Eric Schmidt chairs the Defense Innovation Board (DIB) [1], the US government knows about the Google/IBM China relationship.
One big concern is with the China/Google/IBM OpenPOWER [2,3] collaboration. Advanced hardware chip technology is one big thing China currently does not have.
The US doesn't want the Google/IBM OpenPOWER Foundation to hand China the keys to the kingdom in the form of advanced microprocessor chip technology and know-how, thus giving away the US hardware chip advantage, i.e. gifting the gap...
~> IBM Venture with China Stirs Concerns (2015) https://www.nytimes.com/2015/04/20/business/ibm-project-in-c...
~> China has never had a real chip industry. Making AI chips could change that (2018) https://www.technologyreview.com/s/612569/china-has-never-ha...
[1] https://innovation.defense.gov