US examining Alibaba's cloud business unit for national security risks

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.

Alibaba's U.S. cloud business is small, with annual revenue of less than an estimated $50 million, according to research firm Gartner Inc.