The Biden administration has compelled a Saudi Aramco-backed venture capital firm to divest its holdings in a Silicon Valley AI chip startup supported by Sam Altman, one of the co-founders of OpenAI, according to a Bloomberg News report released on Thursday.
Rain Neuromorphics, a startup backed by Altman, specializes in the development of chips that replicate the functionality of the human brain, with the goal of providing solutions to companies employing artificial intelligence (AI) algorithms.
In 2022, the company successfully secured $25 million in funding.
Prosperity7, an entity affiliated with Aramco and a prominent investor in Rain Neuromorphics’ $25 million funding round, decided to sell its shares in the startup following an investigation conducted by the Committee on Foreign Investment in the United States (CFIUS), as reported by individuals familiar with the matter, as per the Bloomberg article.
The CFIUS, a U.S. oversight body responsible for scrutinizing deals with potential national security implications, instructed the Saudi fund to reverse its investment within the past year, according to the report. Sam Altman, when contacted by Reuters, had not yet issued a statement in response.
The U.S. Treasury, which oversees the CFIUS process, emphasized, “CFIUS is dedicated to taking all necessary actions within its jurisdiction to protect U.S. national security.
In accordance with legal practices, CFIUS refrains from public commentary on transactions that are under consideration or review.”
The Committee on Foreign Investment in the United States is an inter-agency panel that assesses foreign investments in U.S. businesses and real estate that might raise national security concerns.
This development underscores the United States’ commitment to safeguarding its national security interests in the field of AI.
It also follows earlier actions, such as the extension of export restrictions on advanced artificial-intelligence chips from companies like Nvidia and Advanced Micro Devices to certain Middle Eastern nations, a move taken in August.
These measures reflect the U.S. government’s efforts to control the spread of sensitive AI technologies to foreign entities that could potentially pose security risks.