Microsoft asks some China staff to relocate amid Sino-US tensions

(Reuters) -Microsoft is asking some of its China-based staff to consider transferring outside the country, the company said on Thursday, as Sino-U.S. relations strain amid a race for cutting-edge technology.

Washington has been trying to limit Beijing's access to advanced chips used in AI applications on grounds that they can be used to strengthen the country's military, sparking tensions that have put pressure on U.S. companies operating in China.

Microsoft is asking about 700 to 800 people who are involved in machine learning and other cloud computing-related work to consider relocating, according to the Wall Street Journal, which first reported the news.

"Providing internal opportunities is a regular part of managing our global business. As part of this process, we shared an optional internal transfer opportunity with a subset of employees," a Microsoft spokesperson said in an emailed statement, without specifying the number of employees it sent the request to.

Microsoft remains committed to China and will continue to operate there and other markets, the spokesperson said.

The Windows maker is among U.S. companies that have the largest presence in China. It entered the market in 1992 and operates a large research and development center in the country.

The employees, mostly engineers of Chinese nationality, were earlier in the week offered an option to transfer to the U.S., Ireland, Australia, and New Zealand, WSJ reported, citing people familiar with the matter.

Reuters could not immediately verify those details.

The move comes days after U.S. President Joe Biden's administration hiked tariffs on various Chinese imports including electric vehicle batteries, computer chips and medical products.

Reuters reported earlier this month that the U.S. Commerce Department is considering a new regulatory push to restrict the export of proprietary or closed-source AI models, whose software and the data it is trained on are kept under wraps.

(Reporting by Kanjyik Ghosh, Surbhi Misra and Akash Sriram in Bengaluru and Fanny Potkin; Editing by Nivedita Bhattacharjee)