China Plans to Restrict US Tech Investments

Chinese watchdogs are considering restricting US investment into the domestic technology sector, according to media reports. Any new US investments would require government approval for stakes in sensitive companies, including AI startups.

Regulators, including the National Development and Reform Commission (NDRC), have instructed private tech companies to reject U.S.-linked capital in funding rounds unless formally approved. AI companies Moonshot AI and StepFun are among those said to have received the guidance, while TikTok-owner ByteDance has also been told not to allow secondary share sales to US investors without regulatory clearance. The restrictions are aimed at limiting foreign ownership in technologies deemed sensitive to national security, particularly AI.

The security measures are a response to Meta Platforms’ controversial $2 billion acquisition of Singapore-based AI startup Manus at the start of 2026, which triggered regulatory reviews in China over foreign investment and technology transfer risks. The deal received scrutiny over how the startup structured itself to enable a sale to a foreign buyer ahead of regulatory review in Beijing. Manus’ parent company, Butterfly Effect, was founded in China before shifting to Singapore over the last year.

China’s probe sparked wider concerns over whether such deals could accelerate the relocation of domestic startups offshore to escape legal scrutiny. The US has previously imposed its own limits on American investment into sensitive Chinese companies on national security grounds. The limits of investments include AI, semiconductor, and quantum technology.