When Microsoft opened its advanced research lab in Beijing in 1998, it was a time of optimism about technology and China.
The company employed hundreds of researchers at the lab, which pioneered Microsoft’s research in voice recognition, image recognition, facial recognition, and the type of artificial intelligence that would later produce online chatbots like ChatGPT. The Beijing location eventually became one of the most important AI research institutes in the world. Microsoft co-founder Bill Gates said it was an opportunity to tap into China’s “rich intellectual talent”.
But as tensions between the U.S. and China escalate over which country will lead the world’s technology future, Microsoft’s top leaders, including CEO Satya Nadella and President Brad Smith, , we have been discussing what to do with this valuable research institute. For at least the past year, four current and former Microsoft employees said.
The company has received questions from U.S. officials about whether it will be able to maintain a 200-person advanced technology lab in China, the people said. Microsoft said it had installed guardrails in its labs to restrict researchers from doing politically sensitive work.
The Redmond, Washington-based company said it also plans to open a research outpost in Vancouver, British Columbia, and move some researchers from China to the location. The outpost will serve as a backup should more researchers need to be relocated, two people said. Though the idea of closing or relocating the lab has been floated, Microsoft executives support keeping it in China, four people familiar with the matter said.
“We remain as committed as ever to the world-class research of our Institute and this team,” Peter Lee, who heads Microsoft Research, a network of eight laboratories around the world, said in a statement. Stated. “There have been no discussions or claims to close down Microsoft Research Asia, and we look forward to continuing our research program,” he added, using the institute’s official name.
The debate over Microsoft stands out because it is one of the few major US tech companies, along with Apple and Tesla, to have a foothold in China. As China cultivates its domestic technology industry and geopolitical tensions with the United States increase, American companies such as Google have scaled back their presence in China. Other US social media sites such as Facebook and X have been blocked in China for years.
Microsoft-owned LinkedIn shut down its professional social network in China in 2021, citing increased compliance demands. But Microsoft has maintained its Bing search engine as the only foreign search engine in China, despite heavy censorship, and has made its Windows operating system, cloud computing, and applications available to Chinese companies. provided to customers.
Microsoft has been discussing the future of the lab for several years, according to five people familiar with the situation. It has become a target of national security concerns amid the rise of AI and escalating acts of aggression between the United States and China. Hypothetical risks include the possibility that China could hack into research labs, or that Chinese researchers could quit Microsoft and join Chinese companies that work closely with the government, officials said. said.
The Biden administration has spent the past two years drafting legislation that would ban new U.S. investment in companies that develop sensitive technology in China that Beijing could use to build up its military, two people familiar with the conversations said. He said he informally asked Microsoft about the institute. (The proposed rule, published in August, is not yet final.)
Senators questioned Smith about Microsoft’s relationship with China during a subcommittee hearing on AI in September. He said the country accounted for 1.5% of Microsoft’s revenue ($212 billion last year).
Microsoft faces a “difficult balance,” said Chris Miller, author of “Chip War,” a book that traces the geopolitical history of technology. “They need to consider where trust in the political system is going.”
The White House declined to comment.
Microsoft’s research lab in Beijing was created when Gates appointed Taiwanese-born AI researcher Kai-Fu Li to run its operations. (Dr. Lee later left and joined Google, where he now runs a venture capital firm.)
Many of the researchers at the institute were leading experts in their respective fields, and were researching technologies such as speech recognition, computer vision, and natural language understanding, which are the basis for the development of artificial intelligence. Some of the institute’s researchers have held senior positions at Chinese technology giants such as Alibaba, Baidu and Tencent, as well as at startups such as Megvee, a facial recognition company that has contributed to the country’s massive state surveillance system. Some people contributed to its establishment.
In 2018, Microsoft announced that it had invested more than $1 billion in research and development in China over the past decade. The Beijing institute’s technological genius and inventions support significant internal arguments in its favor.
But the lab’s success and prestige has also drawn attention in Washington, where the White House has increasingly restricted access to critical Chinese technology on national security grounds.
Microsoft leaders discussed how to manage tensions. Mr. Gates remains in regular contact with company executives to support global engagement and has long supported the Beijing lab, the people said. He traveled to China in June and met President Xi Jinping, who described him as “the first American friend I’ve met this year.”
Microsoft’s technology and research leaders, including Peter Lee and chief technology officer Kevin Scott, have also backed the lab, saying it has produced significant technological breakthroughs. said two people involved. Mr. Smith also supports the lab.
“The lesson of history is that countries succeed when they learn from the world,” Smith said in a statement. “Guardrails and controls are very important, but engagement is still important.”
Microsoft has restricted the projects Chinese researchers can work on in recent years, according to people familiar with the matter. Last fall, Chinese researchers were not allowed to join a small Microsoft team that had early access to GPT-4, an advanced AI system developed by Microsoft partner OpenAI.
Microsoft said the lab also has limited work related to quantum computing, facial recognition, and synthetic media. The company also prevents students and researchers from hiring or collaborating with universities associated with the Chinese military.
(The New York Times sued OpenAI and Microsoft last month for copyright infringement over training AI systems.)
At the institute’s outpost in Vancouver, researchers will have unfettered access to critical technologies such as computing power and OpenAI systems needed for cutting-edge research, two people familiar with the institute said.
Kate Conger I contributed a report from San Francisco.