US Treasury Department finalizes rule curbing tech investments in China

The U.S. Department of Treasury finalized a Biden Administration rule today restricting certain high-tech investments and exports to China.

The technologies covered include semiconductors, microelectronics, quantum information technologies and artificial intelligence.

“This narrow set of technologies is core to the next generation of military, cybersecurity, surveillance, and intelligence applications,” the White House said, in a statement.

This Final Rule, Executive Order 14105, prohibits U.S. companies or persons from engaging in “transactions involving a defined set of technologies and products that may contribute to a threat to the national security of the United States.”

This rule could affect a plethora of U.S.-based semiconductor and other tech companies that receive sometimes substantial portions of their revenue from China, such as Nvidia (NASDAQ:NVDA), Super Micro Computer (NASDAQ:SMCI), Micron Technology (NASDAQ:MU), Broadcom (NASDAQ:AVGO), Qualcomm (NASDAQ:QCOM) and Intel (NASDAQ:INTC).

“This Final Rule takes targeted and concrete measures to ensure that U.S. investment is not exploited to advance the development of key technologies by those who may use them to threaten our national security,” said Paul Rosen, Assistant Secretary for Investment Security.

“U.S. investments, including the intangible benefits like managerial assistance and access to investment and talent networks that often accompany such capital flows, must not be used to help countries of concern develop their military, intelligence, and cyber capabilities,” he added.

The announcement today was a final step in the process from when U.S. President Joe Biden first signed the executive order on this issue in August 2023.

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