Posted on Tuesday, February 4, 2025
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by Outside Contributor
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In one of history’s many ironies, following WWI, the German industrial giant Krupp sued Great Britain for royalties it was owed on the technology used to manufacture the fuses for British bombs dropped on Germany during the war. Similarly, China’s DeepSeek recently used the technology of American firm OpenAI to develop its own rival AI product, which threatens the model of AI research and development used by US firms. This “borrowing” reveals a major vulnerability of American technology research: poor controls on the flow of R&D information from US research labs and universities.
The Emerging Technology Observatory’s Country Activity Tracker, which measures research and investment in AI, shows China is by far the United States’ leading country for AI research collaboration, as measured by the number of coauthored papers between scholars from both countries. Overall, the tracker lists 47,715 US-China joint research products in AI; in second place is the UK, with 18,400 research publications (around 60 percent lower than the US-China figure). Although full data for 2023 is not yet available, the tracker lists 6,703 joint US-China AI research products in that year, with only 2,751 for second place UK.
The House Select Committee on the CCP released a joint report in September 2024 with the House Committee on Education and the Workforce, exploring how US universities’ research partnerships with China have advanced the PRC’s military and technology R&D goals. A key culprit is universities’ failure to comply with the provisions of Section 117 of the Higher Education Act, which requires US institutions of higher education to report income from foreign countries valued at over $250,000, such as gifts or research contracts. However, American universities have failed to report billions in foreign funding, which drove the first Trump administration to launch several investigations into Section 117 noncompliance.
We took a closer look into these investigations with an eye to funding from China, Saudi Arabia, and Qatar—two other foreign powers that have drawn scrutiny for funneling billions into American higher education. For this analysis, we used the Education Department’s Section 117 database, which the Office of Federal Student Aid oversees. Its most recent data was released on October 15, 2024.
The 19 American universities with Section 117 investigations reported close to $900 million in PRC funding. This was especially acute at universities involved in AI research: MIT alone reported over $100 million in funding from PRC sources. Saudi Arabia, too, was a major donor to the universities on the list—for a total of nearly half a billion dollars across all 19 schools.
Qatar was by far the most prominent source of foreign funds to American universities. Three schools on the list received at least 10 percent of their foreign funding from Doha alone: Cornell University, Georgetown University, and Texas A&M. Qatar accounted for the majority of each university’s total foreign funding, averaging over 80 percent across all three. These three universities maintain foreign campuses in Qatar, but one of them, Texas A&M, has announced its Qatari campus will close by 2028. Across all investigations, US schools reported over $4 billion in Qatari funding, making it easily the largest foreign donor to American universities. Looking at Qatari money together with China and Saudi Arabia further highlights how entangled these sources are with US higher education—seven of the universities investigated under Section 117 received most of their foreign funding from these three countries alone.
How might the second Trump administration’s Education Department shed more light on this foreign money flow and influence? Most important is overturning the Biden-era department’s practice of disregarding its legal obligations to track foreign gifts and contracts. It is highly unlikely that just 19 campuses (all identified during Trump’s first term) are the only schools violating Section 117.
Further, the new Trump administration should move the enforcement of Section 117 out of the Office of Federal Student Aid (the office that gave us the FAFSA debacle) and return it to the Office of the General Counsel, which is better equipped to investigate and address non-compliance with federal statutes. The Education Department should also audit far more universities to ensure adequate reporting of foreign funds. Finally, department investigators should work closely with their counterparts in the Department of Justice and FBI to tackle this issue—especially when foreign funding could be linked to influence campaigns, technological espionage, or other efforts to undermine national security.
Mark Schneider is a nonresident senior fellow at the American Enterprise Institute (AEI), where his work focuses on education research and development and higher education administration. He is concurrently a distinguished professor emeritus at Stony Brook University. Before joining AEI, Dr. Schneider was the director of the Institute of Education Sciences, a vice president and institute fellow at the American Institutes for Research, and the commissioner of the National Center for Education Statistics.
Reprinted with Permission from AEI.org – By Mark Schneider
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
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