US Treasury proposes banning all American investment in Chinese AI companies
rohanpaul_ai · x · 2026-10-23
The U.S. Treasury proposed barring Americans from investing in Chinese companies that develop any AI system. The current rule only restricts investment in the most powerful Chinese models; smaller AI deals remain allowed with reporting. The new proposal bans all such AI investment.
Key points:
- Newly restricted chip types: high-bandwidth memory, photonic chips, radiation-hardened chips
- Two new banned areas: hypersonic weapons and biotech, including brain-computer interfaces and automated lab software
- Coverage expands from China-only to Russia, Iran, North Korea and Cuba
- Public stocks, index funds and small fund stakes up to $2M stay allowed, so the rule mainly hits VC and private equity deals
- Treasury won't publish a banned-company list; investors must vet each deal themselves or risk fines and forced divestment
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