Treasury's COINS Act Proposal Would Ban US Investment in Any 'Super Intelligence' Developer in China and Other Countries of Concern

For AI investors, the key change in Treasury's new outbound-investment proposal is that the middle ground disappears: US money into AI developers in China and the other covered countries would no longer be a case for notification, but simply banned. On Thursday, October 22, the US Treasury issued a Notice of Proposed Rulemaking to carry out the Comprehensive Outbound Investment National Security (COINS) Act, which Congress passed as part of the Fiscal Year 2026 National Defense Authorization Act.

The AI change

Under Treasury's current Outbound Investment Security Program, some AI-related investments must be reported and others are banned. Treasury's fact sheet says the new proposal "expands the existing prohibition to more broadly restrict U.S. person investment into country of concern entities that develop any SI system, which would eliminate the existing notification requirement for these transactions."

"SI" stands for super intelligence. The fact sheet explains that Executive Order 14434, "Inaugurating the Era of Super Intelligence," signed on September 29, requires federal agencies to use "Super Intelligence" and "SI" in place of "Artificial Intelligence" and "AI" in certain documents. The proposal therefore uses "super intelligence systems" where today's rules say "AI systems."

Reuters reported that Treasury decided on the ban because rapid advances over the past two years raised questions about the efficacy of "regulating or even distinguishing the most advanced models."

What else is in the proposal

• More sectors. The proposal covers semiconductors and microelectronics, SI systems, quantum information technologies, high-performance computing and supercomputing, hypersonic systems and biotechnology. Treasury says it added biotechnology using authority the law gives it to add technologies.
• More countries. The law's list of countries of concern adds Cuba, Iran, North Korea, Russia and "the Bolivarian Republic of Venezuela under the regime of Nicolás Maduro Moros" to China, including Hong Kong and Macau.
• New exceptions. The proposal would except, among other things, publicly traded securities, transactions totaling no more than $50,000 over 12 months, and bank lending. US persons could also request a national-interest exemption from the ban.
• Deadlines. Notifications would be due within 30 days of a deal closing. Comments on the proposal are due by December 7, 2026.

Treasury Secretary Scott Bessent said the rules "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 Christopher Pilkerton told Reuters: "It's not just about the investment itself; it's not just about the money. It's about the network, the supply chain, and things like that that come from that investment."

Venezuela and drug licensing

Treasury's FAQ says the Maduro regime "no longer exists" and that, because the United States recognized Delcy Rodríguez as head of state on March 5, 2026, "Venezuela does not meet the NPRM's definition of a country of concern." It adds that investors should still check whether the rule applies to Venezuelan entities. Reuters reported that a Treasury official said the rules do not cover licensing agreements by US pharmaceutical companies with China, a key demand of major drugmakers.

Limits

• Treasury published the proposal on October 22, before our usual daily window; we are publishing it now because we had not covered it.
• This is a proposal. Treasury says final rules will come later and will set the effective date, and the details could change after comments.
• Reuters describes Venezuela as "dropped" from the list. Treasury's own wording is narrower: Venezuela stays in the law's definition, but Treasury says it does not currently meet it. We follow Treasury's wording.
• The pharmaceutical-licensing point comes from an unnamed Treasury official quoted by Reuters. Treasury's FAQ says contractual arrangements, other than those for technology or technical knowledge transfer, would be excepted, but it does not mention pharmaceutical licensing specifically.
• We read Treasury's press release and fact sheet in full but did not review the full proposed rule text for every technical threshold.

Sources

• US Treasury: Treasury Issues Proposed Rule to Implement Comprehensive Outbound Investment National Security Act (October 22, 2026)
• US Treasury: Fact Sheet and FAQs, COINS Act NPRM (October 22, 2026)
• Reuters via Investing.com: US Treasury drops Venezuela from countries facing outbound US investment restrictions (October 22, 2026)