Treasury proposes barring US investment in adversary nations' superintelligence systems

The US Treasury Department issued a notice of proposed rulemaking on 22 October that would bar US persons from investing in the development of “super intelligence” (SI) systems by entities linked to countries of concern. The Federal Register notice, dated 26 October, opens a comment period closing on 7 December 2026. The rule would implement the Comprehensive Outbound Investment National Security (COINS) Act, which Congress passed in the FY2026 defence authorisation act in December 2025.

The notice defines “countries of concern” as the People’s Republic of China, including Hong Kong and Macau, plus Cuba, Iran, North Korea and Russia, and the Maduro-era Venezuelan regime named in the Act, which Treasury notes no longer exists. It says it keeps the structure of the existing Outbound Investment Security Program: notification for some transactions and prohibition for others. The change is in how AI is treated. Under the current regulations, which took effect about 21 months earlier, advanced AI development fell partly under notification. The proposal would put the development of any SI system, a term replacing “AI system”, in the prohibited category. Treasury said it had “not proposed any technical parameters” under which a transaction in that sector could be permitted, and that it was asking for comment on the approach.

Treasury’s stated reasoning was that “rapid advances in super intelligence capabilities of countries of concern” warranted a broad prohibition. It argued that a prohibition would spare US investors from judging the technical capabilities or thresholds of the systems a foreign company is building, which the current rules require, and noted that general-purpose models can exhibit national-security-relevant functions that their developers did not evaluate. A US person who believes a transaction serves the national interest could apply for an exemption. The proposal also covers quantum technologies, treated as prohibited, and high-performance-computing interconnects and hypersonic systems, which would be notifiable. Using the authority the Act gives it to add sectors, the Treasury added biotechnology.

Treasury Secretary Scott Bessent said the rules would “prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security”, while also providing clarity to investors. Assistant Secretary for Investment Security Christopher Pilkerton said they were designed to address risks when adversaries “try to benefit from U.S. investment in key technology sectors”. The notice reports that Treasury has received about 100 notifications in semiconductors and AI since the programme began.

This is a proposal, not a final rule. The press release says final rules will set the effective date, and the notice invites comment on both the prohibition and the definition of an SI system. The vocabulary follows the 29 September order directing agencies to say “super intelligence” in place of “AI”.