testing, global supply chains, and retail tech.
This comes despite increasingly terse relations between the US and China due to disputes about technology, security and Taiwan - and amid Joe Biden signing an executive order to restrict American investments in Chinese companies.
A Goldman spokesman told DailyMail.com the private equity partnership 'is a U.S. fund run by a U.S. manager, and is managed to be in compliance with all laws and regulations'.
Goldman Sachs has quietly been using Chinese cash from a $2.5 billion 'partnership fund' to invest in several US companies in the field of AI and computing
The Wall Street giant is funneling funds from a private equity stash it created with the China Investment Corporation, the Financial Times reports. (Pictured: Chinese President Xi Jinping)
Goldman's behind-the-scenes dealings with the Chinese cash flow began when the bank's chief executive at the time, Lloyd Blankfein, launched the private equity fund during Donald Trump's state visit to Beijing in November 2017.
Sources told Reuters that alongside Goldman, the fund invested $3 billion in the Boyd Corporation, a California manufacturer whose products include drone and AI technology, in September 2018.
Other purchases include US company Cprime, which advises on cloud computing, and drug-testing company Parexel.
Also on the partnership's investment portfolio is Project44, a company which tracks global supply chains, retail tech group Aptos, and lighting specialists Visual Comfort & Co.
The fund's activities have ramped up in recent years, according to the FT, with four investments made in 2021 and one last year.
In 2021, Goldman used the partnership fund to help finance the purchase of LRQA, the inspections and cyber unit of UK maritime classifications group Lloyd's Register, per the FT.
LQRA also owns Nettitude, a cyber defense organization which says it has been approved as a provider for the UK government, and whose work includes 'ethical hacking' to assess client's defense vulnerabilities.
'The Cooperation fund is a U.S. fund run by a U.S. manager, and is managed to be in compliance with all laws and regulations,' a Goldman Sachs spokesperson said.
'It continues to invest in US and global companies, helping them increase their sales into the China market.'
Since its launch in 2017, the China-US Industrial Cooperation Partnership Fund has been used for deals with US companies from the fields of cloud computing, drug-testing, global supply chains, and retail tech
This comes amid Western sanctions aimed at reducing Chinese infiltration via business deals.
President Joe Biden signed an executive order earlier this month to block and regulate high-tech U.S.-based investments going toward China - reflecting an intensifying competition between the world's two biggest powers.
The order covers advanced computer chips, micro electronics, quantum information technologies and artificial intelligence.
Senior administration officials said that the effort stemmed from national security goals rather than economic interests, and that the categories it covered were intentionally narrow in scope.
The order seeks to blunt China's ability to use U.S. investments in its technology companies to upgrade its military while also preserving broader levels of trade that are vital for both nations' economies.
The Chinese Ministry of Commerce responded in a statement saying it has 'serious concern' about the order and 'reserves the right to take measures.'
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