Biden finalizes AI investment restrictions targeting China

The Biden administration announced new rules on Monday that will restrict US investments in advanced technologies within China, particularly focusing on AI, quantum computing, and specific microelectronics.

Initiated by an executive order from President Joe Biden in August 2023, these regulations will take effect on January 2, 2025 and be managed by the Treasury’s newly established Office of Global Transactions, per Reuters.

The rules aim to block American funds from aiding Chinese developments in military, intelligence, and cybersecurity applications. 

Paul Rosen, a senior Treasury official, emphasized that alongside capital, US expertise and networks must not support nations advancing technology with potential military applications.

Before the rules were announced, the US has been concerned that their know-how in AI and technology would fall into the hands of China, even through the Asian giants’ technology sharing with other nations.

Commerce Secretary Gina Raimondo stressed earlier this year that these safeguards are crucial to prevent Chinese advancements in defense-oriented technologies. 

However, the rules permit investment in publicly traded Chinese securities. Still, some lawmakers continue to raise concerns over American index funds channeling significant US investment into Chinese firms seen as contributors to China’s military tech expansion.

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