Investing in AI: US government ready to impose strict rules

Technology: Big changes for US investors in China

The US government is set to impose strict regulations that will significantly hinder US investments in China’s artificial intelligence sector. This development, which is currently under final review, indicates that a major change in investment policies is imminent.
The new proposed rules will mandate US investors to inform the Treasury Department about investments in AI and various sensitive technologies. The upcoming rules derive from an executive order signed by President Joe Biden in August 2023, which is designed to thwart the use of US expertise in aiding the Chinese military.
The upcoming rules will specifically limit foreign investment in critical sectors such as AI, semiconductors, microelectronics, and quantum computing in China. This regulatory framework is currently under scrutiny by the Office of Management and Budget, suggesting that formal announcements could be made within weeks.
Legal experts are speculating that these rules could be implemented ahead of the upcoming elections. Observations show that the Treasury Department typically implements a grace period of at least 30 days before new rules take effect, giving investors time to adjust.

After an initial reaction phase following the White House’s release of the order, the Treasury Department is now unveiling the proposed rules with several exceptions. These measures are intended to ensure that US technologies do not inadvertently promote China’s development of advanced capabilities.