Tech giant Microsoft (NASDAQ:MSFT) is moving some of its artificial intelligence (AI) researchers from China to Canada, the Financial Times reported. The company has started applying for visas to shift about 20 to 40 AI experts from its Beijing-based Microsoft Research Asia (MSRA) lab. The move comes amid escalating tensions between the U.S. and China. While Microsoft agreed that it is establishing a new lab in Canada, it said that the number of people that the Financial Times said are being moved was inaccurate.
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MSFT Shifting Key AI Talent Out of China
Meanwhile, sources think that another reason behind the decision to move some of the staff out of China-based MSRA is to prevent talent from being poached by domestic tech companies, which are aggressively looking for AI researchers to develop generative AI applications following the hype created by OpenAI’s ChatGPT.
Microsoft said that it is setting up a new lab in Vancouver that will be “organizationally aligned” with MSRA. The company added, “The lab will be staffed with people from other MSR labs around the world, to include China.” However, the company said that the number reported by Financial Times is not accurate and there is no “so-called Vancouver Plan.”
Meanwhile, one of the MSRA researchers who turned down job offers from Chinese internet companies and is applying for a visa to shift to Canada said that despite Microsoft’s strong ties with Beijing, there is a risk in the company having its best researchers in the country, especially those in machine learning. He added that they had discussed risks like poaching of talent and potential harassment by Chinese authorities in internal meetings.
Given Microsoft’s presence in China over three decades and a workforce of about 9,000 in the country, any decision to shift its crucial AI team might not bode well with the Chinese government. On the other hand, increased collaboration with China in sensitive areas like AI might invite the Biden administration’s wrath. For the time being, Canada appears to be a safe zone for Microsoft’s AI research and development.
Is Microsoft a Buy, Sell, or Hold?
Microsoft has gained a lot of attention this year due to its aggressive AI initiatives, with the company making a significant investment in OpenAI.
Last week, BMO Capital analyst Keith Bachman raised the price target for Microsoft to $385 from $347 and reiterated a Buy rating on the stock. Bachman is “increasingly confident” that MSFT is establishing its position as an AI leader. He believes that AI can drive incremental revenue opportunities for Microsoft over the next few years and is encouraged by the company’s pace of development.
MSFT shares have risen over 36% year-to-date. The average price target of $345.45 implies nearly 6% upside potential. Wall Street’s Strong Buy consensus rating on MSFT stock is based on 30 Buys, four Holds, and one Sell.
