The U.S. government is in the final stages of reviewing rules that will ban certain investments in artificial intelligence (AI) in China, with new restrictions expected to be implemented soon.
The rules, stemming from an executive order signed by President Joe Biden in August 2023, are designed to prevent American investors from aiding China’s military through technological advancement.
This move is part of a broader effort by the U.S. government to prevent the transfer of technological expertise that could help China develop advanced military capabilities.
The restrictions will target outbound U.S. investments in AI, semiconductors, microelectronics, and quantum computing, requiring investors to notify the Treasury Department about some transactions. The rules are currently under review at the Office of Management and Budget, suggesting they could be released within the next week or so.
According to former Treasury official Laura Black, there is an apparent urgency to publish these regulations before the upcoming elections, although there will likely be a 30-day window before they take effect. Black anticipates the final rules will provide further clarity on the scope of AI investments and specific thresholds for compliance.
The Treasury Department previously released proposed rules and exceptions, following a public comment period after the executive order was issued. The department has not yet responded to requests for additional details about the finalized regulations.