U.S. finalizing rules to ban certain investments in AI tech in China

In Brief

President Joe Biden’s administration says it’s finalizing rules to curb investments in AI and other tech sectors in China, Reuters reports.

The rules, which were first proposed in June by the U.S. Treasury and directed by an executive order President Biden signed in August 2023, cover certain AI systems, quantum information systems, and semiconductors and microelectronics. Specifically, the rules pertain to technologies core to military and surveillance systems, like code-breaking computer systems and next-generation fighter jets.

Beginning January 2, investors will be banned from funneling capital and “intangible benefits,” like managerial assistance and access to investment and talent networks, to help China and other “countries of concern” develop military, intelligence, and cybersecurity capabilities.

Overseen by Treasury’s newly created Office of Global Transactions, the new rules contain a carve-out allowing U.S. investment in publicly traded securities. But previous executive orders bar the buying and selling of securities of certain “designated” Chinese companies.

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