US Finalizes Rules to Curb AI Investments in China
The U.S. government is preparing to release new regulations that will restrict American investments in artificial intelligence (AI) in China. These rules, currently under final review, are expected to be implemented soon, according to a government posting.
National Security and AI Investment Restrictions
The new regulations stem from an executive order signed by President Joe Biden in August 2023. The order aims to prevent U.S. investors from unintentionally aiding China’s military by investing in critical technologies such as AI, semiconductors, microelectronics, and quantum computing.
Targeted Technologies and Upcoming Publication
The regulations are currently being reviewed by the Office of Management and Budget (OMB), which typically signals their release within a week. Laura Black, a former Treasury official, expects the final rules to be published before the U.S. presidential election on November 5th, 2024.
Focus on AI and Clarifications
The forthcoming rules are anticipated to further clarify the scope of coverage over AI and provide more details on the thresholds for limited partners. During the proposal stage in June, the Treasury Department outlined exceptions, such as publicly traded securities and certain partnership investments.
Private Sector Responsibility
The draft rules place the responsibility on U.S. individuals and companies to determine which transactions are restricted, underscoring the government’s reliance on private sector compliance in protecting sensitive technologies. The final rules will likely provide more guidance on managing these investments in alignment with national security interests.
