Three top Chinese AI firms have been told to reject US-origin capital without government approval. The directive reshapes how Washington money reaches Beijing’s strategic technology champions.
The instructions were issued by the National Development and Reform Commission (NDRC) in recent weeks. Bloomberg first reported the guidance on Friday.
Beijing Cuts Off US Capital For Its AI Giants
ByteDance, TikTok’s parent and China’s most valuable private startup, was told to block US secondary share sales without state clearance.
The instruction carries weight given ByteDance’s complex ownership structure and pool of US institutional backers. Any secondary liquidity now funnels through Beijing.
Moonshot AI, considering a Hong Kong listing, was told to refuse US capital in funding rounds and deals without approval.
The restriction complicates pre-IPO planning for a firm widely seen as China’s answer to OpenAI. Any foreign allocation will likely tilt toward Middle Eastern and Hong Kong investors.
StepFun, a Tencent-backed startup focused on multimodal and generative AI, received the same guidance as Moonshot. The company is less globally known but ranks among Beijing’s strategic AI champions.
Why China Is Gating Its AI Firms
The guidance follows Meta Platforms’ roughly $2 billion acquisition of Singapore-based Manus, a startup with deep Chinese engineering roots.
Beijing imposed exit restrictions on the co-founders of Manus and reviewed the deal for potential technology export violations.
On Wednesday, White House science director Michael Kratsios accused Chinese entities of running industrial-scale campaigns to extract US AI models.
“Foreign entities who build on such fragile foundations should have little confidence in the integrity and reliability of the models they produce,” he stated.
The Trump administration signaled new enforcement against firms using model distillation, according to reports.
The capital divide between Washington and Beijing looks set to deepen. Beijing may formalize the guidance into a published regulation over the coming weeks.
