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Report: Microsoft could restrict Azure customers based in China

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Microsoft could be made to restrict cloud customers from China if the Biden administration brings in new rules to limit Chinese companies from accessing US cloud-computing services. It wouldn’t only be Microsoft affected, but all cloud services that grant access to hardware on a control list such as the NVIDIA A100 chips.

According to sources that spoke to The Wall Street Journal, the US Commerce Department could unveil the plans to restrict access in the coming weeks and it’ll make up part of the wider semiconductor export control policy.

The US has a list of artificial intelligence chips on a control list that cannot easily be exported to China. Chinese AI companies, however, can sign up for cloud services that offer access to these chips remotely, and right now, it’s completely legal for Chinese companies to do this.

If the rules do come into force, it would stymie China’s access to the chips and it would either need to make its own or source similar hardware from another country, but the US is making this second option hard too. Neowin earlier reported that China had put export controls on semiconductor materials after the US leant on the Dutch government to restrict the export of advanced semiconductor machinery to China.

If the restrictions are brought in, it wouldn’t mean that all Chinese companies would lose access, it would just mean that US cloud providers would need government approval before they could provide cloud services that use AI chips. Specific use cases that may have a hard time getting approval include the development of AI technologies and military applications.

The Wall Street Journal’s sources said that the new rules could be announced by the US government in the coming weeks. China will likely have some countermeasures ready to go to use in retaliation.

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