As part of its ongoing efforts to safeguard advanced technology, the Biden administration is planning to limit the access of Chinese companies to U.S. cloud-computing services, The Wall Street Journal reports.

Implications for Cloud Service Providers

According to sources familiar with the matter, the proposed rule would likely necessitate U.S. cloud-service providers, including Amazon.com Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT), to obtain government approval before offering cloud-computing services that utilize advanced artificial-intelligence chips to Chinese customers.

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Addressing a Significant Loophole

This move is seen as a strategy to close a significant loophole. National security analysts have raised concerns that Chinese AI companies might be circumventing current export controls by using cloud services, which allow users to access powerful computing capabilities without having to purchase advanced equipment, such as the A100 chips by American technology company Nvidia (NASDAQ:NVDA).

Further Straining U.S.-China Relations

The new restriction, if implemented, is expected to add to the ongoing tension between the U.S. and China over access to the supply chain for the world’s most advanced technology. The Biden administration has been escalating efforts to limit the transfer of chips and other products and services to Chinese companies due to concerns about China’s advancement in artificial intelligence technologies and their potential military applications.

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