In its ongoing tech war with China, the U.S. is taking decisive action. The Biden administration has compelled a venture capital fund owned by Saudi Aramco to sell its shares in Rain AI, an AI chip startup supported by OpenAI CEO Sam Altman, according to a report by Bloomberg.
Rain AI specializes in designing chips that draw inspiration from the intricate workings of the human brain. Sam Altman's backing is prominently featured on the company's website. The fund in question, Prosperity7, was established in 2022 by the Saudi oil group and has confirmed that it has divested its investment in Rain AI.
The Committee of Foreign Investment in the United States (CFIUS), responsible for reviewing deals with potential national security implications, issued an order to the Saudi fund over the past year to sell its shares, as per the Bloomberg report.
This move comes at a time when concerns are mounting about China's increasing ties with Middle Eastern nations, particularly Saudi Arabia. Prosperity7 has made investments in several Chinese startups, further exacerbating U.S. anxieties.
The intervention by the U.S. government serves to underscore the Biden administration's unease surrounding Chinese access to American artificial intelligence technology. In fact, restrictions on exporting cutting-edge AI chips, including those developed by Nvidia (NVDA), to China were tightened by the government in October.
Separately, reports indicate that Altman was in the midst of raising funds to establish an AI-focused chip company as a competitor to Nvidia before his temporary removal and subsequent reinstatement as OpenAI CEO. Altman reportedly traveled to the Middle East in pursuit of funding, though it remains unclear whether Rain AI is connected to those efforts.
The U.S. Treasury, which oversees CFIUS, released a statement through Reuters emphasizing its dedication to safeguarding national security. However, the committee refrained from commenting publicly on any specific transactions it may be reviewing.
At the time of writing, Altman, Saudi Aramco, and the U.S Treasury Department had not responded to requests for comment.
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