By Karen Freifeld

(Reuters) – U.S. rules that will ban certain U.S. investments in artificial intelligence in China are under final review, according to a government posting, suggesting the restrictions are coming soon.

The rules, which will also require U.S. investors to notify the Treasury Department about some investments in AI and other sensitive technologies, are derived from an executive order signed by President Joe Biden in August 2023 that focused on keeping American investors’ know-how from aiding China’s military.

The final rules — which will restrict outbound investment to China in AI, semiconductors and microelectronics and quantum computing — are now under review at the Office of Management and Budget, which in the past has meant they will likely be released within the next week or so.

“It looks to me like they’re trying to publish this before the election,” said former Treasury official Laura Black, a lawyer at Akin Gump in Washington. Black added that the Treasury office overseeing the regulations generally provides at least a 30-day window before such regulations go into effect.

The Treasury Department published the proposed rules and a raft of exceptions after an initial comment period following the executive order.

A spokesperson for the Treasury Department did not immediately respond to a request for comment.

Black expects the final rules to further clarify the scope of coverage over artificial intelligence and the threshold for limited partners.

The restrictions are part of an effort to prevent U.S. know-how from helping the Chinese develop sophisticated technology.

(Reporting by Karen Freifeld; Editing by Chizu Nomiyama)