The Biden administration is contemplating a new regulation that aims to prohibit Chinese companies from utilizing cloud-computing services provided by prominent US tech giants like Amazon and Microsoft. This proposal, if enacted, would mandate US companies to seek government approval before offering cloud services equipped with cutting-edge artificial intelligence computer chips to customers based in China. By implementing this rule, a loophole that would have permitted Chinese AI firms to access high-powered computer chips through cloud services, in violation of export restrictions, would be effectively closed. The Commerce Department is expected to incorporate these restrictions in the coming weeks as part of its efforts to further limit semiconductor exports to China. Amazon, being the largest cloud provider globally, may be significantly affected by this development.
This information comes to light as US and Chinese officials engage in an ongoing battle to restrict one another’s access to scarce computer chips and other essential components of the technology supply chain. The Commerce Department has refrained from commenting on this report, and representatives from Amazon and Microsoft were unavailable for immediate response. Meanwhile, Treasury Secretary Janet Yellen is embarking on a critical trip to Beijing to initiate economic discussions between the two nations. The Treasury Department highlights the significance of responsible management of the relationship, direct communication regarding areas of concern, and collaborative efforts to address global challenges between the two largest economies in the world.
In a related development, China recently announced plans to limit exports of crucial metals used in semiconductor production. The Biden administration, as reported earlier this week, intends to prevent the shipment of chips produced by leading companies like Nvidia to Chinese customers, potentially starting from July. Both Amazon Web Services and Microsoft’s Azure hold substantial market share as top cloud providers. Presently, both companies have a customer base in China where they face competition from domestic tech giant Alibaba.
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