US Examining Alibaba's Cloud Unit for National Security Risks

The Biden administration is reviewing e-commerce giant Alibaba's cloud business to determine whether it poses a risk to U.S. national security, Reuters reported Tuesday, citing three people briefed on the matter, as the government ramps up scrutiny of Chinese technology companies' dealings with U.S. firms. From a report: The focus of the probe is on how the company stores U.S. clients' data, including personal information and intellectual property, and whether the Chinese government could gain access to it, the people said. The potential for Beijing to disrupt access by U.S. users to their information stored on Alibaba cloud is also a concern, one of the people said. U.S. regulators could ultimately choose to force the company to take measures to reduce the risks posed by the cloud business or prohibit Americans at home and abroad from using the service altogether. Former President Donald Trump's Commerce Department was concerned about Alibaba's cloud business, but the Biden administration launched the formal review after he took office in January, according to one of the three people and a former Trump administration official. Alibaba's U.S. cloud business is small, with annual revenue of less than an estimated $50 million, according to research firm Gartner Inc. But if regulators ultimately decide to block transactions between American firms and Alibaba Cloud, it would damage the bottom line one of the company's most promisingbusinesses and deal a blow to reputation of the company as a whole.

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