US examining Alibaba's cloud unit for national security risks

Probe said to focus on how firm stores data of US clients and whether Beijing could access it

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WASHINGTON • 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 investigation 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, ac

cording to the people. One of them said the potential for Beijing to disrupt access by US users to their information stored on Alibaba cloud is also a concern.

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.

The US-listed shares of Alibaba fell nearly 3 per cent before the market opened on Tuesday.

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 last January, according to one of the three people and a former Trump administration official.