By Li Panpan

(JW Insights) Jun 25 -- Cloud computing companies, which operate vast data centers that provide computing power and software to businesses, would become a new technological front in the digital cold war between the United States and China, according to an article in New York Times published on June 21.

Over the last 18 months, the Biden administration and members of Congress have ramped up their exploration of what can be done to address security concerns about the cloud computing divisions of Chinese tech behemoths like Alibaba and Huawei, said New York Times.

Chinese cloud companies are making inroads in Asia and Latin America. Huawei’s chairman said last year that his company had seen “rapid growth” in its cloud business. In May, Huawei hosted a cloud conference in Indonesia. Alibaba convened a gathering in Mexico last year to promote its cloud products.

The global cloud computing market is substantial, with total public cloud revenues of $544 billion last year, according to Synergy Research Group. In the United States, Chinese companies account for a tiny fraction of the cloud market, despite having data centers in Silicon Valley and Virginia, said John Dinsdale, the chief analyst at Synergy.

American officials fear that Beijing could use Chinese data centers in the United States and abroad to gain access to sensitive data, echoing concerns about Chinese telecom gear and TikTok. Cloud computing is a crucial behind-the-scenes engine of the digital economy, enabling services like video streaming and allowing companies to run artificial intelligence programs, said New York Times.

Samm Sacks, a cyber policy fellow at the New America think tank, said the interest in cloud computing reflected the Biden administration’s approach of looking at Chinese influence in the infrastructure of the internet and the digital services that use the web.

American officials have discussed whether they can set tighter rules for the Chinese companies when they operate in the United States, as well as ways to counter the companies’ growth abroad, three of the people said. The Biden administration has also spoken with the American cloud computing companies Google, Microsoft and Amazon to understand how their Chinese competitors operate, three other people with knowledge of the matter said.

By focusing on the Chinese cloud companies, U.S. officials are potentially widening the scope of the technological tensions between Washington and Beijing. In recent years, the United States has choked China’s access to crucial technologies while trying to limit the reach of Chinese tech and telecommunication companies abroad, said the New York Times article.

China’s top foreign affairs official Wang Yi told US Secretary of State Antony J. Blinken in his June visit to Beijing that the United States needed to stop interfering with China’s technological development.