Amazon has closed its artificial intelligence research center in Shanghai, citing growing political pressure from the US.
The lab, which had been part of AWS since 2018, was dissolved as a result of strategic adjustments in the context of US-China tensions, according to a social media post from scientist Wang Minjie. Wang described his six years with the team as a golden era for foreign research labs in China, noting that the lab produced over 100 published papers and developed an open-source neural network framework based on graph data. According to Wang, this framework generated about $1 billion in revenue for Amazon.
The closure comes amid broader layoffs at Amazon worldwide. A company spokesperson confirmed to the Financial Times that some roles in certain AWS teams are being cut to optimize resources.
In 2022, Amazon employed more than 10,000 people in China, including over 1,000 at AWS. The cloud business primarily serves international companies operating in China and Chinese tech firms with global operations. However, tighter US export controls on chips and cloud services have made it harder for Chinese researchers to collaborate with international partners, the Financial Times reports.
Other major US tech companies have also scaled back their China operations. IBM cut more than 1,000 R&D positions across several cities in 2023. In 2024, Microsoft offered hundreds of employees in its cloud and AI divisions the option to relocate abroad. Amazon has already exited other business areas in China: the company closed its Chinese e-book store in 2023 and withdrew from e-commerce in 2019, citing fierce competition from Alibaba.
McKinsey bans generative AI projects in China
Meanwhile, McKinsey has recently barred its China practice from taking on generative AI projects, including for multinational clients based in China. According to the Financial Times, the move is a direct response to mounting political scrutiny from Washington over sensitive technologies like AI and quantum computing.
The policy does not affect traditional AI projects but targets a core area of future growth that, according to an insider, could limit McKinsey's ability to attract new clients. Generative AI now plays a central role in many corporate strategies.
McKinsey has previously faced criticism for advising both Chinese state-owned enterprises and the US Department of Defense. In 2023, CEO Bob Sternfels was questioned about this issue in the US Congress.
In a statement, McKinsey said it updated client policies in China in 2023 and now focuses primarily on multinational and Chinese private-sector companies.
