Recent insights suggest that the US authorities may be considering constraining the reach of Chinese firms into cloud computing services, driven by security concerns.

As per a story in The Wall Street Journal, US decision-makers are examining the feasibility of limiting China’s access to cloud computing services. This move aims to protect and maintain the US’s competitive edge in high-tech sectors.

The story suggests that the current administration in the US might introduce regulatory measures to restrict the extent to which Chinese businesses can leverage US-based cloud computing platforms such as AWS and Microsoft.

The providers, including but not limited to those named above, would require explicit governmental permission before they can offer services featuring high-performance AI chips to Chinese customers, as reported by The WSJ, citing informed insiders.

This proposed measure would address a significant bypass in existing chip export sanctions, which, according to national security experts, Chinese companies could exploit to circumvent restrictions via cloud services.

Analysts propose that, through cloud services, Chinese clients could tap into sophisticated computing capabilities without needing to acquire the embargoed chips, like Nvidia’s A100 chips, that find extensive use in AI research and development.

The insiders suggest that the Commerce Department is expected to introduce these new guidelines in the coming weeks, as reported by The WSJ.

Google Cloud and AWS were approached by Cointelegraph for comments, but they have yet to respond.

The US government initially imposed restrictions on Chinese access to semiconductor chips in October 2022 in an attempt to stem technological advancement abroad. These regulations blocked Chinese developers from accessing the more advanced chips available globally.

On June 28, the administration announced it was considering strengthening the existing measures by reducing the computing power in chips still eligible for export.

In a countermove, the Chinese government declared on July 3 that it plans to control the exports of gallium and germanium products, both crucial in the production of semiconductors necessary for AI development.

As one of the leading global producers of gallium and germanium, China’s limited access to these metals could have adverse implications for the chip manufacturing sector.