sourcegraph
April 12, 2024

U.S. officials are increasingly turning their attention to a new target in the U.S.-China digital cold war: the Chinese cloud computing giant.

Over the past 18 months, the Biden administration and members of Congress have stepped up their exploration of how to address security concerns in the cloud-computing arms of Chinese tech giants such as Alibaba and Huawei, according to five people familiar with the matter.

U.S. officials have discussed whether stricter rules could be imposed on Chinese companies operating in the U.S. and ways to curb their overseas growth, three people familiar with the matter said. The Biden administration has also spoken to U.S. cloud computing companies Google, Microsoft and Amazon to learn how their Chinese rivals operate, three other people familiar with the matter said.

By focusing on Chinese cloud companies, U.S. officials could widen the scope for technology tensions between Washington and Beijing. In recent years, the United States has blocked China’s access to key technologies while trying to limit the influence of Chinese technology and telecommunications companies overseas.

Former President Donald J. Trump directed his administration to block Chinese telecom equipment makers such as Huawei and ZTE from playing a role in next-generation 5G wireless networks. The Trump administration has also targeted Chinese-owned apps such as TikTok and Grindr to sell them, and has begun efforts to limit Chinese involvement in undersea internet cables. President Biden has continued some of those efforts.

Cloud computing companies, which operate sprawling data centers and provide computing power and software to businesses, will become the new technological frontier, just as China is pushing back against U.S. hurdles. On Monday, China’s top diplomat, Wang Yi, told Secretary of State Anthony Blinken that the United States needed to stop interfering in China’s technological development.

But U.S. officials worry that Beijing could use Chinese data centers in the U.S. and abroad to obtain sensitive data, echoing concerns about Chinese telecom equipment and TikTok. Cloud computing is an important behind-the-scenes engine of the digital economy, enabling services such as video streaming and allowing companies to run artificial intelligence programs.

A White House spokesman declined to comment. Huawei did not comment, while Alibaba and Tencent, another Chinese tech giant with a cloud division, did not respond to requests for comment. Google, Amazon and Microsoft all declined to comment.

Sam Sachs, a cyber policy fellow at the New America think tank, said the interest in cloud computing reflects the Biden administration’s approach to scrutinizing China’s influence over internet infrastructure and the digital services that use the network.

“We’re intentionally focusing on the whole ecosystem across these layers,” she said.

U.S. efforts to thwart Chinese technology companies have met with varying degrees of success. U.S. restrictions on Huawei suppliers have hurt the company’s smartphone business, but efforts to remove Huawei equipment from wireless networks in the United States continue. The Trump administration forced Grindr’s Chinese owners to sell the app, while efforts to spin off TikTok from Chinese internet giant ByteDance have been unsuccessful.

The global cloud computing market is huge, with total public cloud revenue reaching $544 billion last year, according to Synergy Research Group. In the U.S., despite having data centers in Silicon Valley and Virginia, Chinese companies have a small share of the cloud market, said John Dinsdale, principal analyst at Synergy.

But Chinese cloud companies are making inroads in Asia and Latin America. Huawei’s chairman said last year that the company’s cloud business had achieved “rapid growth”. In May, Huawei held a cloud conference in Indonesia. Alibaba hosted a meetup in Mexico last year to promote its cloud offerings.

Sen. Mark Warner, D-Va., said in a statement that he was concerned that while the FCC could ban some Chinese companies from providing telecommunications services in the U.S., those companies “will still be able to provide services such as cloud computing.” Mr. Warner has drafted legislation that would give the White House more powers to regulate Chinese technology.

In April, nine Republican senators wrote to a group of administration officials encouraging them to investigate and punish Chinese cloud companies they deemed a threat to national security, including Huawei, Alibaba, Tencent and Baidu.

“We urge you to take decisive action against these companies using every tool at your disposal,” they said.

The Commerce and State Departments have been considering what to do with the Chinese cloud-computing companies, four people familiar with the matter said.

The Ministry of Commerce has considered stricter rules to manage Chinese cloud providers, two people familiar with the matter said. It could create rules under new legal authority that would allow it to restrict technologies that could pose a threat to national security.

A Commerce Department spokesman declined to comment.

The State Department is also beginning to develop a strategy to raise U.S. concerns about Chinese cloud computing providers with other countries, two people familiar with the matter said. The agency has quietly raised the topic in conversations with foreign governments, which could help diplomats understand which messages would be most effective, one of the people said.

With many Chinese companies benefiting from significant government subsidies, experts worry that Chinese cloud computing providers may be able to offer contracts at lower prices than their U.S. rivals. The U.S. government could find a way to provide its own foreign aid, or push U.S. cloud providers to offer perks like free training to customers to counter the lure of Chinese companies.

A U.S. State Department spokesman said it was critical that every aspect of the global internet, including data centers, be powered by trusted equipment. The agency is also working to reduce risks associated with wireless equipment, undersea telecommunications cables and satellites, the spokesperson added.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *