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China’s cloud computing companies raise concerns for the US

In digital cold war Between the United States and China, US officials are increasingly turning their attention to a new target: the Chinese cloud computing giant.

Over the past 18 months, the Biden administration and members of Congress have accelerated an exploration of what can be done to address security concerns about the Chinese tech giant’s cloud computing divisions. alibaba and Huawei, said five people with knowledge of the matter.

The three people said US officials have discussed whether they could set tighter rules for Chinese companies when operating in the United States, as well as ways to counter the companies’ growth overseas. Can Three other people with knowledge of the matter said the Biden administration has also spoken to US cloud computing companies Google, Microsoft and Amazon to better understand how their Chinese competitors operate.

By focusing on Chinese cloud companies, US officials are potentially widening the scope of tech tensions between Washington and Beijing. In recent years, the United States has China’s access to critical technologies blocked While efforts are being made to limit the access of Chinese technology and telecommunications companies abroad.

Former President Donald J. Trump has directed his administration Disrupting Chinese Telecom Equipment Manufacturers Like Huawei and ZTE from playing a role in the next generation of 5G wireless networks. Trump administration also targeted Chinese owned apps TIC Toc And Grindr forced the latter’s sale, and began working to restrict Chinese involvement in undersea internet cables. President Biden has continued some of these efforts.

Cloud computing companies, which operate vast data centers providing computing power and software to businesses, will become a new technology frontier as China pushes back on US barriers. On Monday, Wang Yi, China’s top foreign affairs official,… Secretary of State Antony J. told Blinken That the United States must stop interfering in China’s technological development.

But US officials fear Beijing could use Chinese data centers in the United States and abroad to gain access to sensitive data, mirroring concerns about Chinese telecoms gear and TikTok. cloud computing It 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 provide comment, while Alibaba and Tencent, another Chinese tech giant with a cloud division, did not respond to requests for comment. Google, Amazon and Microsoft declined to comment.

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

“The intent is to focus on the entire ecosystem in those layers,” he said.

US efforts to disrupt Chinese tech companies have met with mixed success. US sanctions on Huawei’s suppliers have hurt the company’s smartphone business, but efforts continue to remove Huawei equipment from wireless networks inside the United States. trump administration Chinese owners of Grindr forced out to sell the app, while efforts to persuade Chinese internet giant ByteDance to sell TikTok have been unsuccessful.

According to Synergy Research Group, the global cloud computing market is huge, with total public cloud revenue last year at $544 billion. In the United States, Chinese companies have a small share of the cloud market, despite having data centers in Silicon Valley and Virginia, 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 his company had seen “exponential growth” in its cloud business. In May, Huawei hosted a cloud conference in Indonesia. Alibaba held a gathering in Mexico last year to promote its cloud products.

Senator Mark Warner, a Democrat from Virginia, said in a statement that he is concerned that the Federal Communications Commission may block some Chinese companies from providing telecommunications services in the United States, but that those companies “should still be able to provide services such as cloud computing”. Are.” Mr. Warner wrote legislation that would give the White House more power to police Chinese technology.

In April, nine Republican senators wrote a letter to a group of administration officials encouraging them to investigate and punish Chinese cloud companies they said were threatening national security, including Huawei, Alibaba, Tencent and Baidu. are at risk.

“We urge you to use all available tools to engage in decisive action against these companies,” he added.

The Commerce and State departments are considering how to handle Chinese cloud computing companies, said four people with knowledge of the matter.

The two people said the Commerce Department is considering enacting stricter rules that would govern Chinese cloud providers. It could make rules under a new legal authority allowing it to restrict technologies that could pose a threat to national security.

A spokeswoman for the Commerce Department declined to comment.

The State Department has also begun developing a strategy to raise US concerns about Chinese cloud computing providers with other countries, two people with knowledge of the matter said. The agency has already quietly raised the topic in conversations with foreign governments, one of the people said, which could help diplomats understand what messages work best.

Because many Chinese companies benefit from major government subsidies, experts fear that Chinese cloud computing providers may be able to award contracts below their American competitors’ rates. The US government may find a way to counter the temptations of Chinese companies by offering its own overseas assistance or urging US cloud providers to offer benefits such as free training to customers.

A State Department spokeswoman said it is critical for every aspect of the global Internet, including data centers, to be powered by trusted equipment. The spokesman said the agency is also focusing on mitigating risks associated with wireless equipment, undersea telecommunications cables and satellites.

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