Photo: Courtesy of World View Enterprises
Feb 27, 2023
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An Arizona company that manufactures and operates high-altitude surveillance balloons, and contracts with the federal government, faces renewed attention in the aftermath of the destruction of a spy balloon sent by the Chinese government that entered U.S. airspace earlier this month.
- As recently as seven years ago, the company secured funds from Chinese investors.
Context: Tucson-based World View, cofounded by now-U.S. Sen. Mark Kelly in 2012, received venture capital from Tencent — among the largest tech companies in China — both in 2013 and 2016.
- Tencent, like most Chinese tech giants, has close ties to the Chinese Communist Party.
- Yes, but: World View president and CEO Ryan Hartman told The Arizona Republic in 2020 that Tencent had "zero access, zero input and zero control" over the company.
Of note: When Tencent made its investments, World View was mostly focused on space tourism. Tencent says it stopped investing after the Arizona company pivoted to a defense-oriented business.
- Today, World View contracts with the U.S. government and private companies to provide aerial surveillance via balloon.
- About 65% of the company's work last year was "defense related," Hartman told Breaking Defense.
- The Pentagon's Defense Counterintelligence Security Agency examined World View in 2019 and cleared the company to handle military work, The Republic reported.
State of play: A high-altitude balloon sent by the Chinese government was downed by an American fighter aircraft off the coast of South Carolina in early February. The U.S. government believes it was being used for surveillance purposes.
Why it matters: That event escalated tensions between the U.S. and China and raised concerns over Chinese government surveillance and influence in American businesses.
- Claire Chu, senior China analyst at defense intelligence company Janes, tells Axios Phoenix the balloon provides an opportunity to more carefully examine Chinese holdings in critical U.S. industries, including Tencent's investment in World View.
- "It's just not a good look to have one of the largest Chinese investors, a Chinese company that's involved in a lot of critical technologies back home, involved in potential U.S. surveillance capabilities here," she says.
What they're saying: National security and global economic experts told us Tencent's investment in World View was "odd" but not necessarily cause for concern.
- American Enterprise Institute researcher Derek Scissors tells us many Chinese companies invested in seemingly random U.S. entertainment and tourism businesses around 2016 in an attempt to move money out of China.
- "We have a very small stake in the company, with no board seat or investment rights," Tencent said in a statement to Axios. "We invested when the business model focused on space tourism. Once the business shifted, we stopped investing and no longer have any active communications with the company."
Photo: Courtesy of World View Enterprises
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