The Biden administration said it is in the final stages of drafting rules limiting U.S. artificial intelligence and tech sector investments in China that could potentially jeopardize U.S. national security.
The new rules, effective January 2, 2025, cover semiconductors and microelectronics, quantum information technologies, and specific artificial intelligence systems. The Treasury’s newly created Office of Global Transactions will oversee their enforcement.
“U.S. 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,” said Paul Rosen, a senior official with the Treasury, in an October 28 press release.
Earlier this year, The Dallas Express reported that President Biden requested that shipments of chipmaking machinery from Dutch multinational ASML Holding NV destined for China be stopped. The move was part of the administration’s broader effort to slow Beijing’s attempts to build an advanced domestic semiconductor industry.
The latest rules are meant to clarify and complement existing trade restrictions. For example, American individuals and companies will be prohibited from acquiring equity in Chinese AI firms with a military application focus. However, certain exemptions will exist, like investments in publicly traded securities.
“The Biden-Harris Administration is committed to protecting America’s national security and keeping critical advanced technologies out of the hands of those who may use them to threaten our national security. Artificial intelligence, semiconductors, and quantum technologies are fundamental to the development of the next generation of military, surveillance, intelligence, and certain cybersecurity applications like cutting-edge code-breaking computer systems or next-generation fighter jets,” Rosen continued in the press release.
“This Final Rule takes targeted and concrete measures to ensure that U.S. investment is not exploited to advance the development of key technologies by those who may use them to threaten our national security,” he added.