(Bloomberg) — The UK is considering new curbs on outward investment in emerging technologies such as artificial intelligence and semiconductors, citing the potential security risks of aiding hostile states such as Russia and China.
Britain’s deputy prime minister Oliver Dowden, who oversees the UK’s investment regime, said he’s planning to work with other Group of Seven nations to assess the risks and consider whether to introduce extra restrictions.
The government’s concern is that some outbound investments may be used to “facilitate and support and aid strategic uplift of adversaries,” Dowden said in an interview, citing areas such as semi-conductor manufacturing, cryogenic equipment and facial recognition technology. Nevertheless, “there’s a high bar for the imposition of any form of restrictions,” he said.
The UK’s focus on the issue follows President Joe Biden’s order last year to limit US investment in some Chinese advanced technology companies, as Western nations try to strike a balance between protecting national security while encouraging free trade and innovation. Dowden said he will also review Britain’s approach to export controls and clarify the circumstances in which the government would review inward investment in sensitive sectors like critical minerals and semiconductors.
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“The risk landscape is increasing all the time,” Dowden said, referring to Russia’s invasion of Ukraine, Chinese aggression in the South China Sea and the threat of ransomware attacks. “We are in a state of cyber and economic contestation with an increasing range of state and non-state actors.”
The move by Biden last year regulated US investments in some Chinese semiconductor, quantum computing and AI firms, and the British government said at the time that it would consider its own next steps.
Yet whether the Conservative Party will be in power to see through changes in this area is far from certain, given the opposition Labour Party’s commanding poll lead ahead of a general election that must be called by January 2025 at the latest.
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