The U.S. Treasury’s Final Rule, effective January 2, 2025, restricts U.S. investments in Chinese entities involved in semiconductors, quantum technology, and artificial intelligence to safeguard national security. This rule, stemming from Executive Order 14105, targets U.S. citizens and entities, imposing prohibitions on investments that could enhance China’s military capabilities. It categorizes covered transactions, requiring advance notification for certain investments. Violations may lead to significant penalties. Investment advisers and funds must reconsider strategies to comply, while U.S. limited partners in private funds face scrutiny regarding their investment knowledge. Safe harbors exist for limited investments and pre-existing commitments.