IC Technology & Cyber — 2026-07-23

McMaster and CSIS Experts Warn HPSCI Foreign Spies Targeting US AI Labs as Counterintelligence Resources Lag Behind

BLUFCongressional testimony naming frontier AI labs as primary Chinese intelligence targets increases pressure on HPSCI to move beyond hearings toward a dedicated counterintelligence framework covering private industry.

Retired Lt. Gen. H.R. McMaster told the House Permanent Select Committee on Intelligence on Tuesday that US counterintelligence has "lagged way behind" and called the post-9/11 record "extraordinarily negligent," warning that China has used US financial institutions, private equity investment and PLA-linked scientists embedded in American firms to extract intellectual property for military and commercial gain 12. CSIS official Seth Jones testified that state and local entities lack the infrastructure to identify Chinese Ministry of State Security and United Front operations inside US borders 2. Frank Cilluffo of Auburn University's McCrary Institute told the committee that frontier AI companies have become primary targets for foreign intelligence services, arguing counterintelligence must extend beyond government to private industry 12. Former Biden AI advisor Ben Buchanan, also testifying, criticized the Trump administration's recent easing of advanced chip export restrictions to China 1. The hearing, chaired by Rep. Rick Crawford, was part of the committee's yearlong bipartisan review of the 9/11 Commission's recommendations 3.

Analysis
McMaster's characterization of the post-9/11 record as "extraordinarily negligent" reframes the debate from resourcing to institutional failure, pressuring HPSCI to convert testimony into legislative or budgetary action rather than continued study. Cilluffo's push to extend counterintelligence into private industry would impose new compliance burdens on AI labs currently outside classified-information protection regimes, while Buchanan's criticism of eased chip export controls signals continuing executive-legislative friction over China's technology policy. Converging, independently sourced coverage across the hearing record, Defense One, and Fox News supports the testimony without contradiction, though witnesses from institutes with direct stakes in expanded counterintelligence funding have incentive to overstate the capability gap to secure resources and institutional relevance.

3 sources

Spies are targeting US AI labs, experts warn Congress - Defense One
US counterintelligence 'way behind,' post-9/11 record 'extraordinarily negligent', fmr Trump WH official warns - Fox News
Crawford Announces Open Full Committee Hearing on Confronting the Next Generation of Threats 25 Years After September 11th - House Permanent Select Committee on Intelligence