Synopsis
China is set to block top tech firms, including AI startups, from taking US money without official clearance. Regulators have told companies like Moonshot AI and StepFun to reject US investment. TikTok owner ByteDance also faces similar curbs on secondary share sales. These moves aim to safeguard sensitive technologies linked to national security.Chinese regulators, including the National Development and Reform Commission, have recently instructed several private technology firms to reject U.S. investment in funding rounds unless explicitly approved, the report said.
AI startups Moonshot AI and StepFun were among the companies that received the guidance, the report said. Regulators have also decided on similar restrictions for TikTok owner ByteDance and do not want the company to approve secondary share sales to U.S. investors without government approval, it added.
The measures are aimed at preventing U.S. investors from gaining stakes in sensitive technologies linked to China's national security, Bloomberg reported.
NDRC, the Chinese Embassy in Washington, StepFun, ByteDance, Meta and Moonshot AI did not immediately respond to Reuters requests for comment.
The US Department of the Treasury and the Department of Commerce's Bureau also did not respond immediately.
The heightened scrutiny follows Meta's more than $2 billion acquisition of AI startup Manus in 2025, which triggered investigations into foreign investments in Chinese companies and technology exports amid concerns the transaction could spur other startups to move advanced technology offshore.
For years, U.S. capital has played a significant role in China's technology sector, ranging from venture investments by firms such as Sequoia Capital and Benchmark to deep operating ties involving companies such as Apple, Microsoft and Tesla.
American pension funds and endowments have also been major backers of China-focused venture funds, helping fuel growth across internet platforms, electric vehicles and AI.
Washington also imposed its own restrictions earlier this year, limiting U.S. investment in certain Chinese AI, semiconductor and quantum firms, citing security concerns.
(Reporting by Abu Sultan and Kritika Lamba in Bengaluru; Editing by Shinjini Ganguli)
