Amazon Shuts Down China AI Lab Amid Rising Regulation

Amazon has closed its Artificial Intelligence (AI) lab for development in Shanghai, following IBM and Microsoft, who had previously reduced their presence in China. At one time, this lab focused on development work for their Alexa voice assistant, and then it also supported their global operations. It generated almost $1 billion in annual sales on its own.  

The closure is certainly a result of China’s new data and AI regulatory requirements imposed on both domestic and foreign companies. The reports indicate the lab grew to over 200 employees, and a handful of new offer letters were issued to employees to relocate to the United States.  Whether the employees took the offers or any of such value is uncertain. The closure of the Amazon AI lab is indicative of some US companies reconsidering their operational footprint in China due to data management and geopolitical tensions.  

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The Amazon lab that operated in Shanghai was part of their cloud division, AWS, and contributed to the development of natural language processing tools and voice recognition technology-based AI interfaces. Even though the lab was a billion dollar producer, it became a greater strategic risk because of the tightening oversight and scrutiny of the Chinese government.  

Airbrushing the lab will make Amazon more like IBM and Microsoft, which have downsized their Chinese AI footprint for the same regulatory-based reasons. The closure of the AI lab is further evidence of the greater decoupling between the Chinese and American tech sectors.