The U.S. administration is set to restrict Chinese firms’ access to U.S. AI cloud services in a bid to “close loophole in chip-export controls”, the Wall Street Journal first reported.
The U.S. Commerce Department is currently planning this move, which according to sources familiar with the matter could see U.S. cloud-service providers such as Amazon and Microsoft having to seek U.S. government permission before they provide cloud-computing services using advanced AI chips to Chinese customers.
National security analysts have warned that Chinese AI companies might have worked around existing export control rules by using cloud services that help customers gain powerful computing capabilities without purchasing advanced equipment.
In a similar fashion, schemes for obtaining A100 chips by American technology company Nvidia in China’s underground markets in the wake of U.S. sanctions were uncovered in a Reuters investigation last month.
This latest development comes days after China’s government banned the export of two rare metals in gallium and germanium, as used in the manufacture of crucial semiconductors, earlier this week. At the same time, the U.S. move is feared to further sour relations between the two leading economies.
As part of its trade battle for the technological upper hand which dates back to 2018, the two major economies have been ramping up market restrictions, with the Biden administration explaining its move as spurred by concerns over the impact of AI technologies and military applications.
Earlier this year, China banned some of its own firms from buying from Micron Technology, the largest memory-chip maker in the U.S. On the software front, Chinese tech giant Huawei has resorted to creating its own ERP system, MetaERP, after being placed on the U.S. entity list.
In the meantime, U.S. Treasury Secretary Janet Yellen has arrived in China as part of a large-stake attempt to patch up the relationship between the two economies.
Previously outlined in an official brief, Yellen’s main goals are to discuss with Chinese officials the economic importance for the two countries to responsibly manage their relationship, to communicate directly about areas of concern and work together to address global challenges.
The U.S. Commerce Department has been approached for comment.
