Systems brain executives expected Trump’s government to approve a national security review that has left the IPO of the artificial intelligence chips manufacturer in Limbo for months, five sources familiar with the matter said.
On the other hand, the long -awaited price of the company has been further delayed while executives expect the White House to complete the key appointments and conclude the review of the Foreign Investment Committee in the United States, people said, who asked not to be identified because the process is confidential.
The most recent delay, which had not been reported above, is the last example of how the bets that US President Donald Trump would be a blessing for agreements have not resulted for Wall Street so far.
The CFIUS, led by the Department of Treasury, analyzes foreign investment in American companies to detect risks to national security. The friction point for brains, based in California, is the review by the CFIUS of an investment of 335 million dollars made by G42, a cloud computing company and artificial intelligence based in Abu Dabi.
The previous links of the Emiratí company with China have already raised scrutiny in Washington, but their participation in brains seemed to be ready for approval at the end of last year.
Brains, a nascent promise
Brains, a smaller competitor of the leader of the Nvidia industry in the flourishing IA chips market, G42 faces risks when quoting in the stock market without clarity about its investment, according to two sources. Investors value certainty and without it, capture capital in the open market becomes more complicated.
After the change in the White House just two months ago, vacancies are still key political positions, including the Undersecretary of the Treasury for Investment Security, who supervises the CFIUS. Although career and politicians currently have the authority to approve the agreement, the inclusion of G42 made it politically risky due to its previous links with the Chinese company Huawei, according to several lawyers of the CFIUS.
The CFIUS staff could even be less inclined to risk a controversial approval in large and politically sensitive agreements after seeing the Trump multimillionaire advisor team, Elon Musk, in the Government’s efficiency department cut thousands of workers in an attempt to cut federal payrolls and eradicate unfair, said National Security Lawyers.
The career staff also needs to establish confidence with the new administration in delicate issues of national security, said Jim Secret, former Treasury and Commerce official of the Biden Administration.
“With a new administration, it is natural that the CFIUS staff wants to inform new political leaders and obtain their approval before advancing with a high profile case,” he said. “It is a delicate and difficult matter, especially with an administration that has been so openly hostile towards non -partisan technical experts who call the ‘deep state’,” he added.
Brains and the Treasury department declined to comment. The White House did not respond to a request for comments. It is not unusual for presidents to take months to cover positions outside the cabinet in key agencies.
G42 declined to comment on the CFIUS process. “The progress of G42 in the US and in key European markets reflects the growing confidence in our role in the collective construction of the intelligence network for a responsible AI,” he told Reuters.
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Hard against China
The most flexible regulatory environment imagined by bankers and executive directors when Republican Trump assumed the position of Democratic President Joe Biden is not giving such good results as many expected, they say corporate executives and negotiators.
The Biden administration expanded the application of the CFIUS and created new rules that govern US investment in high -tech Chinese companies and it is unlikely that the Trump administration will reduce some of that, wrote Jason Chipman, partner of the Wilmerha law firm, in an analysis of February.
“In fact, Trump’s new team is more likely to be based on Biden’s efforts to aggressively evaluate incoming and outgoing investment, particularly with respect to China,” he said.
While Trump established new parameters last month that “accelerate” foreign investments in American companies, even more those that come from China, particularly in strategic sectors such as technological sectors.
These are bad news for companies such as G42, an important investor and the largest brain client. He maintained close links with the Chinese company Huawei before Microsoft. He gave him 1.5 billion dollars.
To obtain the approval of the investment, he had to cut with Huawei and sign a national security agreement with the US, last year.
Despite the delay, brain executives continue to trust that the agreement will finally be realized and intend to move forward with the IPO once they receive approval, according to three people familiar with their thinking.
Brains and G42 jointly submitted a request to notify the investment to the CFIUS. Subsequently, they modified the application, indicating that the actions that G42 would acquire are values without the right to vote, which, they argued, should not be subject to the review of the CFIUS.
Last September, companies requested to withdraw the presentation completely and CFIUS is now considering that request, according to the presentation of the brain IPO.
Brains, valued at approximately 8 billion dollars after the G42 investment commitment in May last year, has almost doubled its valuation since then, according to one of the sources.
If the investment is approved, G42 would obtain a participation greater than 5% in the company. Currently, brains is building a series of AI data centers for G42, and its technology has been used to train the great Arab language model that Microsoft is using on its Azure AI platform.
With Reuters information.
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