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Why European Union Fears US Ban on Chinese AI Investment

2 mins
Updated by Geraint Price
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In Brief

  • The European Union is concerned about the US restrictions on investments in Chinese AI firms, fearing it could impact European companies.
  • Senior EU officials are in talks with US lawmakers, as the restrictions may apply to US persons anywhere, impacting global business.
  • Amid this, Germany plans to toughen foreign direct investment in critical sectors such as semiconductors and artificial intelligence.
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The US and China are trying to one-up each other in the artificial intelligence (AI) race. And consequently, the European Union (EU) is worried that it could harm the business of its firms.

The US has imposed several restrictions on Chinese AI developments. While the countries are at a cold war against each other, how will it impact Europe?

EU Shares Its Concerns

According to Bloomberg, senior EU officials are worried about the US restrictions on outbound investments in certain Chinese companies. They fear that the law could impact European companies funded by US investors and run by Chinese owners.

In August, BeInCrypto reported that the Biden government passed orders to ban private equity and venture capital firms from investing in China’s quantum computing, advanced chips, and AI companies.

Read more: AI Stocks: Best Artificial Intelligence Companies To Know in 2023

Hence, EU officials are in talks with the US lawmakers regarding the matter. Nonetheless, a US Treasury Department spokesperson explained that the orders target narrowly, only to focus on the US national security interests.

But Bloomberg’s sources claim:

“Though the executive order is narrow in scope — targeting some Chinese companies working primarily in areas related to artificial intelligence, quantum computing and advanced semiconductors — it would likely apply to US persons anywhere in the world”

While the US has banned outbound investments in Chinese companies, Germany’s deputy chancellor wants to toughen foreign direct investment (FDI) in critical sectors such as semiconductors and AI.

The US has been trying to crack down on the Chinese AI developments, citing national interests. As a part of the crackdown, it introduced new chip restrictions to limit Chinese access to American semiconductors.

Read more: Will AI Replace Humans?

Do you have anything to say about the US-China AI war or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTok, Facebook, or X (Twitter).

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Harsh Notariya
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