U.S. proposes new rules to limit high-tech investments in key countries

The U.S. Treasury Department announced new rules Thursday to restrict American investments in high-tech sectors like artificial intelligence, supercomputing, and biotechnology in countries deemed 'countries of concern,' including China, Russia, North Korea, Cuba, and Iran. The proposal expands on a 2023 executive order by President Joe Biden and a 2025 law that broadened the Outbound Investment Security Program. The rule, part of the Comprehensive Outbound Investment National Security Act, would apply to investments over $50,000 and exclude many financial investments. Craig Singleton of the Foundation for Defense of Democracies noted the move sends a signal that Washington is monitoring U.S. capital flows. Jason Chipman of WilmerHale emphasized the need for stronger compliance programs. The U.S. and China, the world’s two largest economies, have been in a tech and economic rivalry, with both restricting sensitive technologies and imposing tariffs. The Treasury recently fined a U.S. company $200,000 for failing to report a $92,500 investment in a Chinese AI company. In response, the Chinese Foreign Ministry criticized the U.S. for overextending national security and interfering in trade. The rule is set to undergo public comment before finalization, with experts noting it is the first step toward more enforcement.