Biden weighs blocking China’s access to US cloud tech, fearing AI advancement

• Raimondo warns against unwanted access for China to US cloud technology to build AI.
• The Secretary of Commerce is acting to block use of US tech for AI by China due to “security concerns.”
• The move, impacting players like Amazon and Microsoft, is anticipated to escalate tech tensions with China.

The long-standing rivalry between the US and China has evolved into many facades over the last decade. The intensifying competition underscores economic supremacy and national security concerns, shaping the dynamics of a burgeoning tech war. Last year, the battleground extended into the development of AI, but this year, the US has indicated the desire to control and dominate local cloud computing services. 

Recent proposals suggest stringent measures to curb China’s access to US cloud computing firms, fueled by concerns over the potential exploitation of American technology for AI advancement. In a recent interview, US Secretary of Commerce Gina Raimondo emphasized the need to prevent non-state actors and China from utilizing American cloud infrastructure to train their AI models.

“We’re beginning the process of requiring US cloud companies to tell us every time a non-US entity uses their cloud to train a large language model,” Raimondo said at an event on January 27. Raimondo, however, did not name any countries or firms about which she was particularly concerned. Still, the maneuver is anticipated to intensify the technological trade war between the US and China, and signify a notable step toward the politicization of cloud provision.

The focal point of this battle lies in recognizing that controlling access to cloud computing is equivalent to safeguarding national interests. Raimondo parallels the control exerted through export restrictions on chips, which are integral to American cloud data centers. As the US strives to maintain technological supremacy, closing avenues for potential malicious activity becomes imperative.

Therefore, the proposal mandates explicitly firms like Amazon and Google to gather, store, and scrutinize customer data, resembling the weight of stringent “know-your-customer” regulations akin to those shaping the financial sector. Conversely, China has been aggressively pursuing AI development, seeking to establish itself as a global leader in the field. 

The US concerns stem from the dual-use nature of AI technologies, which can have both civilian and military applications. The fear is that China’s advancements in AI could potentially be leveraged for strategic military purposes, posing a direct challenge to US national security.

Of AI, cloud computing, and the US-China tech war

Although the US broadened chip controls in October, focusing on Chinese firms in 40+ nations, a gap remains. That is why it is paramount for the US to address how Chinese companies can still leverage chip capabilities through the cloud. Cloud technology has become the backbone of modern businesses and governments, making it a critical asset in the ongoing tech war. 

From start to finish, cloud computing is inherently political, Trey Herr, director of cyber statecraft at the Atlantic Council, told Raconteur. He said that its reliance on extensive physical infrastructure tied to specific jurisdictions makes it susceptible to local politics, adding that conversations about cloud security inevitably take on political dimensions.

In October 2023, Biden mandated the US Department of Commerce mandate disclosures, aiming to uncover foreign actors deploying AI for cyber-mischief. Now, the Commerce Department, building on stringent semiconductor restrictions for China, is exploring the idea of regulating the cloud through export controls. Raimondo said the concern is that Chinese firms could gain computing power via cloud giants like Amazon, Microsoft, and Google.

“We want to make sure we shut down every avenue that the Chinese could have to get access to our models or to train their models,” she said in an interview with Bloomberg last month. In short, China’s strides in AI and cutting-edge technologies are a paramount worry for the administration. After all, despite Washington’s efforts to curtail China’s progress through chip export restrictions and sanctions on Chinese firms, the nation’s tech giants resiliently achieve substantial breakthroughs, challenging the effectiveness of US constraints.

Nevertheless, regulating such activities in the US is still being determined because cloud services, which do not involve physical goods transfer, fall outside export control domains. Thea Kendler, assistant secretary for export administration, mentioned the potential need for additional authority in this space during discussions with lawmakers last month.

Addressing further loopholes, the Commerce Department also plans to conduct surveys on companies developing large language models for their safety tests, as mentioned by Raimondo on Friday. However, specific details about the survey requests were not disclosed.

What are cloud players saying?

As with previous export controls, US cloud providers fear that limitations on their interactions with international customers, lacking reciprocal measures from allied nations, may put American firms at a disadvantage. However, Raimondo said that comments on the proposed rule are welcome until April 29 as the US seeks input before finalizing the regulation.

What is certain is that the cloud will persist as an arena for trade war extensions and geopolitical maneuvers. Nevertheless, this tech war has broader implications for the global tech ecosystem. It prompts questions about data sovereignty, privacy, and the geopolitical alignment of technological alliances. As the US seeks to tighten its grip on the flow of technology, China is compelled to find alternative routes to sustain its AI ambitions.

The outcome will shape the future trajectory of technological innovation, with ramifications extending far beyond cloud computing and AI development. 

US Commerces Secretary Gina Raimondo confirms the full on economic war on China (and US businesses).

The goal of the US is to slow down China's tech advances. US gonna double down on its sanctions on China pic.twitter.com/7MTyq5IpFO

— Carl Zha (@CarlZha) December 7, 2023