A passport for both: how money keeps crossing the AI divide that politics is trying to build

There is a version of the US-China technology story that is easy to tell. Two superpowers, two chip industries, export controls in one direction and a self-sufficiency drive in the other, and a line down the middle that some analysts have taken to calling the Silicon Curtain. Then there is the version told by the money, and the money does not seem to have read the script.

A Reuters analysis published on Tuesday, as Xi Jinping prepares to meet Donald Trump in Washington this week, traces the financial connections that have not only survived the decoupling rhetoric but deepened during it. American banks are raising capital for Chinese AI companies. Chinese savings are pouring into American chipmakers. And both sides have the same reason, which is that the returns are on offer and the rules, so far, allow it.

The flows, in numbers

The Reuters figures, drawn from LSEG, US government data, Sinolink Securities and S&P Global Market Intelligence, are worth setting out plainly.

How the rules let it happen

None of this is illegal, and that is the point. Washington restricts the export of the most advanced chips and chip-making tools to China, and for several years has limited American investment into sensitive Chinese AI, semiconductor and quantum businesses. But as Reuters notes, the outbound investment rules contain a carve-out for publicly traded securities. Underwriting a Hong Kong listing, or holding a Shanghai-listed chipmaker on behalf of a client, falls on the permitted side of the line. So Goldman Sachs and Morgan Stanley worked on the Hong Kong listings of the AI developer MiniMax and the chipmakers Montage Technology and Shanghai Iluvatar CoreX, and J.P. Morgan underwrote a share sale of roughly $2.6 billion by Victory Giant Technology, which makes circuit boards for AI servers.

In the other direction, China's outbound mutual funds invest under quotas controlled by the foreign exchange regulator, and their favourite destination is American semiconductors. Reuters cites Sinolink Securities data showing Chinese holdings rising this year in Micron, AMD, Sandisk, Lam Research and Applied Materials, several of which make exactly the equipment that export controls are meant to keep out of China. A Chinese saver cannot buy the machine, but can buy the company that makes it.

Safety net or trapdoor

The optimistic reading is that all this mutual exposure is a stabiliser. If American pension funds own Chinese AI listings and Chinese funds own American chip stocks, both governments have a constituency that would be hurt by a rupture. Fred Hu, the founder and chairman of Primavera Capital Group, told Reuters that US and Chinese businesses "continue to maintain connectivity despite volatile geopolitical conditions". Treasury Secretary Scott Bessent said he and Vice Premier He Lifeng had discussed setting up a US-China AI dialogue, with a system for flagging shared goals and threats. Expectations for this week's meeting are low, but low expectations are themselves a form of stability.

The pessimistic reading is the same facts viewed from the other end. Mr Buckley-Thorp's description of the pension fund buying the Chinese AI firm Zhipu in Hong Kong was that it is "making the same bet: that the politicians won't actually pull the trigger". That is a bet on restraint, and restraint has been in short supply. Reuters notes that at least one US lawmaker has criticised JPMorgan Chase and Bank of America for underwriting the Hong Kong listing of the battery maker CATL, which the US says has ties to China's military. Washington keeps adding Chinese technology companies to its list of firms it believes aid Beijing's armed forces. And in a small but telling detail, SpaceX's website and listing documents were inaccessible in Hong Kong and mainland China ahead of its June flotation. The curtain is porous, but it is real, and it moves.

There is also less visibility than the headline numbers suggest. Thilo Hanemann of Rhodium Group told Reuters that wealthy Chinese investors continue to back US technology companies through offshore funds, "but there is very limited visibility into these fund structures and thus the magnitude of exposure". The flows that can be counted are large; the flows that cannot may be larger.

What this means if you own AI

Most people do not own Hong Kong listings or STAR Market chipmakers directly. But almost anyone with a pension or an index tracker owns the American side of this trade, usually in size, because a handful of AI-linked companies now make up an unusually large share of the major US indices. The Reuters piece is a reminder that those companies' valuations rest partly on rules and relationships that are political, not commercial. Three questions follow.

First, how much of what you own depends on China as a customer? Chip and equipment makers that sell into China, within the limits the controls allow, have revenue that can vanish with a rule change. Second, how much depends on China as a rival that stays behind? If China's self-sufficiency drive works, the moat around some American names narrows, which is part of why global investors are buying the Chinese listings in the first place. Third, if you do hold Chinese AI exposure, whether through a fund or an emerging-markets tracker, do you know what happens to it if Washington extends the outbound rules from private deals to public securities? That carve-out is the hinge on which the whole picture turns, and it is a regulation, not a law of nature.

Xile He, a China-born founder of the San Francisco AI start-up BrentX, put the investors' logic to Reuters in a sentence: "Betting entirely on one side is a big risk in the U.S.-China AI race." That is true. It is also true that betting on both sides only works while both sides let you. This week's meeting in Washington will not settle that, and the money knows it, which is why expectations are low and the flows are high at the same time.

This article describes market activity and is not investment advice. Figures are as reported by Reuters on 22 September 2026 and its cited data providers.