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U.S. plans to restrict China access to cloud services: WSJ

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The Biden administration plans to curb China’s access to cloud computing services provided by companies such as Microsoft
MSFT,
-0.75%

and Amazon.com
AMZN,
-0.11%
,
the Wall Street Journal reported Tuesday.

Citing sources characterized as familiar with the situation, the report indicated that the new rules meant U.S. companies would likely need government authorization before allowing Chinese customers access to cloud services using advanced AI chips.

The latest volley coincides with a Sino-American chip war and comes a week after the Wall Street Journal reported that the White House was mulling a ban on the export of AI chips to China. That would make it more difficult for companies such as Nvidia and Advanced Micro Devices
AMD,
+1.68%

to sell advanced chips to any Chinese company working on AI applications.

Nvidia 
NVDA,
+0.26%

Chief Financial Officer Collette Kress has said that if the U.S. escalates the ban it will result in a “permanent loss of opportunities” globally.

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Read: Nvidia continues to show it has ‘significant advantages’ over rivals, analyst says in boosting bullish view

The Journal report suggested the likes of Nvidia and AMD could prospectively secure government licenses allowing them to continue to do businesses with Chinese entities.

The Biden administration in October slapped a ban on China’s import of high-end chips, and in January it put curbs on the country’s purchase of lithography machines used in the production of high-performance chips.

Beijing announced Monday that it would tighten exports of metals used in the making of advanced chips.

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The U.S. Commerce Department is due to roll out the new restrictions in the next few weeks, as part of export controls on semiconductors that began last October, the Journal’s sources reportedly said. The Commerce Department declined to comment on that report, and representatives of Amazon and Microsoft didn’t have any immediate response, the Journal reported.

Read: Yellen’s China trip: 3 key issues to watch

MarketWatch has also reached out to the Commerce Department, Microsoft and Amazon for responses.

The latest ripple comes ahead of a meeting between Treasury Secretary Janet Yellen and senior Chinese government officials aimed at trying to repair a relationship between the two countries that has seen intensifying strain, notably over the past year.

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