The government posting indicates that US regulations that would prohibit specific US investments in artificial intelligence in China are now being finalized, indicating that the limits may be implemented soon. The regulations, which also mandate that US investors inform the Treasury Department of some investments in artificial intelligence (AI) and other sensitive technology, are the result of an executive order signed by President Joe Biden in August 2023 with the goal of preventing US investors’ expertise from supporting China’s military.
According to the posting, the Office of Management and Budget is reviewing the final rules, which aim to target outbound investment to China in artificial intelligence (AI), semiconductors, microelectronics, and quantum computing. This indicates that, as has historically happened, the rules will probably be released in the coming week or two.
In reference to the US presidential election on November 5, former Treasury official Laura Black, a lawyer at Akin Gump in Washington, stated, “It looks to me like they’re trying to publish this before the election.” According to Black, the Treasury office in charge of the regulations usually gives at least 30 days’ notice before they take effect.
In June, the Treasury Department released proposed guidelines with a number of exclusions and invited public opinion. It is up to US individuals and businesses to decide which transactions will be banned under the draft regulations.
A representative for the Treasury Department chose not to comment.
Black anticipates that the final regulations will provide additional clarification regarding the extent of artificial intelligence coverage and the threshold for limited partners.
The proposed regulations prohibited transactions employing AI for specific purposes and systems that had been trained to consume a given amount of processing power. They mandated that transactions involving the creation of semiconductors or AI systems that were not otherwise forbidden be notified.
The suggested exceptions included some limited partnership investments, publicly traded securities like mutual funds or index funds, and specific syndicated debt financings.
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