April 19, 2024
US Compels Saudi Fund Exit from Altman's AI Chip Startup
AI

US Compels Saudi Fund Exit from Altman’s AI Chip Startup

The Biden administration has compelled a Saudi Aramco-backed venture capital firm to divest its shares in a Silicon Valley AI chip startup supported by OpenAI co-founder Sam Altman, as reported on Thursday.

Rain Neuromorphics, an Altman-backed startup specializing in chips emulating brain functionality for companies utilizing AI algorithms, secured $25 million in funding in 2022. Aramco’s Prosperity7, a primary investor in Rain AI’s $25 million round, offloaded its shares in the startup following a review by the Committee on Foreign Investment in the United States (CFIUS), according to sources familiar with the matter cited in the Bloomberg report.

Over the past year, CFIUS, a U.S. watchdog overseeing deals with national security implications, instructed the Saudi fund to unwind its investment in Rain AI.

The U.S. Treasury, responsible for overseeing the CFIUS process, stated, “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 that scrutinizes foreign investments in U.S. businesses and real estate posing national security concerns.

In a move potentially hindering AI advancement in the Middle East, the U.S. took action in August to broaden restrictions on exporting sophisticated Nvidia (NVDA.O) and Advanced Micro Devices (AMD.O) artificial intelligence chips to include certain countries in the Middle East.

Image By vecstock

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