Microsoft offers relocation to hundreds of China-based AI staff amid U.S.-China tech tensions
A man walks past Microsoft’s local headquarters in Beijing on July 20, 2021.
Noel Celis | Afp | Getty Images
Microsoft has reportedly asked China-based cloud computing and artificial intelligence operations employees to consider relocating out of the country, as Washington cracks down on Beijing’s access to the advanced technology.
The Wall Street Journal broke the story on Thursday, reporting that the staff, mostly comprising Chinese engineers, had been offered the opportunity to transfer to countries including the U.S., Ireland, Australia, and New Zealand, according to unnamed sources.
One source told WSJ that Microsoft had made the offer to about 700 to 800 people in total 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 had “shared an optional internal transfer opportunity with a subset of employees” without supplying details on the number and affiliation of staff affected.
“We remain committed to the region and will continue to operate in this and other markets where we have a presence,” the spokesperson said, adding that the potential transfers would not impact operations.
Microsoft employs roughly 7,000 engineers for its Asia-Pacific research-and-development group, with most of this workforce based in China, the WSJ reports.
The move comes amid U.S. efforts to prevent China from developing cutting-edge AI technology, which could be used for military purposes. In the past two years, the U.S. has placed waves of restrictions on China limiting its ability to buy advanced chips and chip-making equipment that can be deployed to train AI models.
Now, the Biden administration is looking to place new guardrails on the export of advanced AI models, such as the large language model that powers Microsoft-backed ChatGPT, according to recent reports.
There is currently little government oversight stopping companies like Microsoft, one of the U.S.’s largest cloud-computing and AI players, from selling or offering AI model services to foreign entities.
The U.S. reportedly fears that AI models, which mine vast amounts of data to generate content, could be used for cyber attacks or to create biological weapons.
Earlier this year, Microsoft released a report stating that state-backed hackers from Russia, China, and Iran had been using tools from OpenAI to hone their skills and support their hacking campaigns.
Microsoft has been deeply ingrained in China for more than three decades, even as other Western tech companies were pushed out by strict regulation. The company says that China is home to its largest R&D center outside of the U.S.
Jensen Huang, chief executive officer of Nvidia Corp., during the US-Saudi Investment Forum at the Kennedy Center in Washington, DC, US, on Wednesday, Nov. 19, 2025.
Stefani Reynolds | Bloomberg | Getty Images
In the weeks leading up to Nvidia’s third-quarter earnings report, investors debated whether the markets were in an AI bubble, fretting over the massive sums being committed to building data centers and whether they could provide a long-term return on investment.
During Wednesday’s earnings call with analysts, Nvidia CEO Jensen Huang began his comments by rejecting that premise.
“There’s been a lot of talk about an AI bubble,” Huang said. “From our vantage point we see something very different.”
In many respects, Huang’s remarks are to be expected. He’s leading the company at the heart of the artificial intelligence boom, and has built its market cap to $4.5 trillion because of soaring demand for Nvidia’s graphics processing units.
Huang’s smackdown of bubble talk matters because Nvidia counts every major cloud provider — Amazon, Microsoft, Google, and Oracle — as a customer. Most of the major AI model developers, including OpenAI, Anthropic, xAI and Meta, are also big buyers of Nvidia GPUs.
Huang has deep visibility into the market, and on the call he offered a three-pronged argument for why we’re not in a bubble.
First, he said that areas like data processing, ad recommendations, search systems, and engineering, are turning to GPUs because they need the AI. That means older computing infrastructure based around the central processor will transition to new systems running on Nvidia’s chips.
Second, Huang said, AI isn’t just being integrated into current applications, but it will enable entirely new ones.
Finally, according to Huang, “agentic AI,” or applications that can run without significant input from the user, will be able to reason and plan, and will require even more computing power.
In making the case of Nvidia, Huang said it’s the only company that can address the three use cases.
“As you consider infrastructure investments, consider these three fundamental dynamics,” Huang said. “Each will contribute to infrastructure growth in the coming years.”
Reversing the slide
In its earnings release, Nvidia reported revenue and profit that sailed past estimates and issued better-than-expected guidance. Last month, Huang provided a $500 billion forecast for sales of the company’s AI chips over calendar 2025 and 2026.
The company said on Wednesday that its order backlog didn’t even include a few recent deals, like an agreement with Anthropic that was announced this week or the expansion of a deal with Saudi Arabia.
“The number will grow,” CFO Colette Kress said on the call, saying the company was on track to hit the forecast.
Prior to Wednesday’s results, Nvidia shares were down about 8% this month. Other stocks tied to the AI have gotten hit even harder, with CoreWeave plunging 44% in November, Oracle dropping 14% and Palantir falling 17%.
Some of the worry on Wall Street has been tied to the debt that certain companies have used to finance their infrastructure buildouts.
“Our customers’ financing is up to them,” Huang said.
Specific to Nvidia, investors have raised concerns in recent weeks about how much of the company’s sales were going to a small number of hyperscalers.
Last month, Microsoft, Meta, Amazon and Alphabet all lifted their forecasts for capital expenditures due to their AI buildouts, and now collectively expect to spend more than $380 billion this year.
Huang said that even without a new business model, Nvidia’s chips boost hyperscaler revenue, because they power recommendation systems for short videos, books, and ads.
People will soon start appreciating what’s happening underneath the surface of the AI boom, Huang said, versus “the simplistic view of what’s happening to capex and investment.”
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