The U.S. Treasury Department proposes banning Americans from investing in Chinese companies that develop any AI system
The U.S. Treasury Department proposes banning Americans from investing in Chinese companies that develop any AI system. Current rules only restrict investment in the most powerful Chinese AI models; smaller AI projects can still receive funding after reporting to the Treasury Department. The new proposal would comprehensively ban such AI investment and add high-bandwidth memory, photonic chips and radiation-hardened chips to the banned chip categories. The proposal also adds two prohibited investment areas, hypersonic weapons and biotechnology (including brain-computer interfaces and automated laboratory software), and expands the restricted countries from China to Russia, Iran, North Korea and Cuba; purchases of public stocks, index funds or small fund shares of no more than $2 million are still allowed, so it mainly affects venture capital and private equity deals, and the Treasury Department will not publish a banned list, so investors must check each transaction themselves.
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The proposal expands U.S. restrictions on AI investment in China from the most powerful models to all AI systems, and adds the chip and biotechnology sectors, so readers can use it to judge the compliance boundaries of venture capital and private equity deals.
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The U.S. Treasury proposed barring Americans from investing in Chinese companies that develop any AI system.
Under the current rule, Americans can’t invest in the most powerful Chinese AI models, but they can still fund smaller AI projects if they report the deal to Treasury.
The new proposal would ban all of those AI investments, and it would also add high-bandwidth memory, photonic chips and radiation-hardened chips to the chip types Americans can’t invest in.
The proposal would also ban investments in two new areas: hypersonic weapons and biotech, including brain-computer interfaces and automated lab software.
Today the rule covers only China, but the proposal adds Russia, Iran, North Korea and Cuba.
Buying public stocks, index funds or small fund stakes up to $2M would stay allowed, so the rule mainly hits venture and private equity deals.
Treasury won’t publish a list of banned companies, so investors must check each deal themselves or risk fines and being forced to sell.