Sequoia Capital—Sequoia Capital split off China operations as HongShan amid congressional scrutiny over investments in PLA-linked companies
In June 2023, Sequoia Capital announced it would split its China operations into an independent entity called HongShan, completed by March 2024. The US House Select Committee on the CCP later revealed that Sequoia China had invested in companies supporting PLA military modernization and CCP surveillance, including EverSec (PLA cybersecurity) and 4Paradigm (PLA battlefield AI). Congress raised concerns that the split was designed to avoid regulatory scrutiny while allowing continued US capital flow to problematic investments, and that HongShan would likely scrap the national security screening mechanism Sequoia had established.
Scoring Impact
| Topic | Direction | Relevance | Contribution |
|---|---|---|---|
| Authoritarian Compliance | +toward | primary | -1.00 |
| Corporate Governance | -against | secondary | -0.50 |
| Corporate Transparency | -against | secondary | -0.50 |
| Overall incident score = | -0.680 | ||
Score = avg(topic contributions) × significance (critical ×2) × confidence (0.68)× agency (reactive ×0.75)
Evidence (2 signals)
US House Select Committee on CCP probed Sequoia's investments in PLA-linked AI companies
In October 2023, the US House Select Committee on Strategic Competition between the US and the CCP sent a letter to Sequoia demanding details about investments in AI and high-tech sectors. The committee accused HongShan of funnelling US capital into companies supporting human rights abuses and military modernization, citing investments in EverSec (PLA cybersecurity) and 4Paradigm (PLA battlefield AI).
Sequoia announced split of China, India, and Southeast Asia operations into independent entities
On June 6, 2023, Sequoia Capital announced it would split into three independent entities: Sequoia (US/Europe), HongShan (China), and Peak XV Partners (India/Southeast Asia). Managing partners delivered the update to limited partners citing operational complexity, though the split came amid rising US-China geopolitical tensions.