US President Joe Biden signed an executive order recently, banning certain new US investments from being used in China. Effective immediately, the order restricts the use of said investments in three fields: semiconductor and microelectronics, quantum information technologies, and specific artificial intelligence (AI) systems.
Then as now, the US’ goal of the new executive order is to prevent China from developing technologies that could help in modernising the latter’s military, and in turn undermining US national security. To that end, the executive order will be targetting private equity, venture capital, joint ventures, and foreign direct investments, which are also known as greenfield investments.
Unsurprisingly, China responded to the Biden’s new executive order by saying that it was “gravely concerned” with the order and that it would take necessary measures. It also says that it hopes the US will respect laws of market economy and refrain from “artificially hindering global economic and trade exchanges and cooperation, or set up obstacles for the recovery of the world economy.”
The signing of the new US executive order also comes at a time when Chinese tech giants are rushing to procure high-performance AI chips from NVIDIA. These aren’t small orders either, with companies such as Baidu, ByteDance, and Alibaba making orders worth US$5 billion (~RM22.9 billion) for around 100,000 A800 processors from the GPU brand.
Prior to this, the Chinese tech giants had also purchased a further US$4 billion (~RM18.3 billion) of GPUs from the US GPU manufacturer, with all companies expected to received their first shipments next year.
