Key Takeaways
- •Rep. Fong (R, CA-20) revealed that Chinese AI firm DeepSeek allegedly used industrial-scale "distillation attacks" to illicitly reverse-engineer proprietary American models and bypass safety protections.
- •Max Fenkell (Global Head of Policy and Government Relations, Scale AI) testified that China controls 90 percent of the robotics training data market, outspending the U.S. tenfold.
- •Rep. Fong (R, CA-20) asked about banning Chinese technology procurement, prompting agreement from Fenkell, Matthew Malchano (Vice President, Boston Dynamics), Robbins, and Rush Doshi (Senior Fellow, Council on Foreign Relations).
- •Rep. Walkinshaw (D, VA-11) argued that Trump administration cuts to CISA and the export of advanced NVIDIA chips to China have severely undermined American technological and cybersecurity defenses.
- •Michael Robbins (President and CEO, Association for Uncrewed Vehicle Systems International (AUVSI)) urged Congress to pass a national robotics strategy to prevent China from hollowing out the domestic industrial base.
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Hearing Analysis
Overview
The House Homeland Security Subcommittee on Cybersecurity and Infrastructure Protection held a hearing on March 17, 2026, to investigate the national and economic security risks posed by artificial intelligence (AI) and robotics companies affiliated with the People’s Republic of China (PRC). Chaired by Rep. Vince Fong (R, CA-20), the hearing focused on the rapid market expansion of Chinese firms like DeepSeek and Unitree Robotics, evaluating whether current federal supply chain protections are sufficient to counter state-subsidized competition and potential espionage.
The hearing opened with a focus on DeepSeek, which Rep. Fong described as an "AI Sputnik moment." He alleged that DeepSeek achieved its capabilities not through original research, but through "model distillation"—effectively stealing proprietary data from American AI companies to train its own models at a fraction of the cost. Witnesses and lawmakers expressed alarm that DeepSeek’s applications are available on American app stores while remaining subject to Chinese data laws and censorship. Similarly, Unitree Robotics was highlighted as a dominant supplier of robotic dogs and humanoid robots that have already permeated U.S. police departments and universities despite documented cybersecurity vulnerabilities and ties to the People’s Liberation Army (PLA).
Key Testimony
Max Fenkell, Global Head of Policy and Government Relations at Scale AI, testified that while the U.S. leads in AI models and chips, it is losing the "data race." He estimated that China now controls 90 percent of the commercially available robotics AI training data market, investing 10 to 15 times more than the U.S. government in data labeling and generation. Fenkell argued that this data dominance creates a critical infrastructure risk, as the data used to train robots determines their behavior and vulnerabilities.
Policy Proposals
Matthew Malchano, Vice President of Software at Boston Dynamics, emphasized that robots are the "physical manifestation of AI" and represent a unique cybersecurity threat. Unlike passive IoT devices, compromised robots can physically disrupt manufacturing lines or surveil sensitive facilities. He noted that Chinese industrial policy, including the "little giant" designation for firms like Unitree, has allowed China to install ten times more robots in factories than the United States.
Industry Impact
Michael Robbins, President and CEO of the Association for Uncrewed Vehicle Systems International (AUVSI), warned that China is repeating the "drone playbook" used by SZ DJI Technology Co., Ltd. (DJI) to hollow out the U.S. industrial base through market dumping and IP theft. He highlighted a PLA video titled "The Robot Dog's Time to Kill Has Come," featuring a Unitree robot equipped with an automatic rifle, as evidence of the dual-use threat. Robbins also pointed to the risk of "Trojan horses" in critical infrastructure via subsidized LiDAR sensors from firms like Hesai Technology.
Dr. Rush Doshi of the Council on Foreign Relations framed the competition as the "fourth industrial revolution." He noted that while the U.S. maintains a lead in "compute" (advanced chips), China’s manufacturing scale and government-directed investment are rapidly closing the gap. He urged the U.S. to treat AI and robotics with the same urgency as previous industrial shifts.
Policy Proposals
Policy proposals centered on a "carrots and sticks" approach. Witnesses and lawmakers discussed the National Robotics Commission Act (H.R. 7334) to create a national strategy. Other proposals included extending the Information and Communications Technology and Services (ICTS) framework to PRC-made robots, mandating Cybersecurity and Infrastructure Security Agency (CISA) audits of robots in critical infrastructure, and implementing federal procurement bans similar to those placed on Huawei. On the incentive side, witnesses called for production tax credits, loan guarantees, and "advanced market commitments" to stimulate domestic manufacturing.
