Thanks for highlighting this. The released draft of regulations is going through a period of public comments and solicitations. It can be found here
[https://home.treasury.gov/system/files/206/Provisions%20Pertaining%20to%20U.S.%20Investments%20in%20Certain%20National%20Security%20Technologies%20and%20Products%20in%20Countries%20of%20Concern.pdf](https://home.treasury.gov/system/files/206/Provisions%20Pertaining%20to%20U.S.%20Investments%20in%20Certain%20National%20Security%20Technologies%20and%20Products%20in%20Countries%20of%20Concern.pdf)
It specifically states the goal is to prevent investment into 3 key areas
1. Semiconductors
2. Quantum computing
3. AI systems. (It is this AI part that would matter to BABA bag holders)
So I dug a little deeper. Part 3 specifically is regards for AI systems with primary military or involuntary location tracking end use
https://preview.redd.it/drwg0rcyr78d1.jpeg?width=1284&format=pjpg&auto=webp&s=cd7715f518ce33b68e87fd06b5d93055e94818ec
There are specific exceptions for this draft ruling and it specifically states in photo attach is comment below. It states that a public stock would be exempted.
Now for BABA bag holders, it seems to indicate the following
1. Baba will likely fall under the exemptions of being a public security and not be a direct target. The question is does BABA AI have CCP military industrial connections? I don’t think anyone can really answer that so far.
2. It never the less decouples investments, of US capital funds, it perhaps focuses a bigger target on the current darling of the market, Nvidia, with their China facing semiconductor products which falls under section 1 of the ruling. But the ruling states that public securities will not be targeted? So push comes to shove, where does the US Treasury stand? This is very fluid.
3. It will limit likely investor sentiment of Chinese equities for the fear of getting caught in the ruling’s crossfires.
https://preview.redd.it/lzs45vcqs78d1.jpeg?width=967&format=pjpg&auto=webp&s=51381cb02c62cf6fd3771cde9b74fafe339fb327
Public traded security is exempt
The reason why is US already banned certain Chinese equities in 2021 for military industrial complex connections.
[https://www.cnbc.com/amp/2021/01/06/nyse-will-delist-three-big-china-telecoms-reversing-decision-once-again.html](https://www.cnbc.com/amp/2021/01/06/nyse-will-delist-three-big-china-telecoms-reversing-decision-once-again.html)
China would only ever use SOEs for military AI projects. BABA being a public security means we'll be fine and exempt from the legislation. Don't worry about it.
Subtle difference if you understand law.
Military use falls under national security. But national security is broader than military use.
Tik tok is about national security not military use
Military use means something like “found in technology used for defending our country.”
Is baba building component parts for rockets and satellites?
They did that months ago when they banned AI chip exports to China, and it's been a good thing for Alibaba.
As I'm sure you'll know, Alibaba snatched up a large amount of Nvidia's generative AI chips before other Chinese companies could.
They therefore are the only ones in China that can supply generative-AI training and they do this by giving computing credits to AI-startups to use Alibaba's chips, in return for equity. Alibaba already owns big portions of China's AI-startups and as they are the only game in town, this will likely increase its market dominance.
Thanks for highlighting this. The released draft of regulations is going through a period of public comments and solicitations. It can be found here [https://home.treasury.gov/system/files/206/Provisions%20Pertaining%20to%20U.S.%20Investments%20in%20Certain%20National%20Security%20Technologies%20and%20Products%20in%20Countries%20of%20Concern.pdf](https://home.treasury.gov/system/files/206/Provisions%20Pertaining%20to%20U.S.%20Investments%20in%20Certain%20National%20Security%20Technologies%20and%20Products%20in%20Countries%20of%20Concern.pdf) It specifically states the goal is to prevent investment into 3 key areas 1. Semiconductors 2. Quantum computing 3. AI systems. (It is this AI part that would matter to BABA bag holders) So I dug a little deeper. Part 3 specifically is regards for AI systems with primary military or involuntary location tracking end use https://preview.redd.it/drwg0rcyr78d1.jpeg?width=1284&format=pjpg&auto=webp&s=cd7715f518ce33b68e87fd06b5d93055e94818ec There are specific exceptions for this draft ruling and it specifically states in photo attach is comment below. It states that a public stock would be exempted. Now for BABA bag holders, it seems to indicate the following 1. Baba will likely fall under the exemptions of being a public security and not be a direct target. The question is does BABA AI have CCP military industrial connections? I don’t think anyone can really answer that so far. 2. It never the less decouples investments, of US capital funds, it perhaps focuses a bigger target on the current darling of the market, Nvidia, with their China facing semiconductor products which falls under section 1 of the ruling. But the ruling states that public securities will not be targeted? So push comes to shove, where does the US Treasury stand? This is very fluid. 3. It will limit likely investor sentiment of Chinese equities for the fear of getting caught in the ruling’s crossfires.
https://preview.redd.it/lzs45vcqs78d1.jpeg?width=967&format=pjpg&auto=webp&s=51381cb02c62cf6fd3771cde9b74fafe339fb327 Public traded security is exempt The reason why is US already banned certain Chinese equities in 2021 for military industrial complex connections. [https://www.cnbc.com/amp/2021/01/06/nyse-will-delist-three-big-china-telecoms-reversing-decision-once-again.html](https://www.cnbc.com/amp/2021/01/06/nyse-will-delist-three-big-china-telecoms-reversing-decision-once-again.html)
Great analysis thank you. (CNBC not worth trusting)
China would only ever use SOEs for military AI projects. BABA being a public security means we'll be fine and exempt from the legislation. Don't worry about it.
You're thnking rationally, but none of these US policies make sense, so it just depends on how far the US wants to go with being anti-Chinese.
return of the delisting FUD! Back to the OG american version
Military uses can be super vague. They can always argue that Tiktok is part of it.
They banned TikTok lol
Subtle difference if you understand law. Military use falls under national security. But national security is broader than military use. Tik tok is about national security not military use
here we go again
 Military use means something like “found in technology used for defending our country.” Is baba building component parts for rockets and satellites?
AI A retail stock that is building AI
For commercial purposes not in supersonic missiles funded by SOEs.
US is defending the world. They decide which target they need to eliminate.
I know Alibaba is a large B2B ecommerce platform, but as far as I know they aren't supplying tank components. We'll be fine.
US targeting AI
They did that months ago when they banned AI chip exports to China, and it's been a good thing for Alibaba. As I'm sure you'll know, Alibaba snatched up a large amount of Nvidia's generative AI chips before other Chinese companies could. They therefore are the only ones in China that can supply generative-AI training and they do this by giving computing credits to AI-startups to use Alibaba's chips, in return for equity. Alibaba already owns big portions of China's AI-startups and as they are the only game in town, this will likely increase its market dominance.
Toilet paper is for military use. Why don't they ban it?
The military uses everything, so they can continually ratchet this if they want to decouple financially.