A proposed rule would ban U.S. investors from funding AI systems in China that could be used for weapons targeting or other military purposes.
The U.S. Treasury Department has drafted a rule that would limit and monitor U.S. investments in China in artificial intelligence, computer chips and quantum computing.
The detailed draft regulations, released Friday, stem from President Joe Biden’s August executive order regarding “countries of concern” access to U.S. dollars to finance advanced technologies that could improve military, intelligence, surveillance and cyber security of these countries. The executive order identified China, Hong Kong and Macau as countries of concern.
The Biden administration has sought to thwart the development of technologies by China, the world’s second-largest economy, that could give it a military advantage or allow it to dominate emerging sectors such as electric vehicles (EVs).
In addition to the proposed rule, Biden, a Democrat, also placed a High tariffs on Chinese electric vehiclesa question with political implications as Biden and his Republican presidential opponent, Donald Trump, both try to show voters who can best stand up to China, a geopolitical rival and major trading partner.
The proposed rule outlines the required information that U.S. citizens and permanent residents must provide when transacting in this area, as well as what would be considered a violation of the restrictions.
It would specifically prohibit U.S. investors from funding AI systems in China that could be used for weapons targeting, combat and location tracking, among other military applications, according to a senior Treasury official who spoke to reporters on condition of anonymity about the rule.
The U.S. Treasury is seeking comments on the proposal until August 4 and is then expected to issue a final rule.
Biden administration officials, including Treasury Secretary Janet Yellen, have insisted they have no interest in “decoupling” from China – however, tensions between the two nations have increased in recent times years.
After the US military shot down a suspected Chinese spy balloon off the U.S. east coast, after passing through sensitive military sites in North America, China has threatened repercussions.
Since then, incidents between the two nations based on national security concerns have occurred regularly.
For example, in May, Biden issued an order barring a Chinese-backed cryptocurrency mining company from owning land near a nuclear missile base in Wyoming, calling its proximity to the base a “national security risk.”