Partisan Dynamics
Partisan dynamics were notable. While both parties agreed on the PRC threat, Ranking Member James Walkinshaw (D, VA-11) criticized the Trump administration for weakening national security agencies. He claimed the Department of Government Efficiency (DOGE) initiatives led to CISA losing a third of its workforce and criticized the administration for allowing the export of advanced NVIDIA H200 chips to China. Walkinshaw also argued that anti-immigrant rhetoric harms American innovation, citing successful AI pioneers from immigrant backgrounds like Sal Khan of Khan Academy and Dina Katabi of MIT.
Overview
Notable exchanges occurred regarding the supply chain for rare earth magnets. Robbins noted that China’s throttling of these exports has already impacted U.S. defense programs, including the F-35. He praised the Office of Strategic Capital (OSC) for supporting domestic firms like Vulcan Elements to reclaim this capacity. The hearing concluded with a consensus on the need for a whole-of-government response to prevent China from dominating the "physical AI" layer of the global economy.
Transcript
The committee on Homeland Security subcommittee on cybersecurity and infrastructure will come to order. With that objection, the chair may declare the committee at recess at any point. The purpose of this hearing is to examine the national and economic security risks to the United States by artificial intelligence, robotics, and autonomous sensing technologies developed by companies affiliated with the People's Republic of China. This hearing will also evaluate whether existing federal guidance and supply chain security practices sufficiently address the risks posed by China as these classes of emerging technologies are rapidly adopted and our adversaries try to keep pace with American innovation. I now recognize myself for an opening statement. Good afternoon and thank you all for being here. Today, this subcommittee is examining a national security challenge that is currently unfolding inside the United States. The People's Republic of China is moving aggressively to dominate the technologies that are reshaping the global economy and security, including artificial intelligence, robotics, and autonomous systems. This competition is already present on American campuses, in American police departments, on American smartphones, and increasingly within systems connected to our critical infrastructure. The pattern behind this expansion should look familiar. Chinese companies replicate or acquire American innovation, benefit from large-scale state support, undercut competitors on price, and then use their growing market presence to collect data and expand Beijing's strategic reach. Washington saw this pattern before in industries such as solar panels, drones, and electric vehicles. We are now seeing it again in artificial intelligence and robotics. I want to start with DeepSeek because what happened during the past year represents something genuinely alarming that we have not fully reckoned with. In January 2025, a Chinese artificial intelligence company called DeepSeek released a model that rivaled the best systems produced by leading American AI innovators at a claim cost that was a fraction of what American companies invested. The technology world and the market were shocked. Observers called it an AI Sputnik moment. But the real story was not just what DeepSeek built, it was how. Within weeks of its release, American AI companies raised serious concerns that DeepSeek used their proprietary models without consent to train its own through a process known as model distillation. Rather than investing years of effort and billions of dollars in frontier research, DeepSeek appeared to have fed outputs from leading American AI systems into its training pipeline, illicitly reverse engineering the capabilities those companies had developed through legitimate investment. More recently, in February 2026, DeepSeek, along with Chinese AI firms MiniMax and Moonshot AI, had reportedly orchestrated an industrial-scale campaign to extract capabilities through distillation attacks. Further reporting suggested that DeepSeek employees used third-party routers and networks of unauthorized resellers to circumvent existing safeguards and may have sought to override safety protections around biological and chemical weapons research. Let me be clear about what that means. DeepSeek did not simply outcompete American companies, according to these disclosures, it stole from them. And DeepSeek is not just a competitive concern, it is also a data and influence concern sitting on millions of American devices. The application is available today in the Apple App Store. Every interaction is stored on servers located in the People's Republic of China where authorities can demand access to that data under Chinese law. Researchers have also documented that DeepSeek censors questions related to issues sensitive to Beijing and frequently produces responses that align with official Chinese Communist Party positions. The same concerns apply to Unitree Robotics. Unitree has become a dominant global supplier of robotic dogs and humanoid robots, supported by Chinese manufacturing scale and state subsidies that allow its products to be sold at a fraction of the price of American systems. As a result, these robots are already appearing in police departments, universities, and even parts of the federal government here in the United States. Researchers have discovered vulnerabilities in Unitree systems that could allow unauthorized access to live camera feeds or even remote control of the devices. Additional research has identified weaknesses that could allow one compromised robot to spread attacks to others nearby. Some of these systems have also been observed transmitting operational data back to servers located in China. American companies are innovating and competing seriously in robotics and artificial intelligence, and this subcommittee strongly supports their work. The answer is not to retreat from these technologies. It is to invest in trusted American alternatives, strengthen cybersecurity practices, and prevent federal funds from supporting platforms that put American data and infrastructure at risk and give China an economic and military advantage. The witnesses before us today have direct knowledge of these threats and the larger dynamics at play across these industries. I look forward to their testimony. Thank you. I now recognize the ranking member, the gentleman from Virginia, Mr. Walkinshaw, for his opening statement.
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