The more certain short-term effect is that US investors are still interested Chinese AI Startup A lot of hard work will have to be done. The Treasury Department is not forming a new government committee like CFIUS that would review every transaction submitted by investors, and is instead asking them to do their homework and report back if they think a Chinese A.I. The company will be covered.
Under the new rules, even if a Chinese startup's AI model is smaller than 1025-Flop size limit, a US investor may still have a responsibility to inform the Treasury Department about its transactions and the homework they have done, as long as its model is at least 1023 Flops (essentially encompassing all large-scale models developed today and in the future). In effect, this means that the US government is creating its own system to monitor the overall flow of funds from US investors to Chinese companies working on AI.
International trade lawyer Robert A. of the law firm Holland & Knight. “It would require significant due diligence by U.S. investors to confirm that a transaction is outside the scope,” Friedman says. He says that while the rules have been celebrated by domestic AI companies and their supporters, they will become a hindrance to venture capitalists with international portfolios.
uncertain future
Outbound investment restrictions are set to take effect on January 2, and in the meantime, the Treasury Department is indicated Some minor changes are still underway to further clarify the rules. the officials also said They are trying to coordinate with US allies, such as the G7 countries, to introduce similar measures that would prevent Chinese AI companies from turning to VCs in Europe, Canada or Japan for restricted investments in the US.
Now, like much of the US federal government, the biggest uncertainty is how a second Trump presidency might change things. Danzman noted that many members of the venture capital community who support Trump are against the regulations introduced by the Treasury Department, so they could potentially try to lobby the president to roll them back. Many major US companies, such as Tesla and Blackstone – both led by vocal Trump-supporting billionaires – have significant investments in China and tighter barriers could have a negative impact on their businesses.
Other WIRED experts expect the new Republican administration, which will include several Chinese tycoons like Rubio, will expand the scope of the regulations. “It's possible that we could see a new executive order. Or, given a unified Republican government, perhaps expansion would occur through legislative action,'' Kilcrease says. This could mean more measures to target other types of Chinese startups in sectors ranging from biotechnology to batteries.
The Biden administration's technology policy toward China has been defined, at least in theory, by the idea of ”small yard, high fence,” or in other words, designating relatively narrow areas where the U.S. government can impose very strict restrictions. Can apply. The latest version of the outbound investment rules is an example of what that idea looks like in action. But under Trump, Chinese companies can see just how big the yard can really get.