U.S. examining Alibaba’s cloud unit for national security risks

The Joe 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.
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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 potential for Beijing to disrupt access by U.S. users to their information stored on Alibaba cloud is also a concern.

Alibaba’s U.S. cloud business is small, with annual revenue of less than an estimated $50 million, according to research firm Gartner. If regulators decide to block transactions between American firms and Alibaba Cloud, it would damage the bottom line one of the company’s most promising businesses and deal a blow to reputation of the company as a whole.

A Commerce Department spokesperson said the agency does not comment on the existence or non-existence of transaction reviews. The Chinese Embassy in Washington did not respond to a request for comment.