President Biden on Thursday signed an executive order aimed at limiting foreign investment in US technology in a move that clearly targets China.
The executive order directs the Committee on Foreign Investment in the United States (CFIUS) to increase scrutiny on certain foreign investments in the US in several areas.
CFIUS was formed in 1975 to block the acquisition of US companies by foreign firms if the deal is considered to be a national security risk. But under the new order, CFIUS will narrow its focus to smaller deals in an effort to expand the federal government’s power over foreign investments.
The areas the White House said CFIUS will focus on include “priority emerging and critical technologies, like semiconductors, quantum technologies, biotechnology, and artificial intelligence, as well as supply chain considerations.”
CFIUS will also focus on deals that could give a foreign company access to Americans’ personal data. The video-sharing app TikTok has come under scrutiny from the US because its data is stored by its Chinese-based parent company Bytedance.
The allegation is that because ByteDance is a Chinese company, it is obligated to share user data with the Chinese government, a charge TikTok denies, and Bytedance has said it has taken steps to protect users’ data. The Trump administration tried to broker a deal to have TikTok purchased by a US-based company, but it didn’t get very far.
All of the things TikTok is accused of, US tech companies are guilty of with respect to the US government. In 2013, leaks from former NSA contractor Edward Snowden revealed that a program known as PRISM gives the NSA and FBI backdoor access to user data from Facebook, Google, Apple, Microsoft, and other US tech platforms.
The Biden administration is reportedly considering taking action against TikTok and is also mulling measures to limit US investments in China. The economic measures against Beijing come as tensions are soaring between the US and China over US support for Taiwan.