Microsoft proposes relocation of hundreds of China-based AI employees

Microsoft has reportedly asked China-based employees of its cloud computing and artificial intelligence operations to consider moving out of the country as Washington cracks down on Beijing’s access to advanced technology.

The Wall Street Journal broke the story on Thursdayreporting that the staff, made up of mostly Chinese engineers, had been given the option to transfer to countries including the US, Ireland, Australia and New Zealand, according to unnamed sources.

One source told the WSJ that Microsoft made the offer to a total of about 700 to 800 people who were involved in machine learning and other work related to cloud computing.

CNBC could not independently verify the report.

In a statement shared with CNBC, a Microsoft spokesperson confirmed that the company has “shared an optional internal transfer opportunity with a subset of employees,” without providing details on the number or affiliation of the affected staff.

“We remain committed to the region and will continue to operate in this and other markets where we are present,” the spokesman said, adding that the potential transfers would not affect operations.

Microsoft is hiring roughly 7,000 engineers for its research and development group in the Asia-Pacific region, with the majority of that workforce based in China, the WSJ reports.

The move comes amid US efforts to prevent China from developing cutting-edge AI technology that could be used for military purposes. Over the past two years, the US has imposed waves of restrictions on China, limiting its ability to buy advanced chips and chip-making equipment that can be used to train AI models.

Now, the Biden administration is looking to put new safeguards in place for the export of advanced AI models, such as the large language model that powers Microsoft-backed ChatGPT, according to recent reports.

Currently, there is little government oversight that stops companies like Microsoft, one of the biggest cloud computing and AI players in the US, from selling or offering AI model services to foreign entities.

The US reportedly fears that AI models, which mine vast amounts of data to generate content, could be used for cyberattacks or to create biological weapons.

Earlier this year, Microsoft published a report stating that state-sponsored hackers from Russia, China and Iran have used tools from OpenAI to improve their skills and support their hacking campaigns.

Microsoft has been deeply rooted in China for more than three decades, even as other Western technology companies have been pushed out by strict regulation. The company says China is its homeland the largest R&D center outside the US

Read the full report from the Wall Street Journal.