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The US is trying to find an answer to China’s planned export restrictions on rare metals from August. Denying the country access to advanced cloud services seems a
The US is trying to find an answer to China’s planned export restrictions on rare metals from August. Denying the country access to advanced cloud services seems a possible course of action.
The Biden government is considering denying China access to advanced cloud services from Microsoft, Google and AWS. The measure is being considered in response to planned export restrictions on rare metals by China, which in turn are the result of escalating US measures. The trade war between the USA and China has thus reached a new intensity.
Under ex-President Trump, a high-tech trade war began between the two countries. Initially, Huawei in particular was upset, but now the main purpose of the war is to prevent China from reaching the technological level of the US. The goal is to ensure that the Chinese are always at least a generation behind the most advanced American innovations in terms of microchips.
However, China yesterday decided to play an important trump card and announced export restrictions on rare metals such as germanium and gallium. These restrictions come into effect on August 1st. Germanium is one of the most important metals for the development of future generations of microchips. Around 55 percent of all rare earth metals are currently mined in China and the country plays an important role in the supply chain for as much as 85 percent. In other words: China is a quasi-monopolist, so there are few alternatives for the West to procure such materials.
The country has waited quite a long time before taking the drastic step, but is now groaning under embargoes for advanced AI chips and material for making chips itself, such as ASML machines. Limiting exports of rare metals could slow microchip innovation in the West.
The US is now looking for a suitable answer and a ban on the use of American cloud services appears to be on the table. The focus would again be on services that rely on advanced accelerators and focus on AI. Think of instances with Nvidia hardware on board.
Still, China seems to have the upper hand in the trade war it didn’t start on its own. US sanctions can very effectively slow down China’s chip development, but with an export ban on urgently needed metals, the country is once again buying time to catch up with the West in the long term. In any case, another ban on the use of AI cloud services will hurt.
That now appears to be the main outcome of the trade war. There are losers on all sides, the main question is who will lose the most in the long run.
Source: IT Daily
As an experienced journalist and author, Mary has been reporting on the latest news and trends for over 5 years. With a passion for uncovering the stories behind the headlines, Mary has earned a reputation as a trusted voice in the world of journalism. Her writing style is insightful, engaging and thought-provoking, as she takes a deep dive into the most pressing issues of our time.
