Fewer industries may be affected by the proposed controls on outbound investment

The central theses

Occasionally we allow ourselves to wallow in forecasts on our blog. Likewise, and occasionally, we err. Nevertheless, we hope to distinguish ourselves through our openness and acknowledging our mistakes.[1]

Last year we speculated that we could start the new year with restrictions on foreign investments. Now it appears the Biden administration had other plans. As you all saw, the Biden administration still hasn’t issued the expected executive order that would limit foreign investment. Additionally, recent rumors suggest further delays and restrictions that will likely be much more targeted than the sweeping controls expected (with no small concern).

As detailed in our recent blog on the potential controls on foreign investment, the proposed legislation before Congress would target foreign investment in a variety of industries, including energy, medical, communications, defense, transportation, aerospace, robotics, artificial intelligence, semiconductors, shipbuilding, etc. water. At that point, it was clear to us that the Biden administration was scrambling to issue an executive order before legislation could be passed. In addition, this implementing regulation would target, inter alia, high-priority technologies.

We now understand that while the final executive order has not yet been approved, the executive order will focus on quantum computing, artificial intelligence (AI), and semiconductors. In addition, the executive order is reported Not B. biotechnology or battery technology.

What does that mean and when should you pay more attention to it than an occasional blog scan? Well, that means private equity firms, U.S. corporations, and other investors looking to make overseas investments in quantum computing, AI, and semiconductors should stay tuned as these parties face restrictions and administrative burdens on these activities in the coming months could. The Biden administration will consult allies and continue to seek feedback from think tanks and other partners before refining the executive order.

But those concerned with foreign investment in biotechnology or battery technology could put the news clippings aside and get off the roller coaster of foreign investment forecasts, at least for the foreseeable future.

FOOTNOTES

[1] But of course we have explanations!