US to Curb AI Investment in China Soon

US to Curb AI Investment in China Soon

In Summary

  • US is finalizing rules to ban certain AI investments in China
  • New regulations stem from an executive order aimed at preventing military benefits to China
  • The rules are under review and expected to be published soon, potentially before the November 5 election
  • Exceptions include publicly traded securities and mutual funds


New York, Tuesday, October 22, 2024-The US government yesterday announced that it is finalizing rules to ban specific investments in artificial intelligence (AI) in China.

The move, which also requires US investors to notify the Treasury Department about certain investments in sensitive technologies, follows an executive order signed by President Joe Biden in August 2023.

The goal is to prevent American know-how from benefitting China’s military.

The new regulations, targeting outbound investments in AI, semiconductors, microelectronics, and quantum computing, are currently under review at the Office of Management and Budget.

This review indicates that the rules are likely to be published within the next week.

The Treasury noted that the government appears to be aiming for a rollout before the upcoming US Presidential election on November 5.

The proposed regulations come with numerous exceptions, allowing publicly traded securities like index funds and mutual funds to remain accessible.

They place the onus on US individuals and companies to discern which transactions may be restricted.

The final rules are expected to provide more clarity regarding the scope of AI coverage and the thresholds for limited partners.

A Treasury Department spokesperson declined to comment on the details.

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