US compels Saudi fund to exit Altman-backed AI chip startup - Bloomberg News
Reuters
Published Nov 30, 2023 06:53PM ET
Updated Nov 30, 2023 08:01PM ET
(Reuters) -The Biden administration has forced a Saudi Aramco-backed venture capital firm to sell its shares in a Silicon Valley AI chip startup backed by OpenAI co-founder Sam Altman, Bloomberg News reported on Thursday.
Altman-backed Rain Neuromorphics, a startup designing chips that mimic the way the brain works and aims to serve companies using artificial intelligence (AI) algorithms, raised $25 million in 2022.
Aramco (TADAWUL:2222)'s Prosperity7, a lead investor in the $25 million round for Rain AI, sold its shares in the startup after a review by the Committee on Foreign Investment in the United States, people familiar with the matter said, according to the Bloomberg report.
The agency, a U.S. watchdog for deals with national security implications, told the Saudi fund to unwind that deal sometime over the past year, the report said.
Altman did not immediately respond to a Reuters request for comment.
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 safeguard U.S. national security. Consistent with law and practice, CFIUS does not publicly comment on transactions that it may or may not be reviewing."
CFIUS is an inter-agency committee which reviews foreign investments in U.S. businesses and real estate that implicate national security concerns.
The US has taken action that could slow AI development in the Middle East. In August, the U.S. expanded the restriction of exports of sophisticated Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) artificial-intelligence chips to include some countries in the Middle East.
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Written By: Reuters
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