US tightens rules on high‑tech capital to China

The U.S. Treasury Department has unveiled proposed rules to tighten controls on American investments in sensitive high‑tech sectors in China and other countries of concern. The plan would screen and, in some cases, prohibit outbound capital flows into technologies seen as relevant to military and security capabilities. Treasury has opened a public comment period on the draft before moving to a final rule.

The initiative focuses on investments that could help build advanced capabilities in rival states, signaling that U.S. authorities are tracking not only technology transfers but also the role of capital in accelerating them. Officials describe the effort as part of a broader outbound investment security program aimed at addressing national security risks.

The outbound investment program initially focused on China but was broadened under the Comprehensive Outbound Investment National Security (COINS) Act passed in December 2025. That law expanded coverage to additional foreign countries, including Cuba, Iran, North Korea and Russia, identified as countries of concern. Treasury’s new proposal applies to investments involving China, Russia, North Korea and other designated jurisdictions.

On the technology side, the proposed rule targets sectors viewed as strategically sensitive. Restrictions would apply to investments linked to hypersonic systems capable of traveling at five times the speed of sound, supercomputing, biotechnology and artificial intelligence, which the proposal refers to using the term “superintelligence.” Treasury has determined that these areas pose heightened national security risks when developed in countries of concern.

Under the proposal, Treasury would not seek to block all investments in countries of concern. Instead, the rules would focus on specific investments in entities involved with dual‑use technologies that can benefit military programs, surveillance states or governments associated with human‑rights abuses. U.S. firms and individuals would be required to notify Treasury about prospective investments in six sectors across five designated countries.

The framework draws a clear line on artificial intelligence, with proposed outright bans on AI‑related investments in the covered countries. Treasury said it opted for a ban in light of rapid advances in the field that complicate attempts to regulate or distinguish the most advanced models. Other sectors would be subject to notification and potential prohibition depending on the national security assessment.

The draft rule includes several thresholds and carve‑outs. It would only apply to transactions exceeding $50,000 in value and would exclude many financial investments such as stock purchases in publicly traded companies. Treasury also plans to permit investors to request exemptions for deals deemed to be in the national interest of the United States.

Treasury has adjusted the list of countries subject to the outbound investment regime as political conditions evolve. Venezuela, which was originally included as a country of concern under the COINS Act when Nicolas Maduro was in power, has been removed from the core list. Treasury stated that Maduro’s government no longer exists following his capture in January and that the current government led by Delcy Rodriguez does not meet the statutory definition, although some Venezuelan entities could still fall under the rule.

Officials emphasize that the aim of the outbound program is to ensure the U.S. government can monitor and, where necessary, prohibit investments that create national security risks. The program is intended to address not only the capital flows themselves but also the networks and supply chains that arise from cross‑border investment, which are seen as difficult to manage through export controls alone. The new proposal marks an implementation step for the COINS Act’s expanded authorities over sectors such as biotechnology and other emerging technologies.