In the digital cold war between the US and China, US officials are increasingly turning their attention to a new target: China’s cloud computing giant.
Over the past year and a half, the Biden administration and lawmakers have been doing what they can to address security concerns about the cloud computing units of Chinese tech giants Alibaba and Huawei, according to five people familiar with the matter. We have strengthened the examination of whether it is possible.
U.S. officials are discussing whether stricter rules can be set for Chinese companies doing business in the U.S. and how to counter their overseas growth, according to three people familiar with the matter. are doing. Three other people familiar with the matter said the Biden administration also consulted with U.S. cloud-computing companies Google, Microsoft and Amazon to understand how Chinese competitors operate.
By focusing on Chinese cloud companies, U.S. officials may widen the scope of technical tensions between the U.S. government and China. In recent years, the U.S. has tried to limit the overseas expansion of Chinese tech and telecom companies while blocking access to China’s key technology.
Former President Donald J. Trump has directed his administration to prevent Chinese telecom equipment makers such as Huawei and ZTE from playing a role in next-generation 5G wireless networks. The Trump administration has also launched efforts to target Chinese-owned apps such as TikTok and Grindr to force the sale of the latter and limit China’s involvement in undersea internet cables. President Biden continues some of these efforts.
Cloud-computing companies, which operate sprawling data centers that provide computing power and software to businesses, will be at the forefront of emerging technologies in much the same way China has pushed aside America’s obstacles. China’s top diplomat, Wang Yi, told Secretary of State Antony J. Brinken on Monday that the United States needs to stop interfering in China’s technological development.
But U.S. officials fear China could use Chinese data centers inside and outside the U.S. to access sensitive data, similar to their concerns about Chinese telecom equipment and TikTok. . Cloud computing is the key behind-the-scenes engine of the digital economy, enabling services such as video streaming and enabling businesses to run artificial intelligence programs.
A White House spokeswoman declined to comment. Huawei declined to comment, but Tencent, another Chinese tech giant that owns Alibaba and its cloud arm, did not respond to a request for comment. Google, Amazon and Microsoft declined to comment.
Sam Sachs, a cyber policy researcher at the New America think tank, said interest in cloud computing reflects the Biden administration’s approach to focusing on China’s influence in internet infrastructure and web-based digital services. said there is.
“We intend to focus on the entire ecosystem across these tiers,” she said.
U.S. efforts to sabotage Chinese tech companies have met with mixed success. U.S. restrictions on Huawei suppliers have hit the company’s smartphone business, but efforts to keep Huawei equipment out of wireless networks in the U.S. continue. The Trump administration forced Grindr’s Chinese owners to sell the app, but efforts to force Chinese internet giant ByteDance to sell TikTok fell through.
The global cloud computing market is large, with total public cloud revenues reaching $544 billion last year, according to Synergy Research Group. Despite having data centers in Silicon Valley and Virginia in the United States, Chinese companies make up only a small portion of the cloud market, said John Dinsdale, chief analyst at Synergy.
But Chinese cloud companies are expanding into Asia and Latin America. Huawei’s chairman said last year that his cloud business was experiencing “rapid growth.” In May, Huawei hosted a cloud conference in Indonesia. Alibaba held a rally in Mexico last year to promote its cloud products.
Virginia Democratic Senator Mark Warner said in a statement that while the Federal Communications Commission may ban some Chinese companies from providing telecommunications services in the We were able to provide services such as banking,” he said. Warner has drafted a bill that would give the White House more power to crack down on Chinese technology.
In April, nine Republican senators wrote to a group of administration officials to investigate and penalize Chinese cloud companies that they claim pose a threat to national security, including Huawei, Alibaba, Tencent and Baidu. urged to
“We urge these companies to take decisive action using all the tools at their disposal,” they said.
The Commerce and State Departments are considering how to deal with Chinese cloud-computing companies, four people familiar with the matter said.
Two people familiar with the matter said the Commerce Department is considering establishing stricter rules governing China’s cloud providers. It may enact rules under new legal powers that could limit technologies that could pose a threat to national security.
A Commerce Department spokeswoman declined to comment.
The State Department has also begun developing a strategy to raise U.S. concerns about Chinese cloud-computing providers to other countries, according to two people familiar with the matter. The agency has already covered the topic in conversations with foreign governments, helping diplomats understand what messages would work best, one of the people said.
Experts fear Chinese cloud computing providers can offer contracts at lower rates than their U.S. competitors, as many Chinese companies benefit from large government subsidies. ing. The U.S. government may find ways to offer its own overseas assistance or persuade U.S. cloud providers to offer perks, such as free training, to their customers to counter the inducement of Chinese companies.
A State Department spokesman said it was important to use trusted equipment for all aspects of the global Internet, including data centers. He added that authorities are also focusing on mitigating risks associated with wireless equipment, undersea communications cables and satellites.
