The US is seeking active involvement from cloud services providers like Amazon. com Inc. and Microsoft Corp. in identifying and reporting foreign clients who develop artificial intelligence applications on their platforms. This move escalates the ongoing technology conflict between Washington and Beijing. As per the proposal set to be released on Monday by the Biden administration, these firms will be required to disclose the names and IP addresses of foreign customers. Amazon, Google, and other similar companies will have to allocate a budget for collecting this information and report any suspicious activities, as stated in the draft rule published on Sunday. If implemented, these requirements could potentially restrict Chinese firms' access to the data centers and servers that are critical for AI training and hosting. Additionally, they also place the responsibility of collecting, storing, and analyzing customer data on the cloud services providers, similar to the "know-your-customer" regulations governing the financial industry. US cloud providers have expressed concerns that restrictions on their activities with foreign users without comparable measures by allied countries could put American firms at a disadvantage. Representatives for Microsoft, Amazon, and Google have not yet responded to requests for comment outside of normal US hours. The Commerce Department referred Bloomberg to Commerce Secretary Gina Raimondo's comments from last week.

Raimondo mentioned that her team is actively working to address national security threats posed by AI development, with a particular focus on Chinese companies. Washington aims to limit China's ability to develop AI with potential military applications, following its efforts to restrict Beijing's access to advanced semiconductors. Raimondo stated in Washington, "These models getting in the hands of non-state actors or people that aren't our allies is very dangerous. " In October, President Joe Biden directed the Commerce Department to enforce such disclosures to identify foreign actors who may utilize AI for "malicious cyber-enabled activities. " The proposed rule is open for public comments until April 29 before its finalization. The Commerce Department mentioned the possibility of exceptions to the identification rules for foreign subsidiaries of US cloud providers. It also acknowledged the input received from commenters advocating for a broad definition of a US cloud service, and clarified that it will address whether foreign subsidiaries fall under these rules. China's advancements in AI and other next-generation technologies are a major concern for the US administration, which considers Beijing as its primary global strategic competitor. Besides restricting chip exports and imposing sanctions on Chinese companies, Washington has been trying to rein in China's progress. However, despite these measures, Chinese tech leaders have achieved significant breakthroughs. In October, the US tightened its controls on chips, equipment, and regions in an effort to prevent Chinese-headquartered companies operating in over 40 countries from using intermediaries to obtain semiconductors that are restricted domestically. Read More: Billionaires and Bureaucrats Mobilize China for AI Race With US.