London Daily

Focus on the big picture.
Saturday, Oct 17, 2026

US Examining Alibaba's Cloud Unit For National Security Risks: Report

US Examining Alibaba's Cloud Unit For National Security Risks: Report

The focus of the probe is on how the company stores US clients' data, including personal information and intellectual property. The potential for Beijing to disrupt access by US users to their information stored on Alibaba cloud is also a concern.

The Biden administration is reviewing e-commerce giant Alibaba's cloud business to determine whether it poses a risk to US national security, according to three people briefed on the matter, as the government ramps up scrutiny of Chinese technology companies' dealings with US firms.

The focus of the probe is on how the company stores US 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 US users to their information stored on Alibaba cloud is also a concern, one of the people said.

US 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 US 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 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.

Alibaba declined to comment. It did flag similar concerns about operating in the US in its most recent annual report, saying US companies that have contracts with Alibaba "may be prohibited from continuing to do business with us, including performing their obligations under agreements involving our...cloud services."

The probe into Alibaba's cloud business is being led by a small office within the Commerce Department known as the Office of Intelligence and Security. It was created by the Trump administration to wield broad new powers to ban or restrict transactions between US firms and internet, telecom and tech companies from "foreign adversary" nations like China, Russia, Cuba, Iran, North Korea, and Venezuela.

The office has been particularly focused on Chinese cloud providers, one of the sources said, amid growing concern over the potential for data theft and access disruption by Beijing.

The Trump administration issued a warning in August, 2020 against Chinese cloud providers including Alibaba, "to prevent US citizens' most sensitive personal information and our businesses' most valuable intellectual property...from being stored and processed on cloud-based systems accessible to our foreign adversaries."

Cloud servers are also seen as ripe for hackers to launch cyber attacks because they can conceal the origin of the attack and offer access to a vast array of client networks.

While there are scant public cases of the Chinese government compelling a tech company to turn over sensitive customer data, indictments of Chinese hackers reveal their use of cloud servers to gain access to private information.

For example, hackers connected to the Chinese Ministry of State Security penetrated HPE's cloud computing service and used it as a launch pad to attack customers, plundering reams of corporate and government secrets for years in what US prosecutors say was an effort to boost Chinese economic interests.

"PILLAR OF GROWTH"


Alibaba, the world's fourth largest cloud provider according to research firm Canalys, has about 4 million customers and describes its cloud business as its "second pillar of growth." It saw a 50% rise in revenue to $9.2 billion in 2020, though the division accounts for just 8% of overall sales.

It has boasted business relationships with units of top US companies including Ford Motor Co, IBM's Red Hat, and Hewlett Packard Enterprise, according to press releases.

While the sweeping Trump era powers don't cover foreign subsidiaries of US companies, US regulators have previously found ways to link them to their US parent companies, which can in turn be subject to restrictions.

Before tech tensions between the United States and China started to boil, Alibaba had big ambitions for its US cloud business. In 2015, it launched a cloud computing hub in Silicon Valley its first outside of China, with plans to compete with Amazon.com Inc, Microsoft Corp and Alphabet Inc's Google. It later added additional data centers there and in Virginia. A person familiar with the matter says the company scaled back its US gambit during Trump's presidency as tensions with China escalated.

In 2018, US authorities blocked a bid by Alibaba affiliate Ant Financial, now Ant Group, to acquire US money transfer company MoneyGram International Inc over national security concerns. But a move to put Ant Group on a trade blacklist failed and an executive order banning its mobile payment app Alipay was revoked by Biden .

Biden, like Trump, has placed more and more restrictions on Chinese companies. Last month, the US government put investment and export curbs on dozens of Chinese firms , including top drone maker DJI, accusing them of complicity in the oppression of China's Uyghur minority or helping the military.

