Microsoft offers staff to relocate from China

Microsoft has extended an offer to some of its China-based staff to relocate outside the country, as tensions rise between Beijing and Washington over sensitive technology including artificial intelligence.

The software giant “shared an optional internal transfer opportunity with a subset of employees”, according to a company spokesperson on Thursday, adding that Microsoft will “continue to operate in [China] and other markets where we have a presence”.

The relocation offer comes as Washington tightens export controls on technology including advanced semiconductors over national security concerns. The US government is also voicing increasing concern over the potential for foreign actors to exploit AI “for harmful purposes”.

The Biden administration in January proposed new rules that would require US cloud companies to disclose when foreign actors train the most powerful AI models using their systems.

The Wall Street Journal first reported news of the relocation offer. Chinese media reported that the US group had extended the global transfer offers to staff in the company’s Azure cloud group working on machine learning and related AI fields.

Microsoft is racing against rivals including Amazon and Google to win market share in the rapidly developing generative AI space, with the company expected to showcase its capabilities prominently at its annual developer conference next week.

It took an early lead in the space as a result of its partnership with prominent start-up OpenAI, the company behind ChatGPT.

Microsoft and other tech giants are jostling for the best AI talent despite broader lay-offs in the wider technology sector. This year, Microsoft hired the bulk of AI start-up Inflection’s staff.

In China, Microsoft has a research and development team of engineers working on projects including integrating AI with products such as the Bing search engine.

In total the group has roughly 9,000 employees in the country, with the majority engineers working on global products from Beijing, Shanghai or Suzhou, according to a person familiar with the matter.

Microsoft chief executive Satya Nadella said in an interview with Bloomberg TV in January that “China is not a large business for Microsoft”, with the majority of revenue coming from multinational companies with operations in the country.

He said the Chinese engineers hired at Microsoft “contribute to an American’s company’s intellectual property”.

The Financial Times reported last year that Microsoft was trying to move its top AI experts from the Beijing-based Microsoft Research Asia to its institute in Vancouver in response to heightened tensions between Beijing and Washington and as a defensive move to stop talent bleeding to domestic AI rivals. Microsoft denied there was such a plan.