The US Treasury proposed widening outbound investment limits on China and other countries

The US Treasury Department issued a proposed rule on October 22 that would widen its Outbound Investment Security Program, adding new technology sectors and countries of concern to the rules that govern certain US investments abroad.

The proposal implements the Comprehensive Outbound Investment National Security Act, known as the COINS Act, which Congress passed as part of the defense authorization bill for fiscal 2026. The law tells Treasury to require US persons to notify it of some deals with covered foreign companies, and to ban other deals outright. "The proposed regulations would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security," Treasury Secretary Scott Bessent said.

The program started with a 2023 executive order covering three areas, semiconductors, quantum and AI, with China, Hong Kong and Macau named as countries of concern. The COINS Act covers five sectors: semiconductors and microelectronics, AI systems, quantum, high performance computing and supercomputing, and hypersonics. Treasury also used its authority to add biotechnology. Because of a September 2026 executive order, the proposal refers to "super intelligence systems" instead of AI systems. On chips, it keeps existing bans on certain design software, manufacturing and packaging equipment and advanced chip design, and extends them to radiation hardened chips, photonic chips and high bandwidth memory.

This is a proposal, not a rule in force. Treasury says a later final rule will set the effective date, and the current regulations keep applying until then.

Why it matters for builders: the rules target US investors and companies putting money into foreign AI and chip firms in countries of concern, not everyday developers. But they affect who can fund which startups, how joint ventures are structured, and how much capital flows into competing AI ecosystems.

What's next: watch the public comment period, the final list of countries of concern, and the effective date Treasury sets in the final rule.

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