The global technological landscape continues to be reconfigured. Two of the most influential giants in the industry, Microsoft and IBM, have started to reduce their presence in China, a maneuver that reflects the increasing impact of geopolitical tensions between the United States and the Asian country, especially in sectors such as artificial intelligence, cloud computing, and semiconductor development.
Microsoft closes its AI and IoT lab in Shanghai
According to the South China Morning Post, Microsoft has quietly closed its IoT & AI Insider Lab in Shanghai, a flagship center established in 2019 in the Zhangjiang tech zone. This lab, aimed at boosting the local startup ecosystem in artificial intelligence and the Internet of Things, was key in developing over 50 startups, achieving more than $1.3 billion in investment and training around 10,000 industry professionals.
The closure reportedly occurred in January or February 2025. The headquarters is now empty, and Microsoft has not issued any official statement. Nevertheless, the decision coincides with the company’s offer made in 2024 to approximately 800 employees from its AI and cloud computing divisions in China to relocate to other regions due to the increasing restrictions imposed by Washington on the Chinese tech sector.
Brad Smith, president of Microsoft, previously noted that China accounts for only about 1.5% of the firm’s global revenue, which could justify a strategic withdrawal in light of regulatory and security risks.
IBM also reduces operations after 32 years of R&D in China
Meanwhile, IBM has officially closed its research and development division in China, after more than three decades of activity. According to the economic outlet YiCai Global, the company justified the decision as part of a global restructuring aimed at efficiency and resource concentration.
Although the firm retains its subsidiary IBM (China) Company Limited for business operations, the closure of its R&D centers—which included the elimination of about 1,600 jobs in 2024—marks a turning point in its strategy. IBM has indicated that it will continue to focus on consulting, hybrid cloud, and artificial intelligence services, though with a less dependent approach on its physical presence in China.
This withdrawal is compounded by news of global cuts at IBM that could affect 9,000 employees, with offshoring moves to India, according to reports by The Register.
An ongoing technological deglobalization
These moves cannot be interpreted as isolated cases. For years, the tech sector has been undergoing a process of geopolitical fragmentation, centered around control over artificial intelligence, cloud computing, and semiconductors as focal points of friction.
As the U.S. imposes sanctions, export controls, and restrictions on access to advanced chips from China, the Asian nation is doubling down on its push for technological self-sufficiency and the replacement of foreign technology with domestic developments.
Companies like Microsoft and IBM, with a strong Western base, are increasingly pressured to decide between maintaining a presence in China or aligning with the regulatory guidelines of the U.S. and the EU.
What does this mean for the industry?
For the global tech ecosystem, this trend represents a shift towards more regionalized innovation environments, with less interoperability and more duplication of efforts. It also implies that traditional R&D hubs may migrate to emerging markets or strategic allies, such as India, Vietnam, or Eastern Europe.
In the short term, this transition could slow the development of global standards and raise the costs of production and technological integration. In the long term, it could completely redefine technological leadership on a global scale.
Source: AI News