The short-term impact is more certain than US investors are still concerned about China’s AI startups More due diligence work will have to be done. The Treasury Department will not create a new government committee like CFIUS to review every transaction that investors submit, instead asking them to do their homework and report whether they believe a company Will China’s AI company be protected?
According to the new regulations, even if a Chinese startup’s AI model is less than 1025-flops, U.S. investors may still be responsible for informing the Treasury about their trades and the homework they did, as long as its pattern is at least 1023 failure (including essentially all large-scale models being developed today and in the future). In practice, that means the US government is creating its own system to monitor the overall flow of money from US investors to Chinese companies operating in the field of AI.
“To confirm that a transaction is out of scope, U.S. investors will have to perform due diligence,” said Robert A. Friedman, an international trade attorney at the law firm Holland & Knight. significant difference”. While the rules have been endorsed by domestic AI companies and their backers, they will become a barrier for venture capitalists with international portfolios, he said.
The future is uncertain
The foreign investment restrictions will take effect on January 2 and in the meantime, the Ministry of Finance signaled that some minor changes are still underway to further clarify the rules. official also said It is coordinating efforts with US allies, such as G7 countries, to introduce similar measures to prevent Chinese AI companies from turning to venture capital in Europe, Canada or Japan. Version for types of investments prohibited in the United States.
The biggest uncertainty today, as with most parts of the US federal government, is how a second Trump presidency might change things. Danzman noted that many members of the pro-Trump venture capital community are against the types of regulations put in place by the Treasury Department, so they may try to lobby the president to repeal them. Some major US companies, such as Tesla and Blackstone, both headed by outspoken Trump-supporting billionaires, have significant investments in China and could see their businesses negatively impacted. extreme by tighter restrictions.
Other experts WIRED spoke to expect the new Republican administration, expected to include some China hawks like Rubio, to expand the scope of the rules. “We may see a new executive order. Or, with a unified Republican government, perhaps expansion would happen through legislative action,” Kilcrease said. That could mean more measures targeting other types of Chinese startups, in sectors from biotech to batteries.
The Biden administration’s technology policy toward China has, at least in principle, been defined by the idea of “small yards, high fences,” or, in other words, designating relatively narrow areas that The US government can impose very strict restrictions. The latest version of the offshore investment rules is an example of what that idea could look like in action. But under Trump, Chinese companies may finally see how wide the field can really be.
