The US government is in the final stages of reviewing rules that will ban certain American investments in artificial intelligence (AI) in China, reports Reuters.
These impending restrictions are part of an executive order signed by President Joe Biden in August 2023, designed to prevent American investors from inadvertently supporting China’s military advancements.
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As per the report, the Office of Management and Budget is currently scrutinising the final rules, which specifically target outbound investments to China in AI, semiconductors, microelectronics, and quantum computing.
Typically, such a review indicates that the rules could be published within the next week.
Laura Black, a lawyer at Akin Gump in Washington and a former Treasury official, suggested that “It looks to me like they are trying to publish this before the election,” referring to the upcoming US presidential election on 5 November 2024.
According to Black, the Treasury department that oversees these regulations typically allows a minimum of 30 days before new rules take effect.
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By GlobalDataThe proposed rules, which were open for public comment in June, required US individuals and companies to self-assess which transactions would be restricted.
A Treasury department spokesperson has declined to comment on the matter.
Black anticipates that the final rules will provide additional clarity regarding the extent of AI coverage and the threshold for limited partners.
The draft rules prohibited AI transactions for certain applications and those involving systems trained with a specified level of computing power.
They also mandated notification for transactions related to the development of AI systems or semiconductors that are not already prohibited.
Exceptions in the proposed rules included publicly traded securities such as index funds or mutual funds, certain limited partnership investments, and specific syndicated debt financings.
Additionally, last week reports emerged that the US is considering implementing export limits on advanced AI chips to certain countries, with a focus on Persian Gulf nations that are ramping up investments in AI data centres.
Preliminary discussions indicate that the US may set export license caps for countries for AI chips developed by NVIDIA and other American chipmakers such as AMD and Intel.
