According to a report by the Wall Street Journal on July 4, the Biden administration is preparing to restrict Chinese companies from using U.S. cloud computing services. This move aims to prevent Chinese firms from circumventing U.S. export bans on advanced process Artificial Intelligence (AI) chips. In response, experts interviewed by the Global Times on the 4th suggested that U.S. pressure on China's semiconductor industry is increasingly becoming extreme.
The Wall Street Journal quoted insiders saying that if this new restriction policy is implemented, the U.S. government may require American cloud service providers such as Amazon and Microsoft to obtain U.S. government permission before offering cloud computing services using advanced process AI chips to Chinese companies. According to the report, through these services, customers can use powerful computing capabilities without purchasing advanced equipment on the control list, such as the A100 chip from U.S. tech company Nvidia. Emily Weinstein, a researcher at Georgetown University's Center for Security and Emerging Technology, believes that if Chinese companies want to use the A100 chip, which has been banned from being exported to China, they can achieve this through any U.S. cloud service provider.
The Wall Street Journal stated that this proposed measure is considered by the Biden administration as an effort to plug a significant "loophole" in its policy restricting China's semiconductor industry. However, this action could further escalate tensions between China and the U.S., two global economic powerhouses. The report mentioned that the Biden administration's move would extend a recent series of restrictive policies introduced by the U.S., and it is expected that the U.S. Department of Commerce will announce this latest restriction policy in the coming weeks.
According to a statistical report released by the International Data Corporation (IDC) in April, as of the end of 2022, Alibaba, Tencent, Huawei, China Telecom, and Amazon were the top five companies in terms of market share in China's cloud computing market. However, the market share of the first four Chinese companies exceeded 64%, while Amazon's market share was 8.6%.
Xiang Ligang, chairman of the Information Consumption Alliance, told the Global Times reporter on July 4 that China's cloud service market is dominated by six domestic companies such as Alibaba and Tencent. These firms have already established a domestic cloud service system, and Amazon and Microsoft have a relatively small market share in China. He pointed out that the effect of the Biden administration's suppression of Chinese AI by restricting cloud services to Chinese companies may not be significant. However, this also indicates that the Biden administration is leaving no stone unturned in suppressing China's high-tech sector and maintaining U.S. hegemony.
