Crackdown on Chinese Access
At the recent Mount Fuji Dialogue policy forum in Tokyo, Alan Estevez, the U.S. Undersecretary of Commerce for Industry and Security, announced that the U.S. government is contemplating stricter measures to limit Chinese access to cloud-based technologies. This strategy mirrors the recently applied restrictions on AI chip exports to China.
Why the Concern?
Estevez emphasized the significant implications of cloud technologies in the context of military applications. As he stated, “Cloud-based technologies are already fairly ubiquitous. Now, AI itself is also fairly ubiquitous.” He further elaborated on the potential risks, noting that future AI tools could be integral in controlling military logistics and electronic warfare capabilities.
The Current Situation
The Bureau of Industry and Security’s memo from October 17 shows a keen interest in tightening export regulations. The memo outlines new licensing requirements for exporting controlled AI chips to embargoed nations, with China at the forefront of these concerns. This could potentially open the floodgates for further limitations on cloud technologies, although such a move would be more complex due to the non-physical nature of cloud services.
Market Reactions
As the U.S. gears up for these possible regulations, companies are already feeling the pinch. Nvidia, a market leader in AI chip technology, saw its stock dip nearly 5% following news of the stricter export controls. Experts predict that this could create an opportunity for Chinese manufacturers to gain ground as the U.S. tightens its grip on technology exports.
Geopolitical Tensions
The backdrop for this tech tug-of-war is increasingly fraught. Recent skirmishes in the South China Sea, including incidents involving U.S. allied vessels and the Chinese coast guard, have escalated tensions between the nations. In light of these developments, the U.S. has reaffirmed its commitment to protecting Philippine vessels in contested waters, which could further complicate relations with China.
