On November 30, Reuters reported that the Biden administration compelled a Saudi Aramco-backed venture capital firm to divest its shares in Rain Neuromorphics, a Silicon Valley AI chip startup supported by Sam Altman, co-founder of OpenAI. Rain Neuromorphics specializes in designing chips that emulate brain functions, catering to companies utilizing artificial intelligence algorithms, and secured $25 million in funding in 2022.

Aramco's Prosperity7, a key investor in Rain Neuromorphics, reportedly sold its shares in response to a review conducted by the Committee on Foreign Investment in the United States (CFIUS). Sources familiar with the matter revealed that CFIUS, a U.S. watchdog overseeing deals with national security implications, directed the Saudi fund to unwind its investment in Rain AI over the past year.

While Sam Altman did not immediately respond to Reuters' request for comment, the U.S. Treasury, responsible for overseeing the CFIUS process, issued a statement emphasizing its commitment to safeguarding U.S. national security. CFIUS, an inter-agency committee, reviews foreign investments in U.S. businesses and real estate with potential national security concerns. The U.S. Treasury maintained that, in line with legal protocols, CFIUS refrains from publicly commenting on specific transactions under review.

This regulatory action against the Saudi-backed venture adds to recent U.S. measures aimed at slowing artificial intelligence development in the Middle East. In August, the U.S. expanded restrictions on the export of sophisticated AI chips from companies like Nvidia and Advanced Micro Devices to include select countries in the Middle East.

As these developments unfold, they underscore the growing scrutiny and regulatory considerations surrounding international investments in AI and technology with potential national security implications. The impact of such actions on global technological collaborations and investments remains an evolving aspect of the broader geopolitical landscape.

In conclusion, the reported intervention by the Biden administration to compel a Saudi Aramco-backed venture capital firm to divest its shares in Rain Neuromorphics, a Silicon Valley AI chip startup, underscores the increasing regulatory scrutiny surrounding international investments in technology with potential national security implications. The involvement of the Committee on Foreign Investment in the United States (CFIUS) in directing the divestment emphasizes the U.S. government's commitment to safeguarding national security interests in the evolving landscape of artificial intelligence.

The regulatory actions are part of a broader trend, as seen with the U.S. expanding restrictions on the export of sophisticated AI chips to certain countries in the Middle East. These measures highlight the delicate balance between fostering global technological collaboration and addressing potential security risks.

As the Biden administration takes steps to navigate the complexities of international technology investments, the implications for AI development and collaborations in the Middle East remain a critical aspect to monitor. The conclusion of this specific case underscores the intricate interplay between national security concerns, regulatory oversight, and the global landscape of emerging technologies.