US Treasury proposes a rule to crack down on high-tech investments in China, other adversaries

WASHINGTON (AP) — The U.S. Treasury Department proposed a rule Thursday to crack down on American high-tech investments such as supercomputing and artificial intelligence in China, Russia, North Korea and other “countries of concern.’’

The U.S. government has been working for years to deny China and other adversaries investments that could help them boost their military power.

That program began in 2023 when then-President Joe Biden signed an executive order putting restrictions on outbound U.S. investments in sectors such as semiconductors, quantum computing and artificial intelligence going into China. Treasury later established the Outbound Investment Security Program.

In December 2025, Congress passed a law that codified and expanded the program to target more technologies and more foreign countries, including Cuba, Iran, North Korea and Russia.

The inclusion of Russia in the proposed rule has come days after Trump waived sanctions on Russia following a diesel deal with President Vladimir Putin.

The rule announced Thursday would expand the restrictions to cover investments in hypersonic systems (capable of traveling at five times the speed of sound), supercomputing, biotechnology and artificial intelligence, though Treasury used President Donald Trump’s favored term for AI, “superintelligence” or SI.

Treasury’s rule to implement the 2025 law — the Comprehensive Outbound Investment National Security Act — would only apply to investments that exceed $50,000 and would exclude many financial investments, including stock purchases.

Treasury will hear public comments on the proposal before issuing a final rule.

Since Trump’s first term, the United States and China — the world’s two biggest economies — have been locked in an economic and tech rivalry. They’ve restricted the export of sensitive technology and critical products (China’s rare earth minerals, America’s advanced computer chips) to each other and slapped tariffs on each other’s products. Trump and Chinese President Xi Jinping agreed last year to ease tensions while they engaged in talks, a temporary truce they last month extended into January.

But the sparring continues. In July, the Treasury Department issued a $200,000 fine against a U.S.-based company for failing to report to the department a $92,500 investment in a Chinese artificial intelligence and robotics company by one of its subsidiaries.