While the official reasons for this maybe restricting China's military develop or AI, the actual of this sanction goes well beyond that into all of China's digital infrastructure. The most obvious area this sanction targets are China's cloud server operators. Here is an article from 2021 that sounded alarm about China's increasing presence in cloud server space and the implication for America.
Whether we accept this premise or not is irrelevant. It's clear that if people in security circles in Washington thinks that way, it will sanction China.
In this recent GT article, cloud service is an increasingly important part of China's BRI (or digital Silk Road)
Alibaba Cloud, the cloud computing arm of e-commerce giant Alibaba Group, said it currently operates 85 availability zones in 28 regions around the world, offering a complete suite of cloud products and solutions from elastic computing and database to network virtualization services and data analytics.
Among those, 18 availability zones are in the Asia-Pacific and the BRI markets, including the Philippines, Malaysia, Singapore, Indonesia, Thailand, the United Arab Emirates, the company said in a statement sent to the Global Times.
Aside from that, stifling China's AI progress is a way to slow down China's general technology development.
Alipay's intelligent anti-fraud system, Huawei Cloud Computing's AI-assisted drug design platform, and autonomous driving unicorn Horizon Robotics' automotive chip, took SAIL Stars Awards home
Note how only with AI and processing power can you develop these new industries. In Huawei's case, assist in developing drugs.
If you look at the list of GPU servers currently offered by Huawei FusionServer cloud, they are all Nvidia types
I can assure you Alibaba cloud was also prominently featuring all the Nvidia GPUs.
If you look at the CPU list, I would venture to guess they are all Intel/AMD cpus like the ones that you would find on AWS and google cloud.
Keep in mind that here is the ranking of cloud server market share from past year
Alibaba is at 9.5% while Huawei is at 4.6%
While Alibaba continues to lead the Chinese cloud market, it is also poised to be the leading regional provider in Indonesia, Malaysia, and other emerging cloud markets
Alibaba’s global market share expanded to 9.55%, while in Asia Pacific the company has achieved 25.5%. In the past year, the company’s data centers in Indonesia and the Philippines commenced operations. It also announced the availability of its first data center in South Korea in March 2022.
So Alibaba cloud's reach has already reached many ASEAN countries. And it looks like they are still slowly expanding their operations there.
Thai version of Huawei Cloud International Website was launched, and the Huawei Thailand IaaS market share reached 29.44%
similarly, Huawei has hit almost 30% market share in Thailand
Back in 2020, China's big 3 (Alibaba/Huawei/Tencent) reached about 16% total market share in emerging APAC markets. Still well behind Amazon and Microsoft.
So, now that we are clear that Chinese cloud service providers are the only ones challenging American cloud service providers. We also know that American security establishment don't take the idea of Chinese tech companies accessing other countries data too kindly. For both financial and security rationales, it's likely that Chinese cloud service providers will get cracked down to help aws. Aside from Huawei, Tencent/Alibaba/Baidu should all firmly understand by now that American suppliers are entirely untrustworthy. As such, they need to not only offer BR100 on their platform but invest in other GPU players in China. On top of that, they also need to invest in more of the AI chips like Alibaba is doing with Yitian, Baidu is doing with Kunlun and Huawei has been doing. They should not be afraid of sharing technology with each other or else they will get destroyed in this space.
Even if we don't have a tech decoupling, it is easy to imagine a scenario where the commerce department simply denies Chinese cloud service providers from using any of the advanced Intel/AMD CPUs for their ECS host. As such, these big 4 cloud service providers would be really stupid if they do not start providing ECS clusters that are using Chinese chips. Trust me on this, most people when picking their cloud service are not thinking about who designed the chip. They just want to know if it meets their performance requirement. If the Chinese chips can offer competitive performances and be offered at competitive prices, people will use them. This is a way to not only promote Chinese cloud service but Chinese chip industry as a whole. IMO, it should start with promoting BR100/104 along with Yitian/Kunlun/Ascend series, but definitely should not stop there. If they want to thrive, they need to put greater urgency in these projects.
Also, I think a rather fair retaliation is to just not allow further Nvidia development on Chinese soil (or H100 and anything else). Also, if Chinese customers cannot get A100, American customers in China should not be able to get them either.
