Jakarta, CNBC Indonesia – The United States (US) has launched a new effort to prevent China's technological development. This time, it is stopping investment in certain technologies that are considered to threaten national security.

The effort is outlined in a draft regulation that would prohibit or require notification of investments in artificial intelligence and other technology sectors from China, especially in technologies that could threaten national security.

According to Reutersthe US is likely to enact the regulations by the end of 2024. Public comments on the draft are scheduled to be accepted until August 4.

“This proposed rule advances national security by preventing many of the benefits provided to certain investments in the United States, beyond capital, from supporting the development of sensitive technologies by countries that might use them to threaten national security,” said Assistant Secretary of the Treasury for Investment Security Paul Rosen, as quoted by ReutersMonday (24/6/2024).

Meanwhile, the Treasury Department said the new rules would aim to implement a narrower, more targeted security program, focusing on investments in countries of concern to the U.S.

The rule would exempt transactions deemed to be in the interest of the U.S., including publicly traded securities, and partnership investments to a limited extent.

There are also exceptions for purchases of state-owned interests of concern, transactions between a U.S. parent company and a majority-controlled subsidiary, binding commitments that existed before the rule came into effect, and certain debt financings.

Meanwhile, the ban will target AI transactions for a number of end uses and involving systems trained with a certain amount of computing power.

The latest order initially focused on three territories: China, Macau and Hong Kong, but U.S. officials said it could potentially apply to a wider swath of the country.

Next Article

America's Chip King Quietly in China Despite Biden Ban

(dem/dem)