U.S. Treasury Proposed Rule Expanding Outbound Investment Restrictions on Chinese AI

The U.S. Treasury proposed a rule barring Americans from investing in any Chinese company that develops AI systems, expanding the current rule that only covers the most powerful Chinese AI models. It adds high-bandwidth memory, photonic and radiation-hardened chips to banned chip types, adds hypersonic weapons and biotech as prohibited sectors, and extends coverage to Russia, Iran, North Korea and Cuba. Public stocks, index funds and small fund stakes up to $2M remain allowed; with no published list of banned companies, investors must screen each deal themselves or face fines and forced divestment.