US forces Saudi fund to pull out of Altman-backed AI chip startup – Bloomberg News – 01/12/2023 at 01:58

(Added comment from US Treasury)

The Biden administration forced a Saudi Aramco-backed venture capital firm to sell its stake in a Silicon Valley artificial intelligence chip startup backed by OpenAI co-founder Sam Altman.

Rain Neuromorphics, an Altman-backed startup that designs chips that mimic how the brain works and aims to serve companies using artificial intelligence (AI) algorithms, has raised $25 million in 2022.

Aramco’s Prosperity7, one of the lead investors in Rain AI’s $25 million funding round, sold its stake in the startup after a review by the U.S. Foreign Investment Committee, according to a Bloomberg report.

The agency, which monitors transactions with national security implications, asked the Saudi fund to cancel the transaction last year, the report said.

Asked by Reuters for comment, Mr. Altman did not immediately respond.

The U.S. Treasury, which oversees the Committee on Foreign Investment in the United States (CFIUS) process, said: “CFIUS is committed to taking all necessary actions within its authority to protect the national security of the United States. In accordance with law and practice, CFIUS does not comment publicly on transactions, which are not reviewed.”

CFIUS is an intergovernmental panel that reviews foreign investment in U.S. businesses and real estate that presents national security concerns.

The US has taken steps to slow the growth of AI in the Middle East. In August, the United States extended restrictions on the export of advanced artificial intelligence chips from Nvidia NVDAO and Advanced Micro Devices AMDO to some Middle Eastern countries.