The US has introduced new rules to regulate outbound investments in certain technologies, particularly those involving China. The Outbound Investment Security Program focuses on three key areas: semiconductors and microelectronics, quantum information technologies, and artificial intelligence. Covered transactions related to these technologies may be prohibited or subject to notification requirements within 30 days of closing. For instance, the development of advanced integrated circuits, quantum computers, and AI systems designed for military or surveillance use are prohibited. The rules apply to US persons investing in or collaborating with Chinese entities, including those organized and headquartered in third countries but with significant activities in China. Companies must conduct diligent inquiries to determine if a transaction is covered, considering public and non-public information, diligence requests, and representations from counterparties. Failure to comply may result in penalties. As the US tightens its grip on tech exports to China, companies like Intel, Qualcomm, and NVIDIA must navigate these new rules to ensure their investments conform to the evolving legal landscape.
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