Shaky U.S.-China Trade Relationship Will Top Trump's Agenda In Beijing

Earlier this year, an internal Pentagon report warned of a surge of Chinese investment in Silicon Valley startups, especially in technology with military applications.

According to The New York Times, the Pentagon report, commissioned by former Secretary of Defense Ash Carter, said: "The U.S. government does not have a holistic view how fast this technology transfer is occurring, the level of Chinese investment in U.S. technology, or what technologies we should be protecting."

"The Chinese are smart," says McGregor. "They're investing in everything in Silicon Valley right now. And in some cases, when the Chinese invest in something that prevents [the] U.S. government from investing, they're blocking technologies from our military."

McGregor says a Pentagon technology specialist told him the report has been removed from the Internet at the request of the U.S. Joint Chiefs of Staff.

"We pride ourselves on our openness and our rule of law," says McGregor. "But this is a weakness, when you have this machine coming at you."