U.S. investors will soon be unable to invest in the most advanced Chinese technology.
US President Joe Biden signed an executive order prohibiting and regulating any U.S. financial support for advanced computer chips, quantum computing, and artificial intelligence (AI) in the world's second-largest economy.
The president said that while «open investment is the cornerstone of our economic policy,» he was concerned that US investment could fund technologies used «to counter the capabilities of the United States and its allies.»
In other words, Biden is concerned that venture capitalists and private equity firms craving for profits may end up funding Chinese weapons through the back door.
This ban demonstrates how advanced technology, in particular AI, has become the West's new Cold War front against China.
barriers to prevent the use of artificial intelligence for sinister purposes, but Beijing has no such doubts. Photo: Saul Loeb/AFP
According to Alan Woodward, a computer science expert at the University of Surrey, advances in artificial intelligence have gained headlines thanks to the popularity of ChatGPT, but other advanced forms of technology have huge potential to be used for more sinister purposes.
Artificial intelligence systems nominally intended for civilian use could find applications in weapon targeting systems, autonomous drones, or advanced cyber weapons.
The technology could also be designed to «automatically find vulnerabilities» in computer software . or used in «attacks such as spreading disinformation,» he says.
Western governments have put up barriers to stop technology being used for these purposes without permission and oversight. However, Beijing has no such doubts.
«China does not have such restrictions — why shouldn't it build autonomous weapons?» Woodward says.
Many. Concerns about AI military capability are in Taiwan, where China is ramping up its aggression. On Thursday, Beijing sent naval ships and a large group of fighter jets towards Taiwan.
Owen Tedford of Beacon Policy Advisors said: «There is a belief that the US Capitol should not fund these advanced technologies that could threaten or change the military balance of power in the Pacific.»
It is these concerns that are causing concern. spurred Washington to action. Biden now hopes that US allies will follow suit.
«The administration believes we operate more effectively, we operate more reliably when we act with our allies and partners,» a White House spokesman said Wednesday.
06:05 AI Impact
Rishi Sunak will now be forced to impose a similar ban on UK investment in Chinese AI and quantum technology.
Tedford said: «The White House is reaching out to allies to try to invite them on board so that capital does not come from Western sources.”
The US has already successfully pressured allies, including the UK, to remove Huawei from sensitive communications infrastructure, showing they have significant influence when it comes to China.
Robert Gardner, director of government affairs at Hogan Lovells and formerly in the cabinet, says the impact of the ban could actually boost Sunak's internal AI ambitions.
“The government is very committed to making the UK a global technology hub and one of its five technologies of tomorrow is artificial intelligence.
“Ministers would prefer to invest in the UK, and in particular in artificial intelligence, rather than traveling abroad, and not only abroad, but also abroad, to China. which continues to pose a threat to the stability of the UK.”
A spokesman for the prime minister said: «The UK will take a close look at these new measures as we continue to assess the potential national security risks associated with certain investments.» The US has banned the «anti-globalism» sign and said China «reserves the right to take action» in response.
However, while the measure has sparked anger in China, experts say it's actually quite limited.
Dan Ives, technical analyst at Wedbush Securities, says the new US rules were «narrower than feared.»
Tedford says Biden is trying to balance security concerns with potential AI to stimulate the economy.
“Part of the problem, and one of the delays as to why it took so long for even this proposal to be published, is that the White House was concerned about making rules that were too broad, which impacted commercial use too much. artificial intelligence,” he says.
Thus, the legislation will target artificial intelligence systems, which are mainly used for military purposes.
Some investors are already shunning China amid rising tensions in recent years. Still, according to Tedford, at least hundreds of millions of dollars will be at stake.
U.S. investors have quietly poured money into Chinese ventures in artificial intelligence, facial recognition, and quantum computing in recent years, leading to rapidly rising prices. offered a lucrative return.
Some investments have proven particularly controversial.
US pension funds and universities have invested in Chinese AI companies SenseTime and Megvii. The pair are known as the «little dragons» of China's billion-dollar artificial intelligence.
Both have developed advanced face and image recognition software used by China's police and security services. These enterprises were blacklisted by the United States for several years and accused of being «part of the Chinese military-industrial complex.»
The companies have faced accusations that they organized mass surveillance in Xinjiang province, where China is accused of human rights violations against the Muslim minority. Both issued denials.
The world leader in artificial intelligence is already using this technology in a number of systems, including surveillance systems. minority groups such as the Uighur Muslims in Xinjiang. Photo: Matt Dunham/AP
China has been accused of developing artificial intelligence tools that can racially profile members of the Uyghur minority, identify them in crowds and alert authorities. Governments have banned the app due to data security concerns.
Some of the biggest investors in Bytedance, the owner of TikTok, are US and UK funds, including General Atlantic, Baillie Gifford and Beijing-based Silicon Valley Investment. Sequoia company. Bytedance insists that TikTok is not partnering with the Chinese Communist Party or improperly collecting user data.
Richard Windsor, an analyst with Radio Free Mobile, said most foreign investors are already «spooked» by Beijing's crackdown on the tech sector.
However, even if the Biden ban turns out to be symbolic and the risks are small, Woodward says the political calculation is relatively simple.
“It seems reckless to fund something that could come back and bite you».
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