US to ban outbound investments in China’s chips, AI over national security

The US will ban outbound investments in China’s semiconductors, quantum technologies and artificial intelligence from January 2 if they are deemed to threaten American national security, a key move in the Biden administration’s efforts to address concerns about the mainland’s progress in advanced technologies, Report informs referring to the South China Morning Post.

The US Treasury released final rules on Monday to prohibit engagement in certain transactions with mainland China, Hong Kong and Macau involving “a defined set of technologies and products” that pose a national security risk, according to the department, requiring them to notify Treasury of such transactions.

In a statement, Treasury said the transactions would cover technologies in semiconductors and microelectronics and quantum-information technologies as well as AI, which it described as “fundamental to the development of the next generation of military, surveillance, intelligence and certain cybersecurity applications” such as next-generation fighter jets.

Senior officials in the administration of US President Joe Biden said the rules would ensure that US investments were not “exploited” in developing advanced technologies that would fuel the modernization of China’s military.

The investment ban would apply to direct or indirect investments such as those using AI models to improve targeting intelligence or autonomous weapon systems through a Chinese parent company, the official added, as well as the development of an AI system designed exclusively or intended for a military venue.