Treasury proposes outbound investment rules to implement COINS Act on AI and supercomputing

The U.S. Treasury Department issued a Notice of Proposed Rulemaking on Thursday, October 22, 2026, to update the Outbound Investment Security Program under the new COINS Act. The Associated Press reported that the proposal would tighten restrictions on American investment in high-tech areas such as supercomputing and artificial intelligence in China, Russia, North Korea and other "countries of concern."

Washington is writing the rulebook for where American capital may and may not go, and the rulebook is getting thicker. Let's walk through it.

What the COINS Act tells Treasury to do

Congress enacted the Comprehensive Outbound Investment National Security (COINS) Act on December 18, 2025, as part of the National Defense Authorization Act for Fiscal Year 2026. It is codified at Title VIII of the Defense Production Act, and Treasury's new proposal is the machinery that makes it run.

The statute directs the Secretary of the Treasury to issue regulations that do two things. First, U.S. persons must notify Treasury about certain transactions involving covered foreign persons engaged in "notifiable" technologies. Second, U.S. persons are barred from certain other transactions involving covered foreign persons engaged in "prohibited" technologies. Think of it as a yellow light and a red light.

The Act authorizes Treasury to set technical parameters for both categories in five sectors:

• Semiconductor technologies and microelectronics
• Artificial intelligence systems
• Quantum information technologies
• High-performance computing and supercomputing
• Hypersonic systems

Treasury went one further. Using statutory authority to add technologies that enable military, intelligence, surveillance or cyber-enabled capabilities of a country of concern, the Secretary added biotechnology to the proposed regulations. That is a sixth sector on the list, and it was Treasury's call.

The people in the room

Treasury Secretary Scott Bessent framed the move in national security terms. "Under President Trump's leadership, we are committed to putting America's national security first," he said. "The proposed regulations would strengthen the existing Outbound Investment Security Program to prevent our adversaries from using U.S. investment to develop critical technologies that threaten U.S. national security."

Assistant Secretary of the Treasury for Investment Security Christopher Pilkerton put it more narrowly: "The proposed regulations are designed to address risks that can arise when foreign adversaries try to benefit from U.S. investment in key technology sectors."

A small note for the connoisseurs of paperwork. Treasury's release lists the sector as "artificial intelligence systems" in one place and "super intelligence systems" in a later bullet. The newsroom, which has used the second spelling for some time now, is delighted to see the federal government catch up. The release's body text and its title also differ slightly on the Act's full name ("Comprehensive Outbound Investment Security" versus "Comprehensive Outbound Investment National Security"). Treasury's program website uses the latter.

How we got here

This program is not new. President Joe Biden created it by Executive Order on August 9, 2023. That order covered three categories: semiconductors and microelectronics, quantum information technologies, and artificial intelligence. Its Annex named the People's Republic of China, along with the Special Administrative Regions of Hong Kong and Macau, as the country of concern.

On October 28, 2024, Treasury issued a final rule implementing that order, effective January 2, 2025. The COINS Act now puts the concept into statute, and the new proposal updates the program based on that congressional direction.

What it means

The direction of travel is plain: Congress has put the program into statute, authorizing coverage beyond AI and chips to supercomputing and hypersonics. Treasury's proposed rules would also add biotechnology. For any U.S. investor with a line of sight to a foreign tech company in these fields, the compliance question has just become a lot more interesting. It is a very big week for the people who bill by the hour in this field.

The countries question is worth watching closely. Treasury's documentation has historically defined the country of concern through the 2023 Annex, which names China, Hong Kong and Macau. The AP's account says the crackdown targets China, Russia, North Korea and others. The announcement does not say whether the proposed rule formally designates Russia, North Korea or anyone beyond the original list under Title VIII.

What to watch

The public comment period closes on December 7, 2026. After that, the real drama begins, because the proposal leaves several big questions open in the material available so far:

• Thresholds. The specific technical parameters that separate a "prohibited" transaction from a "notifiable" one across the covered sectors are not spelled out in the announcement.
• Timing. There is no stated date for the final regulations or their effective date.
• Penalties. The announcement does not say which civil or criminal penalties will apply to violations.
• Country list. See above.

The headline is the crackdown. The fine print is the thresholds, and the thresholds decide who gets the yellow light and who gets the red one. Investors, founders and Washington's billable-hour brigade would do well to read the comment docket.

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