US may restrict China's access to cloud to guard technology

The proposal, aimed at closing loophole in chip export controls, could escalate tit-for-tat fight with Beijing

- Yuka Hayashi

The Biden administration is preparing to restrict Chinese companies' access to U.S. cloud-computing services, according to people familiar with the situation, in a move that could further strain relations between the world's economic superpowers.

The new rule, if adopted, would likely require U.S. cloud-service providers such as Amazon.com and Microsoft to seek U.S. government permission before they provide cloud-computing services that use advanced artificial-intelligence chips to Chinese customers, the people said.

The Biden administration's move would follow other recent measures as Washington and Beijing wage a high-stakes conflict over access to the supply chain for the world's most advanced technology.

Beijing Monday announced export restrictions on metals used in advanced chip manufacturing, days ahead of a visit to China by Treasury Secretary Janet Yellen.

The proposed restriction is seen as a means to close a significant loophole. National-security analysts have warned that Chinese AI companies might have bypassed the current export controls rules by using cloud services.

These services allow customers to gain powerful computing capabilities without purchasing advanced equipment including chips-on the control list, such as the A100 chips by American technology company Nvidia.