The United States is set to restrict investors from engaging in artificial intelligence investments in China, as per the latest information released by the U.S. government. The related regulations are currently undergoing final review, indicating that investment restrictions are on the horizon.
These regulations will also require U.S. investors to report partial investments in artificial intelligence and other sensitive technologies to the Department of the Treasury. The rules stem from an executive order signed by President Joe Biden in August 2023, aimed at preventing U.S. investors’ expertise from being used to aid the Chinese military.
The final regulations will limit outward investments in China’s AI, semiconductor, microelectronics, and quantum computing sectors, currently under review by the White House’s Office of Management and Budget (OMB). This suggests that the final rules could be announced within about a week’s time.
Laura Black, a former Treasury Department official and attorney at the Washington-based law firm Akin Gump, noted, “To me, it seems like they want to issue these regulations before the elections.” She further added that the Treasury Department office responsible for overseeing these regulations typically allows for a buffer period of at least 30 days before their enforcement.
Following the conclusion of the preliminary public comment period after the issuance of the White House executive order, the Treasury Department unveiled proposed regulations and a series of exceptions.
Black anticipates that the final rules will further clarify the scope of artificial intelligence coverage and thresholds for limited partners.
These restrictive measures are aimed at preventing U.S. proprietary technology from aiding China in developing cutting-edge technologies.
(This article is based on reporting from Reuters)