New to this? Read it in simple words
- The US Treasury wants to stop more American money from helping rival countries build key technologies.
- Investing in companies there that develop AI would be banned, with some exceptions.
- The rules would also cover Russia, Iran, North Korea and Cuba, not only China.
- People can comment until December 7, 2026, and nothing changes before a final rule.
- Outbound investment
- Money that people or companies in one country put into companies in another country.
- Proposed rule
- A draft of a government rule. The public can comment on it before the final version is written.
- Country of concern
- A country that a US law names as a risk to US security, here including China and Russia.
Since January 2025, the US Treasury has limited some American investments in Chinese companies that work on chips, quantum computing and AI. On Thursday, October 22, it proposed new rules that would widen this program, under a law that Congress passed in December 2025.
What the draft would change
The rules would carry out the Comprehensive Outbound Investment National Security Act, known as the COINS Act. It was part of the defence law for 2026, which became law on December 18, 2025.
As now, some deals would be banned, and others would have to be reported to Treasury within 30 days after they close. The program would cover chips, AI, quantum technology, supercomputing, hypersonic weapons and biotechnology.
Supercomputing, hypersonic systems and biotechnology are new. Treasury added biotechnology itself, using a power the law gives it. A Treasury official told reporters that the draft does not cover deals where drugmakers license medicines from Chinese companies, BioCentury reports.
From Treasury’s release and fact sheet of October 22.
AI gets a new name and a wider ban
Treasury’s draft calls AI systems “super intelligence systems”. It says an executive order of September 29, 2026 tells government agencies to use that term.
Under today’s rules, some investments in Chinese AI companies only have to be reported. The draft would instead ban American investment in companies in a country of concern that develop any such system.
For chips, the ban would cover more kinds of advanced chips, including high-bandwidth memory. For supercomputing, investors would also have to report deals in fast links between chips.
Which countries
The law names China, including Hong Kong and Macau, plus Cuba, Iran, North Korea, Russia and Venezuela under Nicolás Maduro. Today, only China, Hong Kong and Macau are covered.
Treasury says Venezuela does not fall under that definition for now, because the Maduro government is no longer in power.
What stays allowed, and what comes next
Buying shares that trade on a stock market, index funds and some other fund stakes would stay allowed. Small deals, up to $50,000 over 12 months, would not need to be reported. This exception covers only the duty to report, not the bans, Treasury’s fact sheet shows.
Breaking the rules could bring civil fines up to the limit of a US sanctions law, the International Emergency Economic Powers Act. Treasury could also force an investor to sell a banned stake.
The public can comment until December 7, 2026. A final rule will set the start date, and until then the current rules still apply.
Treasury Secretary Scott Bessent said the rules would stop adversaries from using American investment to build technologies that threaten US security. “It’s just the first step in a fairly long process,” Ryan Majerus, a former US trade official now at the law firm King & Spalding, told AP.
Sources
Every fact in this story comes from the sources below. Open them to check our work.
- 1Primary source · October 22, 2026Treasury Issues Proposed Rule to Implement Comprehensive Outbound Investment National Security Act US Department of the Treasury
- 2Primary source · October 22, 2026Fact sheet and FAQs: proposed rule to implement the COINS Act US Department of the Treasury
- 3Research · October 22, 2026US Treasury proposes a rule to crack down on high-tech investments in China, other adversaries AP (via WSLS)
- 4
- 5Research · October 22, 2026Draft U.S. outbound investment rule could chill cross-border collaboration BioCentury
The rule’s details come from Treasury’s own release and fact sheet. AP describes the $50,000 limit as applying to the whole rule, but Treasury’s fact sheet says it covers only the duty to report.
Treasury’s draft would ban American investment in any AI developer in China and other rival countries, widening restrictions to new areas. How we rate the mood