U.S. proposal to curb AI, chip investment into China under final review

Measures aimed at curbing U.S. investments into China in sensitive technologies are in the final stage of review, a U.S. government update showed.

Under this set of rules, the Treasury Department will require notification of outbound investments into China in sensitive technologies including artificial intelligence, semiconductors, microelectronics and quantum computing that can be employed for developing military capabilities.

The final rules will likely be released within the “next week or so,” according to Reuters.

The proposals are part of the Joe Biden administration’s efforts to restrict the flow of U.S. capital, technology and expertise into China that could support its military modernization and undermine U.S. national security. 

In June last year, U.S. Treasury Department released proposals that include potential outright bans on certain investments into China in these cutting-edge technologies.

“The potential military, intelligence, surveillance, and cyber-enabled applications of these technologies and products pose risks to U.S. national security particularly when developed by a country of concern such as the PRC,” the Treasury Department notification said.

Former Treasury official Laura Black said the department could be trying to make the rules official before the presidential election — which is set to take place on Nov. 5 — Reuters reported.

The Treasury had invited citizens and companies to submit suggestions for further defining the regulation’s scope, as well opinions on transactions that should be restricted.

The U.S. passed sweeping export controls starting in October 2022 aimed at restricting China’s access to advanced semiconductor technologies, particularly those used in AI applications, and has imposed a series of hefty tariffs on Chinese imports.