The U.S. Treasury Department has proposed a new rule to curb American investments in critical high-tech sectors in China and other adversarial nations, signaling a significant escalation in efforts to prevent U.S. capital from bolstering foreign military power. The proposed regulations target investments exceeding $50,000 in areas such as supercomputing, artificial intelligence, and biotechnology.
The rule, which implements the Comprehensive Outbound Investment National Security Act passed by Congress in December 2025, aims to prevent U.S. investment from accelerating military-relevant capabilities in countries of concern, including China, Russia, North Korea, and Iran. “The screening of outbound investments recognizes that capital can accelerate military-relevant capabilities just as surely as technology transfer can,” said Craig Singleton, a senior fellow at the think tank Foundation for Defense of Democracies.
Treasury has identified supercomputing, artificial intelligence (termed “superintelligence” or SI by the department), biotechnology, and hypersonic systems as key areas of focus. Jason Chipman, a partner at the law firm WilmerHale, noted that the rule “will require more substantial compliance programs to manage risk” for businesses.
The proposal comes after years of U.S. efforts to restrict such investments, which began in 2023 with an executive order by then-President Joe Biden. The proposed rule will be open for public comment before a final version is issued. “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 former U.S. trade official Ryan Majerus.
In response, China’s Foreign Ministry stated that the U.S. should adhere to market economy principles and cease interfering in normal economic activities. Ministry spokesperson Mao Ning criticized the proposal, saying, “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.” China indicated it would monitor developments and take necessary measures to protect its interests.
The U.S. and China have been engaged in a significant economic and technological rivalry since the Trump administration, involving restrictions on sensitive technology exports and tariffs.
