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May 16, 2024, 1:22pm EDT
techEast Asia
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Semafor Signals

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Microsoft’s offer to relocate China workers could hit Beijing’s AI ambitions

Insights from The Wall Street Journal, MacroPolo, and South China Morning Post

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The News

Microsoft reportedly asked hundreds of its China-based employees to consider relocating as competition over artificial intelligence technology heats up between the US and China.

The relocation offers to countries like the US, Ireland, and Australia, first reported by The Wall Street Journal, were made to about 700 to 800 employees, mostly engineers of Chinese nationality working in cloud-computing and machine learning operations for the US-based tech giant.

The employees could choose to remain in China, though the South China Morning Post reported that Microsoft has stopped hiring there. Chinese state media emphasized that rumors of a “collective relocation to the US” were “exaggerated and inaccurate.”

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

AI talent a top concern for both countries

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Sources:  
The Wall Street Journal, The New York Times, MacroPolo

The possibility of Microsoft’s Chinese workers moving overseas and staying there carries “indirect risk for China’s AI aspirations,” the Journal noted, given the global dearth of top AI engineers and researchers, who have become “one of the most geopolitically important groups in the world,” The New York Times wrote. Think tank MacroPolo recently found that China now produces more AI talent, but much of that pool goes to the US for graduate school, and the US remains their top destination to work. Still, compared to 2019, more Chinese researchers are staying at home.

Pressure builds on private sector over US-China tensions

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Sources:  
South China Morning Post, The Diplomat, Rhodium Group, Bloomberg Law, Roll Call

The offers show how the geopolitical tensions between the US and China are “being transmitted from the national level to the corporate level” and spilling over to private American companies operating in China, Beijing-based think tank Ambound said. In March, Washington made it harder for China to access cutting-edge AI chips and chipmaking tools, as “economic complaints of an uneven playing field are blending with national security concerns,” the Rhodium Group wrote in a report this week. Washington is also considering new rules for cloud service providers like Microsoft that would crack down on bulk sales and transfers of sensitive data to China, and some US lawmakers have tried to limit how US businesses can invest in China.

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