US finalises rules to curb AI investments in China, impose other restrictions
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The rules, effective from Jan 2, are part of a broader push to prevent US know-how from helping the Chinese to develop sophisticated technology.
PHOTO: REUTERS
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WASHINGTON – The Biden administration said on Oct 28 it is finalising rules that will limit US investments in artificial intelligence (AI) and other technology sectors in China that could threaten US national security.
The rules, which were proposed in June by the US Treasury, were directed by an executive order signed by US President Joe Biden in August 2023 covering three key sectors: semiconductors and microelectronics, quantum information technologies and certain AI systems.
The rules are effective from Jan 2 and will be overseen by the US Treasury’s newly created Office of Global Transactions.
The US Treasury said the “narrow set of technologies is core to the next generation of military, cyber security, surveillance, and intelligence applications”.
The rules cover technologies like “cutting-edge code-breaking computer systems or next-generation fighter jets”, added Mr Paul Rosen, a senior Treasury official.
He added that “US investments, including the intangible benefits like managerial assistance and access to investment and talent networks that often accompany such capital flows, must not be used to help countries of concern develop their military, intelligence, and cyber capabilities”.
The rules are part of a broader push to prevent US know-how from helping the Chinese to develop sophisticated technology and dominate global markets.
US Commerce Secretary Gina Raimondo said earlier in 2024 the rules were crucial to prevent China’s developing military-related technologies.
The new rules contain a carve out allowing US investment in publicly traded securities, but the officials said the US already has the authorities under a previous executive order barring buying and selling of securities of certain designated Chinese companies.
The House select committee on China has criticised major American index providers for directing billions of dollars from US investors into the stocks of Chinese companies that the US believes are facilitating the development of China’s military. REUTERS
