China is set to prevent top technology companies, including AI startups, from accepting investment from US sources without first obtaining official government clearance, according to a report published in April 2026.
Regulators have reportedly instructed specific companies — including AI startups Moonshot AI and StepFun — to turn away US funding. ByteDance, the owner of TikTok, is also facing similar restrictions, with curbs applied to secondary share sales involving US investors.
The measures are aimed at protecting sensitive technologies that Chinese authorities consider linked to national security. By requiring official clearance before US capital can enter these firms, Beijing is tightening its oversight of the flow of foreign investment into strategically significant sectors.
The restrictions could significantly affect US investors with existing or planned stakes in China’s fast-growing AI and tech startup ecosystem. For companies like Moonshot AI and StepFun, this may limit their access to a major source of international capital. The curbs on ByteDance’s secondary share sales suggest the policy may extend beyond early-stage startups to larger, established technology players as well.
Source: Tech-Economic Times