The White House is restricting AI and chip investments to China due to national security concerns

The Treasury Department today issued a final rule aimed at limiting and monitoring U.S. technology investments in China in an effort to strengthen national security.

The main areas of investment are artificial intelligence, computer chips and quantum computing. The final rules build on a executive order issued by President Biden in 2023, which discouraged Americans and American companies from investing in Chinese sectors to thwart China’s military and intelligence capabilities.

White House officials said such investments “pose a particularly acute national security risk” for the US. Paul Rosen, the assistant secretary of the Treasury for investment security, explained that one of the dangers lies in China’s ability to vastly improve cybersecurity applications involving code. -breaking computer systems or next generation fighter jets. He said there are also “intangible benefits,” including helping China’s day-to-day operations, finding other forms of financing and hiring the best talent.

“The People’s Republic of China, as you know, has a stated goal of developing key sensitive technologies that will directly support the People’s Republic of China’s military modernization and related activities, including weapons development, and has leveraged U.S. investments to support domestic military and develop intelligence capabilities,” said another White House official.

The dominion is one of the few areas receiving support from both Republicans and Democrats in what has become a tense relationship between China and the US, amid forecasts of a future war. Former President Donald Trump has said he will massively increase taxes on all imports from China if he becomes president for a second time, while President Biden has tried to do that. slow down Chinese microchip production.

Under the new rule, anyone in the US considering investing in China will have to notify the Treasury Department if the business is related to the mentioned technologies. Violators may be fined up to $368,136 or twice the value of the transaction, whichever is greater.

“This Final Rule takes targeted and concrete steps to ensure that American investments are not exploited to advance the development of key technologies by those who could use them to threaten our national security,” Rosen said.

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