The US mulling over restricting China’s access to cloud services offered by Amazon and Microsoft

According to a report published on Tuesday, the Biden administration is exploring the possibility of introducing a new regulation that would prevent Chinese companies from accessing cloud-computing services provided by US tech giants like Amazon and Microsoft.
As per the proposed rule, US companies might be obligated to seek government authorization before offering their cloud services which employ cutting-edge artificial intelligence computer chips, to customers based in China. The Wall Street Journal disclosed this information, citing sources familiar with the subject matter.
The report emphasizes that the proposed measure aims to eliminate a loophole that could have enabled Chinese AI companies to bypass export restrictions and utilize high-powered computer chips via cloud services.
According to insiders quoted by The WSJ, the US government is expected to announce the new regulations in the upcoming weeks. In response, China is anticipated to have prepared a set of countermeasures for potential retaliation.
The WSJ report arrives one week after the Journal’s previous report highlighting the US government’s intent to broaden export restrictions on AI chips to China, impacting companies like Nvidia (NVDA), among others. The development is closely connected to the chip export restrictions imposed in October last year. In response, Nvidia modified specific AI chips to evade those limitations.
Consequently, National Security Officials perceive the cloud computing platforms provided by AWS, Microsoft Azure, and Google Cloud as a potential workaround that Chinese companies utilize to gain access to advanced AI chips from Nvidia and other similar entities.
US officials and legislators have been contemplating measures to limit the activities of Chinese cloud-service providers like Alibaba and Tencent within the United States, as stated by the WSJ. Both companies possess cloud regions established on the eastern and western coasts of the country.
The Commerce Department refrained from providing any comments to the WSJ.
Via The Wall Street Journal