U.S. Considers Restricting China's Access to Cloud Services

U.S. Considers Restricting China’s Access to Cloud Services

U.S officials reportedly plan to restrict Chinese companies’ access to cloud computing services for security reasons.

Last updated: July 5, 2023 1:27 PM

Published July 5, 2023 1:27 PM

Last updated: July 5, 2023 1:27 PM

Published July 5, 2023 1:27 PM

According to a recent report from the Wall Street Journal, authorities in the United States are contemplating measures to limit China’s utilization of cloud computing services in order to safeguard their advanced technology.

The Biden Administration has reportedly proposed the implementation of controls on the extent of access granted to Chinese companies for U.S.-based cloud computing services, such as Amazon Web Services (AWS) and Microsoft.

The report states that providers, including the aforementioned companies, would be required to obtain government approval prior to offering services that employ powerful artificial intelligence (AI) chips to Chinese clients.

According to sources familiar with this matter, this move aims to address a significant loophole in the current sanctions on chip exports, which some national analysts suspect Chinese companies have exploited through cloud services to bypass restrictions.

Analysts have speculated that Chinese customer’s cloud leverages the capabilities of advanced computing through cloud services, without the necessity of acquiring sanctioned chips like Nvidia’s widely used A100 chips in AI development.

In an attempt to hinder the progress of the industry overseas, the United States introduced initial sanctions in October 2022, limiting Chinese access to semiconductor chips. These regulations resulted in Chinese development being disconnected from the more advanced chips available in the market.

Later, on June 28, the administration expressed its consideration of intensifying the aforementioned measures. This would involve imposing stricter restrictions on the computing power of chips that can still be exported.

Responding to these developments, the Chinese government revealed on July 3 its intention to implement controls on the export of gallium and germanium products. These materials are extensively utilized in the production of high-quality semiconductors required for the advancement of artificial intelligence (AI) technologies.