US Set to Strike Back After China Curbed Metals Exports By Restricting Access to Cloud Services Like AWS

Tensions between the United States and China are escalating again, and the West is preparing to cut off Chinese companies’ access to cloud-computing services, such as the ones offered by Microsoft and Amazon.

The information shared by people familiar with the matter claims that this is the response to China’s decision to curb metals exports.

Washington is at least considering cutting off China’s firms from cloud computing, so any company seeking to offer such services to Chinese companies (for certain applications) would first have to seek government approval.

This requirement will particularly focus on China’s companies that seek to use cloud computing for training AI models.

The order may be implemented as early as the next few weeks, by the US Department of Commerce, according to anonymous informants.

It will come as part of an expansion of the US semiconductor export control policy, which was previously introduced in October 2022.

No Metals, No Cloud Computing Services

Earlier this week, on Monday, China said it intends to control exports of some metals commonly used in semiconductor manufacturing.

The move comes as the nation’s latest attempt to disrupt the US’ access to high-tech microchips. The two economic powers have been clashing in this area for some time, pushing the US to find ways of becoming less reliant on China’s technology.

That meant pushing its own microchip development, and the country made steps to ensure that it would do just that.

However, with control over metals used in the process, China can still disrupt the US by limiting raw materials.

According to the Asian country’s statement, the metals control was aimed at protecting national security and its own interests.

This will require exporters to request permission to ship gallium and germanium products.

Washington’s response was to consider ordering American companies like Microsoft and Amazon to limit their cloud services to China.

Microsoft Azure and Amazon Web Services (AWS) are the leading forces when it comes to offering internet computing to global enterprises.

China has its own providers, such as Alibaba Group Holding Ltd. However, US-based firms are still in the lead.

US and China Locked in a Tech Trade War

Neither the White House nor any of the cloud service providers issued a clear statement or responded to any questions as of yet.

US government sectors were also either refusing to comment or deferred the questions to a different sector.

The Biden administration’s decision to limit China’s access to cloud computing comes after the order to restrict sales of some artificial intelligence chips to China back in October.

The US government seemingly wants to contain the rivaling nation’s technological development as well as build its own self-reliant semiconductor chip industry to secure its geopolitical and economic future.

The country also intends to revise export controls and make selling chips to China without a license harder.

This will also be covered by the broader Commerce Department proposal, expected to emerge at some point in July.

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