US to Limit China’s Access to Cloud Computing Services

Restricting China’s Access to Cloud Computing Services

The United States is contemplating putting restrictions on China’s access to cloud computing services in order to protect its cutting-edge technology, according to a report from The Wall Street Journal.

The Biden Administration has proposed limiting the amount of access Chinese businesses have to cloud computing services, such as Amazon Web Services (AWS) and Microsoft, the report said, citing sources close to the matter. These services use powerful artificial intelligence (AI) chips, and providers will need government approval before providing them to Chinese customers.

This would close a loophole in the sanctions on chip exports which analysts believe Chinese companies have been using cloud services to bypass.

US Sanctions and Chinese Access to Advanced Computing

Analysts suggested that Chinese customers could take advantage of cloud services to access cutting-edge computing capabilities, without having to purchase the sanctioned chips like Nvidia’s A100 chips, which are commonly used in AI development.

Sources claim that the US Commerce Department will announce the new regulations within the following weeks, as reported by The WSJ.

Cointelegraph has contacted both Google Cloud and AWS for comment but has not yet received a response.

In October 2022, the US imposed its initial sanctions on Chinese access to semiconductor chips, in an effort to impede the technological progress of the industry abroad. These regulations cut Chinese developers off from the more advanced chips available on the market.

China’s Impact on the Chip Manufacturing Industry

On June 28, the administration said it was considering tightening the above measures to include clamping down the computing power in chips that are still able to be exported.

The Chinese government then announced on July 3 that it planned to implement controls on exports of gallium and germanium products, both of which are heavily used in Web 3.0 and AI development.

China is one of the world’s top producers of gallium and germanium. Limited access to these metals could have a potentially negative impact on the chip manufacturing industry, and could affect the crypto market.