US looks to limit China's access to key cloud services

The Biden administration is considering limiting China's access to cloud computing services. This move is in response to Chinese companies using rented cloud compute instances to evade US chip bans and often at a cheaper cost. The proposed rule would necessitate cloud computing companies to secure government approval before serving Chinese clients.

Proposed Cloud Computing Ban: In response to Chinese companies circumventing US chip bans through renting cloud compute instances, the Biden administration is planning to restrict China's access to cloud computing services.

The new rule, if implemented, would require cloud computing companies to get government permission before serving Chinese clients.

The Importance of Powerful Hardware: Both the US and China possess some of the most powerful hardware globally, which is crucial as customers worldwide seek to develop large models and other AI workloads.

Powerful hardware is essential in the current era where global customers are investing in developing large models and other artificial intelligence-related tasks.

Sanctions and Rules: The US and China have enforced various sanctions and rules to limit the other's access to computing components in an attempt to prevent potential advancements in computing capabilities.

The US has already banned the export of AI chips to China, and with this new move, it plans to virtually ban China from using any US technology for AI tool development.

Potential Enforcement of the Ban: The US Department of Commerce has not commented on the potential ban, but insiders suggest the change could be implemented within weeks.

This change would affect how US cloud companies interact with their Chinese customers.

Countermeasures by China: The ongoing trade dispute is not one-sided, as China has retaliated by banning the export of certain chip-making materials and some chips.

This countermove has affected some US Micron customers.