Alibaba Cloud is on US’ radar, as Washington is obsessed with assaulting Chinese high-tech sector
Published: Jan 19, 2022 06:19 PM
Alibaba Cloud Photo: VCG

Alibaba Cloud Photo: VCG

Alibaba Cloud, the cloud computing division of Alibaba Group, is now reportedly on the US government's radar as the latter once again cited the alleged "national security risk" in its ruthless attempt to assault Chinese high-tech companies, ranging from 5G to artificial intelligence.

The tendency that the Biden administration will continue to pressure China's high-tech sector is unlikely to change in the near future, as the Biden administration is taking all conceivable ways to harm Chinese high-tech development. 

The Biden administration is assessing whether Alibaba Cloud poses a risk to US national security, as the government ramps up scrutiny of Chinese technology companies' dealings with US firms, Reuters reported Wednesday, citing three people briefed on the matter. 

The focus of the probe is on how Alibaba Cloud stores its US clients' data, including personal information and intellectual property, and whether the Chinese government could gain access to it, according to the report.

The US is still using the same mafia-like logic favored by the former Trump administration: All Chinese companies, regardless of their controlling shareholders and business models, have the possibility to threaten US security because they believe that the Chinese government can obtain personal information through them, but the accusation of which is groundless, Fu Liang, an independent tech analyst, told the Global Times on Wednesday.

"The US government is like executing within the review scheme as proposed by the so-called 'Clean Network' program proposed in 2020 by the former Trump administration, through which Washington sought to remove Chinese networking gear from infrastructure in the US," Fu said.

Originally focusing on 5G, the program later aimed to secure mobile carriers, app stores, apps, cloud systems, and submarine cables. 

Three Chinese mobile operators - China Mobile, China Telecom and China Unicom - were delisted from the New York Stock Exchange after a Trump-era decision to restrict US private investment in Chinese technology companies.

If the probe result leads to blocking transactions between Alibaba Cloud and its US clients, it won't represent a major blow to the Chinese firm's overall business, Fu said.

"Alibaba Cloud is one of the units that have enjoyed fast growth over the past two years, and its major cloud business came from China and Southeast Asia, where the demand for digitalization is rising rapidly," Fu noted. The firm's market share is ranked first in the Asia-Pacific region.

The annual revenue of Alibaba Cloud's US business was estimated at $50 million, according to research firm Gartner.

Under the unfavorable circumstances, however, it will indeed pose some obstacles to the firm's cloud business internationally which it has been trying to expand lately, but still trails dominant cloud players like Amazon and Microsoft in global market share.

In 2020, the global IaaS (infrastructure as a service) market reached $64.29 billion, up 40.7 percent year-on-year, with Amazon Web Services (AWS), Microsoft Azure and Alibaba Cloud ranking in the top three globally.