TuSimple’s IPO filing reveals roadblocks for self-driving startups with Chinese ties

While the governments of the United States and China are pushing policies for technological decoupling, private tech firms continue to tap resources from both sides. In the field of autonomous vehicles, it’s common to see Chinese startups — or startups with a strong Chinese link — keep operations and seek investments in both countries.

But as these companies mature and expand globally, their ties to China also come under increasing scrutiny.

When TuSimple, a self-driving truck company headquartered in San Diego, filed for an initial public offering on Nasdaq this week, its prospectus flagged a regulatory risk due to its Chinese funding source.

On March 1, the Committee on Foreign Investment in the United States (CFIUS) requested a written notice from TuSimple regarding an investment by Sun Dream, an affiliate of Sina Corporation, which runs China’s biggest microblogging platform Sina Weibo. Sun Dream is TuSimple’s largest shareholder with 20% Class A shares. Charles Chao and Bonnie Yi Zhang, respectively the CEO and CFO of Weibo, are both members of TuSimple’s board.

If the U.S. government concludes that Sun Dream’s investment poses a threat to the national security of the country, the investor may be told to divest from TuSimple, the filing notes.

Several China-based autonomous driving upstarts, including WeRide.ai, Pony.ai and AutoX, keep research labs in California and have secured regulatory permits to test in the U.S., but most don’t seem to have apparent commercial plans in the country.

TuSimple, on the other hand, is focused on the U.S. for now, with 50 of its Level 4 semi-trucks hauling in the U.S. and 20 operating in China.

“Their strong Chinese background could hobble their U.S.-focused strategy,” an executive from a Chinese autonomous vehicle startup told TechCrunch, asking not to be named.

TuSimple cannot comment because it’s in the pre-IPO quiet period.

This kind of roadblock is hardly new to China-related tech firms coveting the U.S. market (or its allies). In a more famous instance, CFIUS opened a national security probe into ByteDance’s $1 billion acquisition of Musical.ly, which was folded into TikTok. As of last December, the agency was “engaging with ByteDance” to complete a divestment, Reuters reported.

While self-driving ventures can divest to shed their Chinese association, it may be more complicated to achieve short-term supply chain independence in an industry with tight global ties, as an executive from Momenta pointed out.