China plans approval rules for US investment in AI firms

China is reportedly planning to tighten rules on US investment in its technology sector by requiring government approval for stakes in sensitive companies, including AI startups. Bloomberg reported that regulators including the National Development and Reform Commission have instructed private tech companies to reject US-linked capital in funding rounds unless it receives formal approval.

Bloomberg said AI companies Moonshot AI and StepFun received the guidance, while ByteDance was told not to allow secondary share sales to US investors without regulatory clearance. The reported restrictions are intended to limit foreign ownership in technologies that China considers sensitive to national security, particularly artificial intelligence.

The reported measures follow Meta Platforms' $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. Manus' parent company Butterfly Effect was founded in China before shifting to Singapore over the last year, and the US has already imposed its own limits on American investment into sensitive Chinese companies in AI, semiconductors and quantum technology.