US Govt Pressures Aramco-backed Firm To Divest From AI Startup Backed By Altman
The US government has compelled a venture capital firm backed by Saudi Aramco to sell its shares in Rain Neuromorphics, a Silicon Valley AI chip startup supported by OpenAI cofounder Sam Altman. Rain Neuromorphics, specializing in brain-mimicking chip design for AI algorithms, successfully secured USD 25 million in funding in 2022, with Aramco's Prosperity7 acting as a lead investor.
The decision to force the divestment reportedly stems from a review conducted by the Committee on Foreign Investment in the United States (CFIUS), a watchdog overseeing deals with potential national security implications. Reuters sources familiar with the matter revealed that Prosperity7, following the CFIUS review, opted to sell its shares in Rain Neuromorphics. The move aligns with the committee's directive to unwind the deal, issued sometime in the past year.
The US Treasury, responsible for overseeing the CFIUS process, emphasised its commitment to taking necessary actions to safeguard national security.
CFIUS, an inter-agency committee, regularly reviews foreign investments in US businesses and real estate with potential national security concerns. This recent action reflects a broader trend of heightened scrutiny over foreign involvement in critical technology sectors, particularly those related to artificial intelligence.
Moreover, the incident adds to a series of measures taken by the United States to control the export of advanced technologies. In August, the US expanded restrictions on the export of sophisticated artificial intelligence chips from companies like Nvidia and Advanced Micro Devices, encompassing certain Middle Eastern countries. The cumulative effect of these actions could potentially slow down AI development in the Middle East and reshape the landscape of global technology investments.
(Inputs from Reuters)
