German Leader Pitches to Restrict Chinese AI Investments

Germany Proposes to Scrutinize AI Investments From China, Citing Risk to Economic Security

Germany's deputy chancellor, Robert Habeck, is proposing to limit Chinese investment in AI and semiconductors due to economic security concerns.
Many German lawmakers support the proposal whereas some oppose it due to the concerns of negative impact on trade relation with China.
The US has already taken steps to restrict investment in China's AI industry, considering its progress a threat to national security.

Germany’s deputy chancellor has proposed to cut down Chinese investment in critical sectors such as semiconductors and artificial intelligence (AI)

The AI and semiconductor industries are gaining the status of the new oil. The hype has resulted in a new conflict between the West and China. Western countries are proposing to ban or limit investments from China and also outbound investment into Chinese companies.

Germany Circulates Proposal to Toughen Chinese Investment in AI

According to the Financial Times, Robert Habeck, the deputy chancellor of Germany, is concerned about economic security due to Chinese investment in critical industries such as AI and semiconductors. Hence, he proposed to toughen foreign direct investment (FDI) in Germany.

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Along with Habeck, other German legislators believe China is becoming “more repressive internally and more aggressive externally.” Whereas some German leaders oppose the proposal, believing the development would adversely affect the country’s trade relationship with China.

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According to Statista, Germany’s AI industry is poised for rapid growth to €28.56 billion (~ $30.99 billion) valuation by 2030. Presently, it has a valuation of €9.68 billion (~ $10.5 billion)

Germany's AI industry valuation. Source: Statista — Germany’s AI industry valuation. Source: Statista

US’s War Against Chinese AI Industry

While Germany has proposed restricting Chinese FDI, it has not discussed limiting the outbound investment into Chinese AI companies.

However, the US has been in an AI cold war with China. Earlier this month, the US passed orders to ban private equity and venture capital firms from investing in China’s quantum computing, advanced chips, and AI companies.

The country considers China’s AI progress a threat to national security. As a matter of fact, it also wants to restrict the export of AI chips to China.

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