Biden considers options to limit US tech investment in China

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While no action is imminent, a separate lawsuit against TikTok Inc., the wildly popular video-sharing app, is a possibility. According to the source, the Commerce Department may impose additional limitations on processors used for AI computation. Another of the people said the White House is also in talks with Congress about legislation that would require companies to report in advance any potential investments they might make in specific Chinese industries.

Forming a system that would grant the government the power to ban investment outright is one of the ideas being explored, the source said. Stating that the executive order was part of a larger strategy, the person mentioned how the United States had recently limited semiconductor sales to China and Russia. A comprehensive anti-competitive package, which includes $52 billion to support domestic semiconductor research and development, was signed into law by Biden last month.

Friday evening, the White House declined to comment. A request for comment was not immediately answered by TikTok staff. According to a statement earlier this week from the department’s press office, the Commerce Department plans to have an update on measures to protect Americans’ data from foreign apps before the end of the year.

Because China is the world’s largest consumer of semiconductors and has the most electronics facilities, US companies are subject to increased regulatory scrutiny over what they sell to China. Washington has enforced stricter regulations on exports to the country, saying it poses a security risk.

After the chipmaker warned that new export regulations for certain artificial intelligence processors could impact hundreds of millions of dollars in revenue, Nvidia Corp. fell on Thursday. Some say the executive order aims to address some of the issues raised by the National Critical Capacities Defense Act, which was introduced by Pennsylvania Democrat Bob Casey and Texas Republican John Cornyn. With no decision made, people familiar with the administration’s deliberations spoke on condition of anonymity. Previously, Semafor covered the intentions of an executive order.

So far, the United States has maintained a patchwork of policies that have avoided completely excluding the Chinese from the semiconductor industry. It focuses on identifying specific companies it accuses of posing a national security threat, such as Huawei Technologies Co. and Semiconductor Manufacturing International Corp. The allegations are refuted by both companies.

Recent actions suggest the administration is moving toward a tougher stance of barring Chinese people from large areas of technology. The Biden administration is closely monitoring TikTok to see if the Chinese government has access to US users’ personal information. Following President Donald Trump’s failed attempt to ban the app in the United States, the company, whose parent company is Beijing-based Bytedance Ltd., informed Congress that it had taken precautions to protect US user data, including through an agreement with Oracle Corp. .

Since 2019, venture capital deals and dollars invested in Chinese digital startups have increased significantly. According to data firm PitchBook, these investments totaled $118 billion last year, which is the second highest amount on record. US-based venture capital firms were involved in about a fifth of these deals.

Many countries are beginning to be wary of China’s huge tech companies. For example, during a recent one-on-one debate with Rishi Sunak in their bid to succeed Boris Johnson as Prime Minister, British Foreign Secretary Liz Truss promised tough action. against companies like TikTok.

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