The U.S. Department of the Treasury announced on Wednesday (October 7th) that it has imposed a fine on a Silicon Valley company that invested in an artificial intelligence (AI) robot enterprise in Shanghai, China. This marks the first enforcement case under the United States’ “Outside Investment Security Program” (OISP).
According to a statement posted on the Treasury Department’s official website, the parent company of the well-known Silicon Valley startup accelerator and investment firm “Plug and Play Tech Center,” Amidi, has been fined $200,000 for not reporting its investment in a Shanghai-based AI robot enterprise. Amidi’s subsidiary fund, “Plug and Play China,” invested approximately $92,000 in Shanghai Noematrix Intelligent Technology Co., Ltd. on April 19, 2025. After the investment, Amidi failed to submit the required notice to the Treasury Department.
The fine was issued by the Treasury Department in July but was only made public on Wednesday. The fine amount exceeds twice the investment in the Chinese company. The Treasury Department did not provide details on how the $200,000 fine was calculated.
Around 2015-2016, the “Plug and Play Tech Center” expanded into the Chinese market, setting up the Beijing-based “Plug and Play Entrepreneur Investment Limited Company” in China, and subsequently establishing innovation centers and offices in over 20 cities including Shanghai, Shenzhen, Wuhan, and Changzhou. The team, part of the raised Renminbi funds, and investment management are all operated independently or in cooperation by local Chinese teams.
Treasury Secretary Scott Bessent stated that this announcement demonstrates the Treasury Department’s commitment to safeguarding U.S. national security through investment security measures.
Assistant Secretary Christopher Pilkerton, responsible for investment security affairs, stated, “We will continue to ensure that investors comply with the requirements of the program.”
The U.S. Treasury Department revealed that this transaction was discovered through routine compliance checks and market monitoring.
The announcement did not describe the investment as a prohibited transaction, nor did it accuse Noematrix of any misconduct, but it emphasized that Amidi’s violation was failure to submit the notice.
According to public records, Noematrix was established in November 2023 in Shanghai and focuses on research and development of “Embodied AI” large models and general intelligence robot systems, a cutting-edge hard technology enterprise.
“Embodied AI” technology enables robots to understand the surrounding environment and perform physical tasks, with applications in logistics, home services, and food processing.
The company was co-founded by Professor Lu Cewu, Vice Dean of the Artificial Intelligence Institute at Shanghai Jiaotong University, and strategically incubated by the general robotics company Flexiv in its early stages.
According to the financing history records publicly available on third-party venture capital platforms, such as the 36Kr venture capital platform PitchHub, funding announcements for Noematrix listed investors like “Plug and Play China” fund and Saudi Aramco’s venture capital fund “Prosperity7 Ventures.”
The “Outside Investment Security Program” (OISP) came into effect on January 2, 2025, primarily regulating U.S. funding for sensitive technology enterprises in China, such as artificial intelligence, semiconductors, and quantum computing.
The program directly prohibits certain investments to China and requires notification to the Treasury Department for other investments flowing into China.
Regulated investment targets include companies located in mainland China, Hong Kong, or Macau, or entities associated with these regions. The regulations also apply to overseas entities controlled by U.S. individuals.
Furthermore, the U.S. Congress passed the Comprehensive Outside Investment National Security Act (COINS Act) on December 18, 2025, expanding the coverage of the program to more countries and technology sectors.