https://finance.yahoo.com/news/exclusive-u-examining-alibaba…
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The Biden administration is reviewing e-commerce giant Alibaba’s cloud business to determine whether it poses a risk to U.S. national security, according to three people briefed on the matter, as the government ramps up scrutiny of Chinese technology companies’ dealings with U.S. firms.
The focus of the probe is on how the company stores U.S. clients’ data, including personal information and intellectual property, and whether the Chinese government could gain access to it, the people said.
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I don’t see anything particularly new in this story. As it mentions, BABA reported the potential for US regulation to impact its cloud business in its annual report. This just confirms that the Biden administration is continuing some of the policies that the Trump administration started, and is concerned about and following up on potential security concerns, both national and personal, related to Chinese tech companies.
I don’t see this as good news, but also not anything that materially changes BABA’s prospects going forward. Market reaction is muted at this point: share price has recovered from a fairly steep dip on opening, and is now down just about what the overall market is.
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BABA shares are showing some strength today, at the moment down less than the broad market despite widespread reporting of the news in the OP of this thread. I feel like in the past year this kind of news reporting would have sent the stock down significantly despite what the market was doing. Could this be a signal that the weak holders have mostly washed out of the stock? Can’t say. We have not seen the traditional high volume blowout low that often-times accompanies major lows.
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Why would a U.S. company choose to go with Alibaba vs Amazon or any other American cloud provider ?
Are prices and services not competitive among all such providers ?
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Why would a U.S. company choose to go with Alibaba vs Amazon or any other American cloud provider ?
Are prices and services not competitive among all such providers ?
I expect they are competitive, and I could see Alibaba offering a significant discount to land a big US customer if the powers that be weren’t getting in the way. Apparently they had at least one large US customer, but the Trump administration’s restrictions caused them to leave Alibaba. There were no specifics but that general scenario was discussed in a quarterly report a while ago as the reason for Alibaba Cloud showing little growth for a quarter or two.
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