TMTPOST--U.S. venture capital firms are urging tech startups to distance themselves from Chinese investors in anticipation of stricter foreign ownership regulations from Washington, the Financial Times reported on Friday. HeyGen, an AI startup initially founded in Shenzhen and headquartered in Los Angeles, has requested its Chinese investors, including IDG Capital, Baidu Ventures, Sequoia Capital's former Chinese venture capital arm HongShan, and ZhenFund, to divest their shares to American entities. In March, HeyGen completed a funding round led by Silicon Valley's Benchmark, during which early Chinese investors significantly reduced their holdings by selling it to U.S. venture capital firms. This effort to “clean up the cap table” is in response to increasing scrutiny from Washington over Chinese technology groups and cross-border investments. Despite the U.S. imposing a ban on certain investments by American funds in China’s AI sector last year, there has been no prohibition on Chinese minority investments in U.S. tech companies so far.