On July 8, 2025, President Trump signed an order mandating that Suirui International Co., Limited (“Suirui”), a Chinese-owned entity, divest the interest that it acquired in 2020 in Jupiter Systems, LLC (“Jupiter”), a U.S.-based technology company, and certain China-connected subsidiaries of Jupiter. This action marks the first presidential block by the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) under the second Trump administration.
Although the facts of the case are not public, circumstances suggest that Suirui and Jupiter sought to shield the transaction from CFIUS scrutiny by opting not to file voluntarily and limiting publicity. This strategy ultimately did not pay off, as CFIUS nevertheless discovered, reviewed, and prohibited the transaction.
Key Takeaways
- Non-passive Chinese investments in U.S. businesses that pose any colorable national security risk are almost certain to be prohibited.
- Even without public reporting, CFIUS has means to identify non-filed transactions.
- CFIUS’s reach extends well beyond the pre-closing transaction review process. Companies that fail to engage with CFIUS appropriately may find themselves subject to retroactive scrutiny that could ultimately result in forced divestment.
- A forced divestment can result in destruction of value of the company. In structuring its divestment requirement, CFIUS is less likely to be sympathetic to value destruction concerns if the national security considerations should have been obvious and it appears that the parties sought to avoid detection of the transaction by customers or CFIUS.
The Transaction: Jupiter and Suirui
Jupiter deals in video wall display technology and visualization systems—in other words, large-scale, multi-monitor displays one might see in NASA's Mission Control or in a military command center. Jupiter has operated for over 40 years and offers its solutions to corporate customers as well as U.S. government entities. Jupiter reports its U.S. government customers include the CIA, the NSA, and NASA. These agencies likely rely on Jupiter's systems to display and process sensitive or classified data.
Suirui and its Chinese parent company are cloud communication service carriers similarly specializing in video conferencing solutions. Suirui represents an increasingly rare type of buyer in the CFIUS context: a direct Chinese acquirer. Over the past five years, Chinese investors typically have had little hope of CFIUS clearing their non-passive investments in technology companies.
After buying Jupiter for an undisclosed sum, Suirui installed its co-Chairman as Chairman of Jupiter and its co-CPO as CEO. Beyond announcing these overlapping executive appointments, Jupiter’s website currently contains no disclosure of the acquisition itself, which could indicate a conscious effort to maintain a low profile around the transaction.
The Order: Immediate Firewall, Total Divestment
The presidential order is comprehensive in scope, not just prohibiting the transaction but mandating complete divestment within 120 days. The order mandates the following:
- Immediate Access Prohibitions: Suirui and its affiliates are immediately barred from accessing Jupiter’s non-public source code, technical information, IT systems, and U.S. facilities.
- Complete Divestment: Within 120 days, Suirui must divest all interests in Jupiter, including transferring or destroying assets such as intellectual property, source code, and customer contracts.
- Jupiter’s Divestment of the Jupiter Asia Companies: A unique requirement for this presidential order is that Jupiter is required to divest all interests or rights in any assets or operations of the Jupiter Asia Companies—three entities organized in Hong Kong and China—created after the completion of the Transaction.
- Buyer Pre-Approval: The divestment is subject to CFIUS non-objection; CFIUS has 30 days to object to potential buyers once proposed. The order specifically mentions factors on which an objection might be based, such as whether the buyer is a U.S. citizen and whether they have ties to the Chinese sellers.
- Compliance Monitoring: Until divestment is complete, the parties must provide weekly compliance certifications to CFIUS and are subject to audit requirements.
Analysis
The circumstances of the transaction leading up to the divestment order illustrate key factors in CFIUS’s review:
- Sensitive Customers Raise Red Flags: CFIUS was likely concerned that (1) Jupiter’s products supplied to U.S. government customers could be compromised, posing cybersecurity risks to government networks, and (2) Suirui personnel could access U.S. government facilities and systems during production, systems integration, and repair and maintenance.
- Jupiter’s Divestment of Jupiter Asia Companies: This requirement demonstrates that CFIUS had concerns that products, software, and services originating from Jupiter’s business in China could introduce compromises into government systems.
- Called In Despite Low-Profile Strategy: CFIUS still identified and called in the transaction despite the lack of public reporting. The five-year interval indicates that CFIUS possibly became aware of the transaction some time after its completion, potentially through a tip or intelligence reports.
- (Non-)Filing Strategy: The parties’ decision not to voluntarily file is unusual given that, in light of Jupiter’s sales to U.S. intelligence agencies, CFIUS obviously would have identified national security considerations related to the transaction. This makes Jupiter a potential case study for non-cooperation—CFIUS likely viewed the failure to file and the companies’ apparent attempts to keep a low profile surrounding the transaction as a deliberate attempt to avoid CFIUS review, which would have exacerbated its concerns.
- Terms Suggest Serious Concerns: The requirements of the divestment order will likely result in Jupiter selling in a fire sale, and they bring into sharp relief the risk of a decision not to engage with CFIUS. The immediate firewall, asset destruction, and ongoing government oversight requirements telegraph the Committee’s concerns about ongoing and unacceptable national security risks.
- Notably, though, the order allows the Chinese entities to retain certain assets of Jupiter’s China/Hong Kong subsidiaries that were acquired or created after the 2020 transaction, providing some limited carve-out.
- Alignment with CFIUS Decisions since 2016: The Jupiter order followed CFIUS’s post-2016 trajectory of blocking or unwinding transactions involving Chinese investors that could expose sensitive tech or data to China or present counterintelligence risks.
- Jupiter’s apparent supply relationship with government customers makes it a straightforward case for prohibition and would have been unlikely to be approved if voluntarily filed in 2020.
- It diverges from prior cases in that Suirui’s acquisition of Jupiter was not just a non-notified transaction—it was apparently kept secret, suggesting an intent to avoid detection by its customers and possibly CFIUS as well.
- Non-Notified Call-Ins Still a Priority: CFIUS’s program to identify and call-in transactions that were not notified continues to make headlines under President Trump’s second term. Although CFIUS has largely completed its review of non-notified Chinese investments that predated the formal establishment of Treasury’s CFIUS enforcement office in 2020, the Jupiter order indicates that CFIUS continues to actively consider non-notified cases as it identifies them.
