- The Washington Times - Friday, September 30, 2022

The escalating competition between the U.S. and China for advanced technology has spread to the alternate reality metaverse, where the two global powers are fixated on the Britain-based company Hadean.

Hadean has plans to create the infrastructure needed to build digital worlds. The company said in July that it was making a multidimensional land warfare simulator for the British army.

The company’s work lured funding from the U.S. intelligence community, via its strategic investment fund In-Q-Tel, and it attracted the China-based tech titan Tencent.

The mutual interest raised concerns in the U.S. that taxpayers’ money could serve to build tools for China.

Sen. Marco Rubio, Florida Republican, said he learned about China’s play for the cutting-edge metaverse business and began working to prevent American dollars from creating new capabilities for Beijing.

“We will continue conducting oversight to ensure that any investments by the IC are not also advancing the national security capabilities of our adversaries,” Mr. Rubio said in a statement. “For too long, the Chinese Communist Party has successfully poached, stolen, or taken advantage of research and development performed by industry, academia, and the government funded by U.S. taxpayers or our allies.”

Hadean was initially set to collect a multimillion-dollar sum from a group of funders including In-Q-Tel and Tencent, according to reports. In-Q-Tel is a nonprofit contracted with the CIA that spends taxpayer dollars on private companies to help solve national security problems. Tencent is based in China, where the communist regime’s policies of military-civil fusion force cooperation between businesses and the government.

The initial funding plan for Hadean also included financing from the British government, The Telegraph reported in August. The National Security Strategic Investment Fund, a British corporate fund similar to In-Q-Tel in the U.S., was also reportedly advising Hadean.

The Senate Select Committee on Intelligence learned of the plan and privately pressed In-Q-Tel about its investment and about Hadean’s efforts to raise cash from other sources, according to a spokesperson for Mr. Rubio.

In-Q-Tel was not looking to partner with the Chinese tech giant. The fund told The Washington Times that it invested in March 2021, before Tencent.  

When Hadean announced its funding plans in September, the total amount of cash was higher than anticipated in previous reports, a new investor had emerged and Hadean acknowledged taking less from Tencent than the Chinese company offered.

Hadean said it reached an agreement to raise $30 million from a range of investors, including In-Q-Tel, and bolstered by an additional investor, Epic Games, the behemoth video game and software developer. Epic Games was already a Hadean investor and collaborator.  

Hadean CEO Craig Beddis told TechCrunch that his company ultimately took less from Tencent to become compliant with the Committee on Foreign Investment in the United States, a federal government entity that reviews commercial transactions for national security problems.

Mr. Beddis did not answer The Washington Times about whether In-Q-Tel urged him to take less funding from Tencent, nor whether his company heard from the U.S. government directly. In-Q-Tel did not answer whether it encouraged Hadean to take less money from Tencent.

Hadean’s business may face further scrutiny in the U.S. The Senate intelligence committee is in contact with elements of the intelligence community performing oversight related to the Hadean investment, a spokesperson for Mr. Rubio said.

Precisely what Hadean’s investors will receive remains to be seen, but Mr. Beddis said Hadean is working to enable its customers and partners to “build, run and monetize vast virtual worlds.”

“The funding will accelerate the development of our groundbreaking cloud computing technology which can be used to increase the scale, complexity and security of 3D environments and deliver a unique experience to users with no latency,” Mr. Beddis said in a statement. “It will also allow us to continue to innovate and make advancements that will overcome key challenges for the metaverse such as its massive computational demands or limitations in concurrent users.”

Tencent has big plans for virtual worlds. The company said on Wednesday that it has explored building a “digital factory” with the help of an unidentified partner and the end result would rely on cloud computing and digital twin, or virtual reality, technology.

“There will soon be a new connection that integrates digital and physical forms, transcending time and space,” Tencent CEO Pony Ma said on the company’s website detailing his plan for “Immersive Convergence.”

The CIA declined to comment for this report. 

• Ryan Lovelace can be reached at rlovelace@washingtontimes.com.

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