In the digital cold war in between the United States and China, American authorities are increasingly focusing on a new target: China’s cloud computing behemoths.

Over the last 18 months, the Biden administration and members of Congress have increased their investigation into what can be done to address security concerns regarding China’s digital behemoths like Alibaba and Huawei’s cloud computing businesses, sources said.

American authorities have considered whether they may impose stricter controls on China’s enterprises operating in the United States, as well as strategies to offset the companies’ international expansion. According to reports, the Biden administration has also engaged with American cloud computing firms Google, Microsoft, and Amazon to better understand how their China’s counterparts work.

By concentrating on China’s cloud businesses, US authorities risk exacerbating the technology tensions between Washington and Beijing. In recent years, the US has limited China’s access to critical technologies while also attempting to limit the international reach of China’s technology and telecommunications firms.

Former President Donald Trump instructed his administration’s efforts to prevent China’s telecom equipment manufacturers such as Huawei and ZTE from participating in next-generation 5G wireless networks. The Trump administration also targeted Chinese-owned applications such as TikTok and Grindr, requiring the latter to be sold, and started seeking to limit China’s engagement in undersea internet cables. President Joe Biden has maintained several of these initiatives.

Cloud computing firms, which run massive data centres that give processing power and software to enterprises, would open up a new technical front, much how China has pushed back against US obstacles. This week, China’s senior foreign affairs official, Wang Yi, urged Secretary of State Antony Blinken that the US should cease meddling with China’s technology development.

However, American officials are concerned that Beijing may utilise China’s data centres in the US and elsewhere to acquire access to critical data, mirroring fears about China’s telecom equipment and TikTok. Cloud computing is a critical behind-the-scenes engine of the digital economy, enabling services such as video streaming and allowing businesses to run AI programmes.

A representative for the White House declined to comment. Huawei did not reply to calls for comment, and neither did Alibaba or Tencent, another China’s IT behemoth with a cloud business. Google, Amazon, and Microsoft did not respond to requests for comment.

According to Samm Sacks, a cyber policy scholar at the New America think tank, the focus in cloud computing reflects the Biden administration’s strategy of looking at China’s involvement in internet infrastructure and digital businesses that use the internet.

The United States’ efforts to stymie China’s IT businesses have had mixed results. American restrictions on Huawei’s suppliers harmed the company’s smartphone sales, but efforts to remove Huawei equipment from US wireless networks persist. The Trump government compelled Grindr’s Chinese owners to sell the app, and efforts to persuade China’s internet behemoth ByteDance to divest TikTok were futile.

According to Synergy Research Group, the worldwide cloud computing business is enormous, with total public cloud sales of $544 billion last year. According to John Dinsdale, chief analyst at Synergy, despite having data centres in Silicon Valley and Virginia, Chinese enterprises account for a miniscule portion of the cloud industry in the United States.

However, Chinese cloud enterprises are expanding across Asia and Latin America. Last year, Huawei’s chairman stated that his company’s cloud business had grown rapidly. Huawei conducted a cloud conference in Indonesia in May. Last year, Alibaba held a conference in Mexico to promote its cloud offerings.

Sen. Mark Warner, D-Va., said in a statement that while the Federal Communications Commission might restrict some Chinese corporations from offering telecom services in the United States, same companies could still provide services such as cloud computing. Warner drafted legislation that would give the White House greater authority over Chinese technology.

In April, nine Republican senators wrote to a group of administration officials, urging them to investigate and penalise Chinese cloud businesses such as Huawei, Alibaba, Tencent, and Baidu that they said presented a threat to national security.

They encourage individuals to use all available instruments to take immediate action against these corporations.

According to insiders, the Commerce and State departments have been debating how to deal with Chinese cloud computing businesses.

The Commerce Department has considered tightening the laws that regulate Chinese cloud providers. It might establish the restrictions using a new legislative power that would allow it to ban technology that could endanger national security.

In addition, the State Department has begun to build a strategy for communicating American concerns about Chinese cloud computing companies to other nations. The CIA has already brought up the subject quietly in meetings with other countries, which can assist diplomats in determining which messages work best.

Because many Chinese enterprises get significant government subsidies, analysts fear that Chinese cloud computing providers will be able to offer contracts at lower prices than their American counterparts. To offset the Chinese corporations’ inducements, the US government may find a means to give its own international aid or press American cloud providers to provide incentives to consumers such as free training.

According to a State Department official, it is important that every facet of the global internet, including data centres, be powered by reliable technology. The organisation was also focusing on decreasing dangers related with wireless devices, undersea telecom cables, and satellites, according to the spokeswoman.

Conclusion.

Over the last 18 months, the Biden administration and members of Congress have increased their investigation into what can be done to address security concerns regarding Chinese digital behemoths like Alibaba and Huawei’s cloud computing businesses.