New US rules banning investments in Chinese companies developing AI and other advanced technologies used by the People's Liberation Army are causing a scramble among US investors in Chinese venture capital funds. The rules, which take effect Thursday, impose penalties for US entities investing in Chinese companies involved in semiconductors, quantum computing, or AI systems that could be used by China's military. This has led to increased due diligence burdens on US investors and a pullback in new investments in China.
US investors in Chinese venture capital funds are racing to comply with new rules banning them from backing companies that develop artificial intelligence and other advanced technologies used by the People’s Liberation Army. Measures by the Biden administration, which come into force on Thursday, impose civil and criminal penalties for US entities that invest in Chinese companies involved in semiconductors, quantum computing or AI systems that could be used by China’s military.
Investors granted assurances will have to perform due diligence to ensure the rules are being followed by their Chinese funds. This is a particular concern since the country’s laws empower the government and private individuals to take countermeasures against “discriminatory” foreign sanctions by other states.
INVESTMENT CHINA TECHNOLOGY US MILITARY
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