US wants to analyze Alibaba’s cloud business and assess national security risk
Report Feds investigate Alibabas cloud unit over national security concerns

The US administration will be interested in analyzing the cloud business of Chinese giant Alibaba, with the aim of assessing whether it could pose a risk to US national security.

The US government will be interested in analyzing the business of the cloud unit of the Chinese giant Alibaba. According to the Reuters agency, which advances the issue citing three sources with knowledge of the plans, the objective of the Biden administration will be to understand if this deal could pose a risk to the national security of the country.

According to the agency, the investigation aims to understand how customer data is stored in the United States, namely personal data and intellectual property. Ultimately, the idea is to assess whether or not the Beijing government can gain access to the data, indicates Reuters.

On the list of fears will be yet another question: if, if it manages to access the data, Beijing will be able to introduce changes to the access of North American users to information.

The Biden administration will thus be, in part, continuing some of the security concerns that marked Donald Trump’s term. In August 2020, just months before the elections, the previous administration issued a warning about Chinese cloud service providers, including Alibaba.

Alibaba’s cloud business in the US is seen as small, given the size of the US market. The consultancy Gartner estimates that this operation generates annual revenues of less than 50 million dollars (43.9 million euros, at the current conversion).

To Reuters, the US Commerce Department indicated that it does not comment on the “existence or not of transaction analysis”.

Once upon a time, the US market was a goal of expanding Alibaba’s cloud business. The escalation of tension between Washington and Beijing changed the plans of the technology company, which in 2015 installed a cloud computing hub in Silicon Valley, the first outside China.

Alibaba’s cloud unit has around four million customers and is described by the company as “the second pillar of growth”. In the third quarter of 2021, the cloud unit saw revenues grow 33% year-on-year to US$3.1 billion (€2.72 billion).

Source: with agencies


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