December 1, 2023: The Biden administration has recently enforced a significant move in the AI sector, compelling a Saudi Aramco-backed venture capital firm to divest its stake in a Silicon Valley AI chip startup.
This action was taken following a review by the Committee on Foreign Investment in the United States (CFIUS), which assesses foreign investments for national security implications.
The startup in question, Rain Neuromorphics, backed by OpenAI co-founder Sam Altman, specializes in designing innovative chips that mimic brain functionality.
These chips are intended to power companies that utilize artificial intelligence algorithms. Rain Neuromorphics had previously raised $25 million in 2022, with Aramco’s Prosperity7 participating as a lead investor in this funding round.
CFIUS’s intervention led to Prosperity7 selling its shares in Rain AI. This move aligns with the U.S.’s increased scrutiny over foreign investments in critical technology sectors, especially when it involves influential players from the Middle East.
The U.S. government’s stance reflects growing concerns about the potential national security risks associated with foreign entities gaining access to advanced AI technology.
Sam Altman, who is at the forefront of AI innovation, did not immediately comment on this development. Meanwhile, the U.S. Treasury, which oversees CFIUS, maintained its standard practice of not publicly discussing specific transactions under review.
This decision by the U.S. administration is part of a broader strategy to regulate the flow of advanced technologies, especially AI, to certain regions.
Earlier, in August, the U.S. expanded restrictions on exports of sophisticated AI chips from NVIDIA and Advanced Micro Devices to some Middle Eastern countries, indicating a concerted effort to maintain a tight grip on AI technology proliferation.
This move by CFIUS and the U.S. government underscores the complex interplay between technological advancement, international investment, and national security.
It also highlights the strategic importance of AI technology in the global economic and security landscape.
