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US plans to limit China’s access to cloud computing

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The Biden administration is planning to restrict Chinese companies’ access to US cloud computing services.

It’s part of efforts to protect advanced technology and could potentially strain relations between the two economic superpowers. 

The new rule would require US cloud service providers to seek permission before offering cloud computing services using advanced AI chips to Chinese customers.

Read More: China bans Micron chips in an ongoing tech battle with the US

This move follows a series of measures Washington and Beijing took in the ongoing conflict over access to advanced technology supply chains

Beijing announced export restrictions on metals used in advanced chip manufacturing, coinciding with an upcoming visit to China by Treasury Secretary Janet Yellen.

The proposed restriction addresses a significant loophole where Chinese AI companies could bypass export control rules by utilizing cloud services. 

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By using these services, Chinese companies could access powerful computing capabilities without purchasing controlled equipment, including chips such as Nvidia's A100 chips.

The US Commerce Department is expected to announce the action in the coming weeks as part of an expansion of its semiconductor export control policy. 

This policy is an effort to limit transfers of chips and other products and services to Chinese companies, driven by concerns over China's advancements in artificial intelligence and its military applications.

Read More: LinkedIn to cut 716 jobs and shut down Chinese app 

The ban on cloud services would be the latest retaliatory action between the two countries.

China banned some firms from purchasing products from Micron Technology, a major US memory-chip maker.

The new policy would extend the export control policy to additional companies beyond semiconductor and equipment manufacturers. 

Amazon Web Services and Microsoft's Azure, prominent US cloud service providers already present in the Chinese market, are expected to be the most affected. 

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The potential action has not garnered an immediate response from Microsoft or Amazon.

In addition to these measures, the Biden administration may also consider restricting US cloud companies from offering services to users linked to military, security, or intelligence services in China and other countries of concern.

The upcoming regulations will also expand the restrictions on artificial intelligence chips made by Nvidia and other chip makers. 

The US is also expected to align its list of controlled chip-making equipment with the Netherlands and Japan.

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