China’s top six AI labs have dished out roughly $500 million a year on American data companies, according to a Forbes report.
Four US-based AI data companies reported to have done business with Chinese AI labs are: SurgeAI, Mercor, AfterQuery, and Turing.
McCaul, the former chairman of the House Foreign Affairs Committee, said the companies must stop working for China if they want government contracts.
“If you want to do business with the US government, you should not also be helping a Pentagon-designated Chinese military company build better AI,” he said.
AI requires vast amounts of data so that its models can fine-tune their pattern prediction capabilities. Depending on the type of AI, its training data requirements is often very specialized and hard to obtain.
The data needs to be accurate and labeled properly. Without proper data, tech companies won’t be able to get their AI models to function properly.
SurgeAI, which is generally seen as one of the top data labeling companies in the field, has done work with Chinese firm Tencent, according to Forbes.
SurgeAI has earned some small contracts with the Army and Air Force. But Tencent has been designated by the US as a Chinese military company.
Executives at Chinese firm Tencent, which works on AI, video games, and more, privately described relying on US firm Surge AI, the outlet reported.
Mercor, which reportedly locked down a US government contract last month, is also known to have done business with Tencent. Some 2% of the company’s revenue came from China in the second quarter, a source told Forbes. The firm recruits and organizes experts for AI companies to lean on for training their chatbots.
Source : https://nypost.com/2026/08/30/us-news/us-data-companies-are-feeding-info-to-chinese-ai-while-also-working-for-pentagon-rep/
