America's tech giants are scrambling to build Japan a classified cloud network to counter China — while the same cloud ecosystem they sell as "secure" is already vacuuming up American developers' secrets without consent.
Oracle, AWS, Microsoft, and Google are competing for a Japanese government contract to build high-security cloud services for intelligence sharing between Tokyo and its allies, Benzinga reported. The push comes straight from Washington, which has long pressured Japan to harden cyber defenses against Chinese hacking as the U.S. seeks deeper weapons co-production and stronger deterrence against Beijing. U.S. Ambassador to Japan George Glass is personally coordinating a working group with the companies and the Japanese government.
The fix looks familiar. After a March call between President Trump and Prime Minister Sanae Takaichi, Japan chose a U.S.-based cloud provider. Oracle — founded by Larry Ellison, a prominent Trump ally — became the frontrunner by emphasizing stronger security features. Japan hasn't made a final decision and could still split the award, potentially building an air-gapped cloud for highly sensitive data before integrating commercial cloud tech for less-classified information.
Follow the money. Oracle needs this contract. The company's stock suffered its worst month since 1990 in June, erasing $100 billion of Ellison's personal fortune. Full-year capital expenditure soared 162% to $55.7 billion, pushing free cash flow to negative $23.7 billion. That's a company burning cash to build AI infrastructure, hunting for government contracts to justify the spend.
Meanwhile, the "secure" cloud these giants peddle is anything but. Security researcher cereblab published a wire-level analysis on July 12 proving that xAI's Grok Build coding CLI was packaging developers' entire tracked repositories — full Git history, committed secrets, API keys — and shipping them to a Google Cloud Storage bucket, TNW reported. The upload volume was roughly 27,800 times greater than the task required. xAI had marketed the tool claiming "nothing from your codebase transmitted to xAI servers during a session." The privacy toggle that was supposed to prevent transmission did nothing. A quarter of European firms have already banned Grok entirely.
So the picture sharpens. American tech giants build classified cloud infrastructure for foreign nations with U.S. diplomatic muscle behind the deal. The same cloud ecosystem leaks American developer secrets by the terabyte. Oracle burns billions chasing AI buildout and needs foreign contracts to make the math work. An American ambassador personally lobbies to steer the deal toward a Trump ally's company. And xAI hoovers up codebase secrets while promising the opposite.
Japan's classified cloud gets built with American diplomatic weight behind it. American developers' API keys get shipped to Google Cloud buckets without consent. Who's securing whom?
