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US considers Alibaba's cloud business

The Biden administration is reportedly looking into Alibaba's cloud business in the US to determine if they pose a national security threat.

Outside Alibaba headquarters in Beijing, China, in August 2021. Photo: Reuters.


Three unnamed sources with knowledge of the matter told Reuters that the investigation by US President Joe Biden's administration took place amid Washington's push to monitor Alibaba's deals with US businesses.

The investigation focuses on how Alibaba stores customer data in the US, including personal information and intellectual property, and whether the Chinese government has access to it. The risk of Beijing preventing US users from accessing data on Alibaba's cloud is also a concern.

US officials can choose to force the Chinese company to apply risk-reducing measures in the cloud business, or ban Americans at home and abroad from using Alibaba's services.

Concerns about Alibaba have been raised since former President Donald Trump, but the investigation was only launched when Biden took office in January 2021, a former Trump administration official revealed.

Alibaba's cloud business in the US is relatively small with less than $50 million in annual revenue. However, if Washington decides to block transactions between Alibaba Cloud and US companies, the group will suffer heavy damage in one of the most promising areas and lose the reputation of the whole business.

A Commerce Department spokesman said the agency does not comment on "reviews of transactions that may or may not exist". The Chinese embassy in the US reacted similarly.

Alibaba declined to comment, but the group expressed concern about its US operations in its recent annual report that US businesses "may be barred from doing business with Alibaba, including enforcing obligations". in agreements relating to cloud services".

The investigation, led by the US Department of Commerce's Office of Intelligence and Security, was established by the Trump administration, with the power to ban or restrict transactions between US businesses and technology, Internet and telecom companies. information of "foreign opponents". The office is focused on Chinese cloud service providers, amid growing concerns about the risk of data leakage and obstruction of user access, according to the source, who asked not to be named.

Via Reuters

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