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Wall Street Fuels China's AI Race, Defying US Curbs
25 Sep
Summary
- Major US banks financed $17.2 billion in Chinese tech deals in 2026.
- US institutions face scrutiny for funding Chinese AI and chip companies.
- Treasury rules allow some Wall Street activity despite security concerns.
Throughout 2026, leading American financial institutions, such as Goldman Sachs, Morgan Stanley, Citigroup, and JPMorgan, have significantly supported China's burgeoning artificial intelligence and semiconductor industries. These banks participated in numerous Chinese high-tech equity offerings totaling $17.2 billion, representing nearly 30% of the sector's total issuance. This activity persists despite U.S. efforts to limit China's access to advanced technologies.
Notable deals include Goldman Sachs, Morgan Stanley, and Citigroup's involvement in Zhongji Innolight's $6.8 billion Hong Kong offering, occurring after the company was designated a Chinese military entity. Morgan Stanley and Goldman also facilitated offerings for AI developer MiniMax and semiconductor firms Montage Technology and Shanghai Iluvatar CoreX Semiconductor. JPMorgan supported Victory Giant Technology's $2.6 billion listing for its AI server printed circuit boards.
These financial connections continue despite Washington's increasing focus on AI and semiconductors as national security issues. The Treasury Department's Outbound Investment Security Program targets certain U.S. investments in these sectors, though its regulations permit underwriting services and investments in publicly traded securities. This has allowed Wall Street's involvement with strategically important Chinese companies to continue, despite prior congressional scrutiny. Meanwhile, Chinese investors have also increased their holdings in U.S. semiconductor companies and AI funding rounds.
