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US Treasury proposes rule to expand restrictions on investments in China and other adversaries
The U.S. Treasury proposed blocking or requiring notification for investments over $50,000 in AI, supercomputing, and other tech sectors in China, Russia, and North Korea.
The U.S. Treasury Department proposed a rule Thursday to restrict American investments in supercomputing, artificial intelligence, and other high-tech sectors in China, Russia, North Korea, and several other countries. The regulation, which would implement the 2025 Comprehensive Outbound Investment National Security Act, expands a program that began under then-President Joe Biden in 2023 and now covers a wider set of technologies and adversary nations.
The proposed rule would block or require notification for U.S. investments exceeding $50,000 in areas including hypersonic systems, supercomputing, biotechnology, and what Treasury calls "superintelligence" - the Trump administration's preferred term for artificial intelligence. Stock purchases and many passive financial investments would remain exempt.
Expanding the scope of outbound investment controls
The original restrictions, launched via Biden's 2023 executive order, targeted semiconductors, quantum computing, and AI investments flowing into China. Congress codified and broadened that framework in December 2025, adding Cuba, Iran, North Korea, and Russia to the list of covered nations. The inclusion of Russia arrives days after President Donald Trump waived certain sanctions on Moscow following a diesel agreement with President Vladimir Putin.
"The proposed rule sends an important signal to markets that Washington is tracking where U.S. capital is flowing and what capabilities it is helping build," said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies. He added that screening outbound investments "recognizes that capital can accelerate military-relevant capabilities just as surely as technology transfer can."
Compliance burden and enforcement expectations
The rule will require companies to build more substantial compliance programs, according to Jason Chipman, a former Justice Department lawyer now at WilmerHale. "It's just the first step in a fairly long process to get to changes which presumably will be more enforcement-minded, to put more teeth behind the outbound investment program," said Ryan Majerus, a former U.S. trade official and now partner at King & Spalding.
Treasury has already shown willingness to penalize violations. In July, the department issued a $200,000 fine against a U.S.-based company that failed to report a $92,500 investment by one of its subsidiaries in a Chinese AI and robotics firm. The agency will accept public comments before issuing a final rule.
China's response and the broader tech rivalry
Beijing pushed back on the proposal. Chinese Foreign Ministry spokesperson Mao Ning said the U.S. should "stop interfering in normal economic and trade cooperation between businesses." She warned that "overstretching the concept of national security, taking discriminatory measures against specific countries, and artificially restricting trade, economic and investment activities serve no one's interests," adding that China would take necessary measures to protect its interests.
The two largest economies have been locked in a technology standoff since Trump's first term, exchanging export controls on sensitive items - from advanced computer chips to rare earth minerals - and imposing tit-for-tat tariffs. Trump and Chinese President Xi Jinping agreed last year to ease tensions, extending a temporary truce into January, but the sparring has continued.
Why this matters for executives, legal, and compliance professionals
The proposed rule signals a structural shift in how Washington views capital flows - treating investment as a national security vector alongside technology transfer. For legal and compliance teams at firms with any exposure to AI, biotech, supercomputing, or hypersonics, this means building or reviewing outbound investment screening protocols now, before the final rule takes effect. The $50,000 threshold is low enough to capture venture investments and early-stage deals that may have previously flown under the radar. Professionals responsible for regulatory affairs can benefit from targeted training on evolving frameworks - AI Regulatory Compliance Courses offer structured guidance for navigating rules at the intersection of technology and national security.