Bipartisan Bill Introduced to Close Cloud-Related Export Control Loophole

Citing a Financial Times report that Chinese artificial intelligence developers are evading controls on advanced semiconductors by using cloud services, members of the House introduced a bill to stop those practices, called Closing Loopholes for the Overseas Use and Development of Artificial Intelligence (CLOUD AI). The bill was introduced last month, and its text published this week.

The measure directs the Commerce Department to issue regulations within 180 days of the bill becoming law to prevent U.S. persons or firms "from providing support for the remote use or cloud use of any integrated circuit listed under Export Control Classification Number 3A090 and 4A090 of the Export Administration Regulations by an entity located in the People’s Republic of China or Macau."

"The Department of Commerce’s export controls were an important step to protecting American artificial intelligence innovation, but we cannot let China skirt the rules," Rep. Jeff Jackson, D-N.C., the bill's lead sponsor, said in a news release. "We must ensure American technology cannot be used by the [Chinese Communist Party] to strengthen its military and develop new technologies to suppress groups like the Uyghurs."

The House Select Committee on China has also raised the use of cloud computing by Chinese AI developers as a problem (see 2307310031).

Rep. Jasmine Crockett, D-Texas, a co-sponsor, said in the release: "The use of foreign and overseas cloud services by Chinese firms and the PRC to circumvent controls represents a clear and present threat to US technological competitiveness, as well as to the safety and security of Americans’ privacy. Now more than ever, Congress must come together and identify areas to improve advancements in technology, competition, and national security. Today’s step closes a critical gap in the efficacy of our export controls."

Reps. Michael Lawler, R-N.Y., and Rich McCormick, R-Ga., are also original co-sponsors of the bill.