New Cold War? Some Nations Fear US Can Look at Their Data

Several countries are reluctant to use U.S. cloud and AI systems because they fear the Americans will be able to access their data, according to a South Korean executive with clients in the Middle East.

In an interview with the Financial Times, an executive from Naver, South Korea’s dominant search engine, said it is planning to offer a tailored version of its ChatGPT-like AI model to foreign governments.

Sung Nako, Naver’s executive in charge of developing hyperscale AI, told the newspaper that his company signed an agreement with Saudi Arabia to provide IT services including AI tools for a national digital transformation.

Naver is working on localized AI applications for Arab countries with political sensitivities as well as non-English speaking nations such as Spain and Mexico where custom models are attuned to their politics and cultures.

Sung said Naver could build and run AI applications for these countries at a “much lower” cost than Western cloud providers.

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Sung added that several countries are wary of using American systems due to fears their data could be accessed by the U.S. government.

“It is becoming like a new cold war as the U.S. government now has the authority to look into data and information stored in American companies’ cloud systems,” said Sung.

The Cloud Act

Under the U.S. Cloud Act, the government can force cloud providers to divulge data after meeting legal standards issued by a U.S. court. It applies to any company, regardless of where they are based, that enters U.S. digital space including social media platforms and cloud providers.

A "common misunderstanding … is that it somehow provides the U.S. government with unfettered access to data held by cloud providers,” according to a blog by cloud giant AWS. “This is simply false.”

AWS said when it receives a request for data that is located outside the U.S., it routinely challenges the plea and could even go to court. “AWS is vigilant about its customers’ privacy and security."

Microsoft’s Azure has a similar policy while Google Cloud vets requests on a case-by-case basis. However, none of the three major U.S. cloud providers expressly said it would completely block access to data under any circumstances.