Federal Research Funding at Risk: New Bill Bans Collaboration with Chinese Entities on AI, Quantum Computing, and More

The “Preventing PLA Acquisition of United States Technology Act of 2025” is a national security measure aiming to slam the brakes on technology transfer to the Chinese military. Put simply, if you’re a university, a federal agency, or a private company that takes federal research money—even a single grant—you are now barred from collaborating on specific high-tech research with a lengthy list of designated Chinese organizations. The initial list of restricted fields is wide-ranging, covering everything from quantum computing and AI to robotics, advanced nuclear tech, and semiconductors (SEC. 2).

The New Gatekeepers of Science: Who’s In and Who’s Out

This bill creates a massive new compliance hurdle for anyone in the U.S. research ecosystem. The law broadly defines a “covered entity” as any U.S. university, research institution, or private company receiving federal financial assistance. Meanwhile, the list of “Chinese entities of concern” is equally broad, encompassing not just government-controlled companies, but also private firms with military ties and, critically, any Chinese university the Secretary of Defense thinks is helping China’s military-civil fusion strategy (SEC. 2, Defining Who’s Risky). This means a U.S. university researcher with an NIH grant who wants to collaborate with a Chinese university on a new AI algorithm—even if it’s for a civilian application—might find that project suddenly illegal if the Chinese partner is on the Defense Department's blacklist.

The Real Cost of Compliance

For the average U.S. university or tech startup relying on federal grants, the administrative burden here is huge. Every covered entity must report annually to the Secretary of Defense, not just about current relationships with the blacklisted Chinese entities, but also about any relationships they considered but decided not to pursue, and any they terminated because of this new rule (SEC. 2, Exceptions and Reporting). Think about that for a second: you have to report on the deals you didn’t make. This is a massive compliance effort, requiring meticulous record-keeping and legal review just to stay eligible for federal funding.

The Ultimate Penalty for a Paperwork Error

The most serious part of this legislation is the penalty. If a covered entity violates these rules—either by engaging in prohibited research or by failing to report correctly—they face an immediate and total bar from receiving any future federal financial assistance (SEC. 2, Penalties for Breaking the Rules). This isn't a slap on the wrist or a fine; this is the nuclear option for any research institution or federally-funded company. Imagine a university losing all NSF and NIH funding because one lab failed to properly vet a small, joint research project. This severity is designed to ensure absolute compliance, but it also means the stakes for paperwork errors have never been higher.

Who Holds the Keys to the Blacklist?

This bill grants immense power to the Secretary of Defense. The Secretary, working with other agencies, must create a public website that lists the specific restricted technologies and, as much as possible, the Chinese entities of concern (SEC. 2, The Public Warning Website). Furthermore, the only way to get an exception for collaboration is if the Secretary of Defense determines the information “wouldn’t substantially help” China’s military goals (SEC. 2, Exceptions and Reporting). This centralizes the authority over U.S. federally funded research in these critical fields, making the Defense Department the ultimate arbiter of what constitutes acceptable international scientific exchange.