Microsoft asks staff in China to relocate amid escalating Washington-Beijing tech tensions

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In brief: With tensions between China and the US continuing to escalate as Washington bans more tech exports, Microsoft is asking some of its cloud computing and AI staff based in the Asian nation to consider relocating to another country.

Microsoft is offering about 700 to 800 people – mostly Chinese engineers – involved in cloud computing and machine learning areas if they would like to relocate from China to countries including the US, Ireland, Australia, and New Zealand, according to the Wall Street Journal‘s unnamed sources.

The WSJ writes that Microsoft employs around 7,000 engineers for its Asia-Pacific research-and-development group, most of whom are based in China. Microsoft says that China is the home of its largest R&D center outside of the US.

“Providing internal opportunities is a regular part of managing our global business. As part of this process, we shared an optional internal transfer opportunity with a subset of employees,” a Microsoft spokesperson told Reuters.

The US has spent the last two years restricting the export of advanced chips and chip-making equipment to China. Washington has repeatedly introduced new rules to prevent its rival from acquiring Nvidia’s AI accelerators, citing fears they could be used for military purposes. The H800 and A800 chips, made specifically to comply with previous rules for selling to China, were restricted for export to the country last October, as was the RTX 4090. The situation has led to resellers salvaging chips from server products and selling them to Chinese entities.

The US has restricted the export of American-made chipmaking tools to China, too, while also encouraging the Netherlands and Japan to follow suit.

Earlier this week, the Biden administration increased tariffs on several Chinese imports. It doubled the tariffs applied to imported Chinese semiconductors, raising them from 25% to 50%, a move it says promotes the sustainability of CHIPS Act investments.

Washington’s next step appears to be the introduction of guardrails around advanced AIs like ChatGPT, restricting the export of proprietary or closed-source AI models to China. There have long been fears that adversarial nations could use generative AI for everything from improving hacking and misinformation campaigns, the latter of which we’re already seeing, to creating biological weapons.

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