Adds background on U.S. action, final paragraph

Nov 30 (Reuters) – The Biden administration has forced a Saudi Aramco venture capital firm to sell its shares in a Silicon Valley AI chip startup backed by OpenAI co-founder Sam Altman, Bloomberg News reported on Thursday.

Altman-backed Rain Neuromorphics, a startup designing chips that mimic the way the brain works and aims to serve companies using artificial intelligence (AI) algorithms, raised $25 million in 2022.

Aramco’s Prosperity7, a lead investor in the $25 million round for Rain AI, sold its shares in the startup after a review by the Committee on Foreign Investment in the United States, people familiar with the matter said, according to the Bloomberg report.

The agency, the primary U.S. watchdog for deals with national security implications, instructed the Saudi fund to unwind that deal sometime over the past year, the report said.

The US has taken action that could block AI development in the Middle East. In August, the U.S. expanded the restriction of exports of sophisticated Nvidia NVDA.O and Advanced Micro Devices AMD.O artificial-intelligence chips to include some countries in the Middle East.

(Reporting by Harshita Mary Varghese; additional reporting by Chris Sanders; Editing by Arun Koyyur, Sherry Jacob-Phillips and Deepa Babington)

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Original: NVDA Feed: US compels Saudi fund to exit Altman-backed AI chip startup – Bloomberg News