"Cloud computing" is a widely used but not well understood term. Basically, it's using a service provider to store and process data, usually from multiple organizations.
The Carnegie Endowment has published a report "Cloud Security: A Primer for Policymakers" reviewed in Cyber Security Intelligence. The report provides a nuanced picture of cloud layers - data centers, network cables, virtual software and applications.
Cloud services are concentrated in the hands of a few "hyper scale" service providers. While cloud services can reduce costs, increase efficiencies, and provide better security, this concentration creates problems of its own.
Policymakers must balance two concerns. On the one hand, most organizations have ineffective cyber security. On the other, the systemic risk of concentrating data storage in a few giant firms could result in a catastrophe. Lloyd's estimates a three to six day outage of a major cloud service provider could cause economic losses. Cloud services could become a target for attackers looking to steal large amounts of data.
A collaborative approach by major service providers would increase security against common threats. While there are antitrust concerns, other industries have taken steps to address security collectively. The alternative is government regulation.
Consumers seeking to use cloud service providers must use due diligence to understand security implications and how information will be protected.