China is slamming the brakes on U.S. investment into its tech companies to protect its best-kept national security secrets.
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According to a Bloomberg report, China plans to restrict top tech firms, including ByteDance-owned TikTok, from accepting U.S. cash without its approval first.
It is reported that 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 it gives the green light.
This includes AI startups Moonshot AI and StepFun, with TikTok owner ByteDance being told it should not allow secondary share sales to U.S. investors without clearance.
The Chinese government is making the moves to stop U.S. investors from gaining stakes in sensitive technologies linked to the country’s national security. It also plays into the theme of China seeking to come out on top of the AI superiority race with the U.S.
The U.S. put in place its own clampdown earlier this year, limiting U.S. investment in certain Chinese AI, semiconductor and quantum firms, citing security concerns.
No More Meta Type Deals
The new Chinese move is believed to follow the $2 billion acquisition of Chinese AI startup Manus by Facebook-owner Meta Platforms (META) in 2025, which then led to a series of investigations into foreign investment in Chinese companies. The fear, again, is that other startups could look to move advanced technology out of China.
It’s not just Meta; U.S. investors have played a big role in the growth of China’s tech sector with investments from Sequoia Capital and Benchmark and partnerships between Apple (AAPL) and Tesla (TSLA) with Chinese suppliers.
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.
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