The rationale is to protect U.S. data security, and potential buyers are currently being sought.
Author | Ding Yi
Edit | Wen Liang
The future of Tucson is facing one of the most important choices since the company's founding.
According to Reuters, the U.S. government is asking Tucson to sell its operations in China in the future and focus on the U.S. market.
A source confirming that Tucson will sell its China business in the future said that under the strict supervision of China and the United States, Tucson intends to sell its China business for $1 billion in the future. Tucson Future has approached several Chinese investors, including private equity firm Boyu Capital, to find potential buyers.
It further said that after Tucson solves the "security problem" in the future, Tucson's future business is expected to develop independently.
Although after the news, the long-doldrums of Tucson's future stock price rose sharply, rising by more than 25% at one point, the dust settled on this event may further shatter the vision of Chinese self-driving companies to land in the United States.
Tucson's performance in the stock market for the next 1 year
Dark clouds before the storm
April 15, 2021, is one of the most important milestones in Tucson's future history. On that day, Tucson Future successfully landed on the NASDAQ, becoming the world's first autonomous driving stock. Although Tucson will suffer a break in the future listing, Sina, as the largest institutional shareholder, still cashed out 1.8 billion yuan, and the return on investment may reach 12 times.
However, as a technology company that operates in both China and the United States, Tucson Future has attracted the attention of the U.S. government shortly after its listing, and the Committee on Foreign Investment in the United States (CFIUS) has since launched a continuous investigation into Tucson Future for nearly a year.
Tucson Future submitted a report to CFIUS on August 15, 2021, explaining how Sun Dream Inc, an investor arm of Sina, purchased Mori Future's redeemable preferred stock in 2017.
To reassure the U.S. government, Tucson Future made it clear in its august 15, 2021 report that there are no Chinese members at the company's top management.
In its report, it read: "Dr. Hou Xiaodi and Mr. Chen Mo are members of our Board of Directors. Dr. Hou Xiaodi is a U.S. citizen, Mr. Chen Mo is a Canadian citizen, and Sun Dream, Inc currently owns about 5.8% of the voting rights of the company, controlled by a U.S. citizen. The current member company board of directors and the entire senior management team are U.S. or Canadian citizens. ”
However, this report does not completely dispel the doubts of the U.S. government.
On February 18, 2022, CFIUS officially concluded its long-term investigation into Tucson's future, which tucson will pay at the expense of a national security agreement (NSA) with the U.S. government.
The main contents of the agreement are:
1. Sina Chairman and CEO Cao Guowei and Sina Chief Financial Officer Zhang Yi both agreed not to participate in the election after the expiration of the current board of directors' term and not to submit any opinions to the board. Sun Dream Inc has agreed not to nominate a replacement candidate or increase its existing stake in Tucson in the future. ；
2. The Company agrees to restrict access to certain data and to adopt a technical control plan;
3. Appoint a security officer and director of safety. A Government Safety Committee is established under tucson's Future Board of Directors, chaired by the Director of Safety, and meets regularly with certain CFIUS regulators and reports to certain CFIUS oversight bodies.
The image above is taken from Tucson's future Form 8-K with the U.S. SEC
After the agreement was reached, Tucson will quickly promote the personnel adjustment of senior management in the future.
In early March, Tucson Future officially announced that Lu Cheng, who has been president, CEO and board member of Tucson Future since 2018, stepped down, and Hou Xiaodi, former chief technology officer, became the new CEO and president. In addition, the position of former chairman of the board of directors, Chen Mo, was also taken over by Hou Xiaodi. The main reason for this change may be that Hou Xiaodi is a U.S. citizen.
Autonomous Driving Technology "Islands"
In addition to overseeing Tucson's future controlling stake, the U.S. government closely regulates U.S. technology flows.
Jim Mullen, Tucson Future Chief Administrative and Legal Officer, has revealed that as early as 2020, the U.S. government has been concerned about Tucson's future. At that time, Tucson Future had a fleet of more than 50 trucks and served 18 customers, including UPS and McLane.
However, Tucson's future focus in China and the United States is not the same: in the United States, Tucson will focus on trunk driverless driving in the future, while in China, Tucson's future business focus will be port driverless. However, under the stick of national data security, Tucson will still be difficult to escape the fate of US government supervision and investigation in the future.
Jim Mullen has said cfius wants the technology developed by the U.S. team to remain on its home soil and does not want to see Tucson apply it to its Chinese business in the future. But in fact, Tucson Future's U.S. headquarters did not share the source code or algorithms of the self-driving technology with the Chinese team.
But Tucson's future deal with CFIUS, and even the sale of its China business, declares that the U.S. government has absolute control over the technology research and development of companies doing business in the United States, and even foreign investment.
As data security becomes more and more important, many countries and organizations around the world have enacted laws on data security.
In 2021, the mainland government promulgated the Data Security Law of the People's Republic of China, which mainly includes the review of data related to national security, the infringement of national security by overseas data, and the overseas transmission of related data. and expressly enact this Law for the purpose of safeguarding national sovereignty, security and development interests;
In June 2021, U.S. President Joe Biden signed the Executive Order on Protecting Sensitive Data of Americans from Hostile Foreign Forces, requiring the United States to take precautions to prevent foreign access to American data;
In 2016, the European Union issued the General Data Protection Regulation to strengthen and standardize user data privacy in EU countries and regions.
Strict data protection in many countries and regions may mean that autonomous driving has been tested on the road in many countries, and the way to improve autonomous driving technology is coming to an end. In the future, if autonomous driving technology suppliers try to enter the single market, they must develop local autonomous driving systems only under local legal permission, which will greatly increase the research and development costs of autonomous driving technology suppliers and car companies.
Previously, there was news that Volkswagen intended to acquire Huawei's autonomous driving division. An employee of Cariad, Volkswagen's software division, once explained the reason to the German media "Manager Germany": "We need to be different from the US and European systems, otherwise, the risk of the group getting into a trade dispute between China and the US government is too great – China may not let vehicles enter its market." ”
This shows that at a time when geopolitics are becoming more and more tense and data security is becoming more and more important, Chinese autonomous driving companies doing business in China and the United States need to decide as soon as possible how to put the technology they develop in different countries and the data they obtain on the agenda. At the same time, in the future, the data obtained by autonomous driving companies in different countries may no longer be common to the same system.
Perhaps under the continued influence of multinational Internet companies and geopolitics, countries around the world will introduce relevant laws to protect the flow of their own data and technology in the future.
In order to develop globally, autonomous driving companies may carry out localization research and development of autonomous driving systems in accordance with the laws of different countries and regions, which may lead to the division of autonomous driving systems that should be used in any environment and region into islands, and cars with only one autonomous driving system cannot drive normally between different countries.
In the possible technological isolation and differentiation in the future, self-driving companies with a sea of stars may now need to re-examine their dreams.
END
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