US Wants Cloud Firms to Report Foreign Users Building AI (1)

US Commerce Secretary Gina Raimondo said her department is exploring how to force cloud companies to disclose when a foreigner taps their computing power to fuel artificial intelligence applications, signaling the next phase of the tech war between Washington and Beijing.

“We’re beginning the process of requiring US cloud companies to tell us every time a non-US entity uses their cloud to train a large language model,” Raimondo said at an event Friday, without naming any countries or firms.

President Joe Biden in October directed the agency to require such disclosures in an effort to detect foreign actors that might use AI to launch “malicious cyber-enabled activity,” according to Biden’s directive.

The Commerce Department has also been looking into ways to regulate the cloud via export controls, following up on sweeping restrictions limiting China’s access to the most powerful semiconductors. The worry in Washington is that Chinese companies can access the same computing power of those chips through cloud providers such as Amazon.com Inc.’s Amazon Web Services, Microsoft Corp.’s Azure and Alphabet Inc.’s Google Cloud.

Read More: US to Tighten Rules Aimed at Keeping Advanced Chips Out of China

“We want to make sure we shut down every avenue that the Chinese could have to get access to our models or to train their own models,” Raimondo said in an interview last month.

China’s development of AI and other next-generation technologies is a top concern for the administration, which sees Beijing as its primary global strategic competitor. Washington has tried to rein in China’s advances by restricting chip exports to the country and sanctioning individual Chinese firms, but the country’s tech giants have managed to make significant breakthroughs despite US curbs.

The US in October tightened its controls to capture more chips, equipment and geographies. One key update targeted Chinese-headquartered companies operating in more than 40 countries, an attempt to prevent those firms from using other nations as intermediaries to secure semiconductors they can’t access at home.

But what the rules didn’t address is Chinese firms’ ability to tap into the capabilities of those chips via the cloud.

Gina Raimondo in Shanghai in August.

Photographer: Qilai Shen/Bloomberg

It’s unclear exactly how the US would regulate that type of activity. Cloud services don’t involve the transfer of physical goods, and Commerce has specifically said they are beyond the domain of export controls. Thea Kendler, assistant secretary for export administration, told lawmakers last month that “we may need additional authority in that space.”

US cloud providers have worried that restrictions on their activities with overseas users without comparable measures by allied countries risks disadvantaging American firms.

The Commerce Department will separately survey companies that are developing large language models about the results of their safety tests, Raimondo said Friday, though she didn’t provide details about what they will request. Large language models, or LLMs, are the software behind AI tools like ChatGPT.

The potential new requirements come as the Federal Trade Commission opened a separate antitrust inquiry into AI partnerships.

Read More: Alphabet, Amazon, Microsoft Face FTC Inquiry on AI Partners

Microsoft, Amazon and Alphabet didn’t immediately respond to requests for comment.

(Updates with details and context throughout.)

--With assistance from Dina Bass and Matt Day.

To contact the reporters on this story:
Mackenzie Hawkins in Washington at mhawkins71@bloomberg.net;
Anna Edgerton in Washington at aedgerton@bloomberg.net;
Courtney Rozen in Arlington at crozen4@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Ramsey Al-Rikabi, Andrew Pollack

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