Newsletter

Related Articles

0:00
0:00
Close
Russell Brand Trial Begins at Southwark Crown Court
UK Parliament to Debate Climate Risks and Council Tax Following Public Petitions
Department for Transport Demands Safety Audits Following Regional Rail Disruptions
House of Lords Scrutinizes Amendments to Armed Forces Bill
Devolved Administrations in Scotland and Wales Criticize Post-Brexit Funding Framework
Prime Minister Andy Burnham Defends Middle East Military Support Under Parliamentary Scrutiny
NHS Leaders Warn of Severe Pressure on Hospitals from Winter Virus Outbreaks
Retailers and Business Groups Lobby Chancellor for Relief from Rising Employment Taxes
City of London Taskforce Urges Radical Reform to Prevent UK From Becoming "Incubator Nation"
Bank of England Officials Signal Potential November Interest Rate Hike
Institute for Fiscal Studies Warns of £35 Billion Funding Gap in Upcoming Autumn Budget
IMF Upgrades UK Growth Forecast to 1.3% for 2026
Former UUP leader Jeffrey Donaldson sentenced to 15 years in prison for historical child sex offences
UK ministers adopt independent commission blueprint to fast-track AI in the NHS
Labour leadership orders local councillors to end power-sharing deals with Green Party
UK government considers regulatory intervention in proposed Sky and ITV merger
Environment Agency declares severe drought across six English regions as reservoirs hit critical lows
NHS England issues new guidance prohibiting transgender women from female-only wards
Norwegian teenager sentenced to 20 years for part of Iran-backed assassination plot in Britain
UK government threatens complete visa ban on Eritrea over refusal to accept deportees
UK Treasury lobbies UBS to move global headquarters to London amid banking sector tax threats
MI5 Warns of Growing Russian Sabotage and Espionage Threats Across Britain
UK Prime Minister Andy Burnham Plans Brussels Talks to Renegotiate Post-Brexit Trade Deal
MI5 Warns of Rising Russian and Iranian Sabotage Threats to British Military Facilities
UK Prime Minister Andy Burnham Pledges Closer EU Ties as MI5 Reveals Russian Brexit Interference
UK Orders Security Review Following Reported Killing of Former Politician Ann Widdecombe
UK Prime Minister Andy Burnham Meets German Chancellor Merz to Strengthen European Security Ties
Nearly 100,000 NHS Patients Treated in Hospital Corridors as England Braces for Winter Pressures
UK Government Rejects US-Russia Diesel Agreement and Reaffirms Sanctions Against Moscow
UK and Germany Agree to Deepen Security and Economic Cooperation Following Berlin Talks
British Prime Minister Burnham Pledges Closer EU Ties During Visit to Germany
UK Announces New Sanctions on 17 Russia-Linked Entities During Foreign Secretary's Ukraine Visit
UK and Germany Finalize Kensington Treaty to Strengthen Defense and Technology Cooperation
Britain Maintains Diplomatic Mission in East Jerusalem Despite Israeli Closure Deadline
English Councils Push Government to Rethink Proposed Funding Cuts
Scottish Homebuilding Falls to Lowest Level in 11 Years
BBC Chief Matt Brittin Defends Restructuring as Staff Challenge Job Cuts
UK Finance Warns High Energy Costs and Bond Yields Are Complicating Fiscal Outlook
UK Adopts All 44 Recommendations on Regulating AI in Healthcare
Chancellor John Healey Prepares Autumn Budget as Borrowing Costs Strain Public Finances
UK Investigators See Strong Indications of Iranian Link After RAF Fairford Security Operation
Laura Trott Pledges Tighter Controls on Political Activism in UK Classrooms
Welsh Ministers Launch Long-Term Review of North Wales and Anglesey Crossings
Welsh Government Orders 18-Month Study of Road Solutions Around Newport
Reform UK MP Sarah Pochin Faces Scrutiny Over £800,000 Second Home Purchase
British Households Grow More Concerned About Fuel and Energy Prices
NHS Leaders Warn of Rising Winter Pressure on Emergency Departments
Kemi Badenoch Proposes £2.3 Billion Employer National Insurance Cut for Young Workers
Middle East Conflict Could Erase UK Fiscal Headroom, Economists Warn
Manchester City Found Guilty of Multiple Premier League Financial Rule Breaches
×