US venture firms stopped writing China cheques but kept flying in to learn

Three Founders Fund partners—Sean Liu, John Luttig and Joey Krug—visited technology companies in Beijing, Shanghai and Shenzhen in August. Their meetings included model developer MiniMax and humanoid-robot maker UBTech. Khosla Ventures partners have made similar trips in each of the past two years, including visits to Xiaomi and Unitree, while Dimension Capital told investors it spent a week studying Chinese AI labs and entrepreneurs.

The trips did not produce disclosed investments. US rules that took effect in 2025 restrict outbound investment in Chinese semiconductors, AI and quantum computing, and firms also say distant investments are difficult to monitor. American venture participation in deals involving China-headquartered companies is down about 80% from 2021, according to PitchBook data cited by The Information.

What remains valuable is information. Investors can compare their portfolio companies with Chinese competitors, inspect manufacturing supply chains and see whether a US startup’s supposedly novel product already exists at scale in Shenzhen or Hangzhou. In humanoid robots, Unitree and AgiBot reportedly shipped 71% of global units last year, while Chinese companies control much of the component ecosystem. For hardware investors, a visit is due diligence on both competition and dependency.

The irony is sharpest for Founders Fund, whose partners have often taken a hostile public stance toward China. But ideological distance does not reduce the need to understand a rival technology system. Washington can block capital from crossing the border more easily than knowledge, components or competitive pressure. The new relationship is neither disengagement nor renewed globalization: American money stays home while American investors study the market they are forbidden—or unwilling—to finance.