Biden’s new firewall to halt China’s AI development via US cloud firms

• The US wants players like Amazon and Microsoft to vet foreign AI developers on cloud platforms, escalating tech tensions with China.
• The proposal, which will require firms to disclose foreign clients’ details, is aimed at curbing Chinese access to vital AI infrastructure.
• The US seeks feedback on the proposed rule till April 29 before finalizing the regulation.

In the ever-accelerating space of AI, superpowers often grapple with the profound implications of non-allied entities gaining momentum, especially in military applications. That’s most apparent between the US and China, marked by a tit-for-tat strategy to curtail each other’s developmental strides. Just after the US added advanced computing chips to its export control arsenal, China retaliated by prohibiting certain firms from dealing with Micron Technology and imposing export restrictions on essential metals for advanced chip production. 

But that was 2023.

This week, we are witnessing the latest twist in this tech saga unfold, as reports suggest the Biden administration is now contemplating requiring US cloud service providers to unmask all foreign AI developers. 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. 

“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,” US Commerce Secretary Gina Raimondo said at an event on January 27. Raimondo, however, did not name any countries or firms, but the maneuver is anticipated not only to intensify the technological trade war but also to signify a notable step toward the politicization of cloud provision.

For Raimondo, the aim is simple: to eradicate national security threats posed by AI development–an effort experts believe would likely focus on firms from China. If enacted, these measures would almost certainly strangle a vital pathway for Chinese firms to reach the core of data centers and servers essential for nurturing and accommodating their AI goals. 

Of AI, cloud computing, and 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. 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. The Commerce Department, building on stringent semiconductor restrictions for China, is now exploring the regulation of the cloud through export controls. Raimondo said the concern is Chinese firms gaining 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 continue to make substantial breakthroughs, challenging the effectiveness of US constraints.

Nevertheless, regulating such activities in the US is still being debated because cloud services, which do not involve the physical transfer of goods, 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. 

 

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