The Committee on Foreign Investment in the United States (CFIUS) has wrapped up its national security probe into autonomous truck software developer TuSimple Holdings Inc., which agreed to limited U.S. oversight and pledged to keep U.S.-developed core technology out of China.
“I think in short this is a clean bill of health from the U.S. government,” TuSimple CEO Cheng Lu told FreightWaves on Tuesday evening.
CFIUS, an interagency committee authorized to review certain transactions involving foreign investment to determine the effect on U.S. national security, finished its probe on Friday, according to an 8-K report TuSimple (NASDAQ: TSP) filed Tuesday with the Securities and Exchange Commission.
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Two board members with connections to Sun Dream Inc., a part of Chinese technology company Sina Corp., will not stand for reelection to TuSimple’s board. Sun Dream held 20% of the equity at the time of TuSimple’s initial public offering in April 2021. It was that stake that brought CFIUS scrutiny.
Sun Dream sold about 6.76 million TuSimple shares, worth about $270 million, at the IPO. It agreed to refrain from adding to its current stake as part of CFIUS concluding its probe. Nor will it nominate replacements for directors Charles Chao and Bonnie Yi Zhang.
National security agreement
TuSimple also entered into a National Security Agreement with the U.S. government under which it agreed to limit access to certain data and adopt a technology control plan, appoint a security officer and a security director, and establish a board-level government security committee to be chaired by the security director.
TuSimple will periodically meet with and report to certain CFIUS monitoring agencies.
“Once you go through this process, there’s usually some sort of monitoring or additional compliance,” Lu said.
Protecting U.S.-developed technology from China was a key issue.
“Around the world [countries] want to keep those core technologies within the country,” Lu said. “This is no different than semiconductors or other artificial intelligence applications.”
With the stigma of a probe ended, TuSimple can focus on its push to commercialize retrofitted Class 8 Navistar Internal LT trucks with no human drivers. It is permanently piloting driverless trucks on a route from Tucson, Arizona, to Phoenix, and will begin driver-out testing in Texas soon.
“We’ve been in a thorough process with the U.S. government and they cleared us,” Lu said. “I think it’s hard for anyone to argue otherwise.”