Sunday, June 18, 2023

"Microsoft helped build AI in China. Chinese AI helped build Microsoft." (MSFT)

Microsoft R&D in China is a huge effort. So big that MSFT has become a bit nervous about the exposure to the diktats of The Party and Government. So they are moving big chunks of the operation to Canada.

But, before we get to that, here's some background from the sadly departed Protocol, November 2, 2022:

As “AI race” rhetoric reinforces fear of the U.S. losing dominance on the world stage, Microsoft could face hard decisions surrounding the robust AI ecosystem it helped build in China.

Through decades of support, Microsoft was an instrumental force helping China become the AI powerhouse it is today.

Now, as the very thought of a U.S. company partnering in tech projects in China draws scrutiny from lawmakers, national security hawks, and human rights advocates, Microsoft could be forced to grapple with tough decisions surrounding the thriving AI ecosystem it fostered there.

Microsoft established its research lab in Beijing in 1998, when it was a pioneer paving the way for AI research and business collaborations between the U.S. and China. It was three years before China joined the World Trade Organization, a time when President Bill Clinton actively pushed for closer trade ties with the country, and when AI was mostly the stuff of sci-fi pipe dreams.

Since then, Microsoft Research Asia, or MSRA, has been known as one of the most influential hubs of AI research in the world, advancing speech recognition, natural language and image processing, and other deep-learning work, spreading its discoveries far and wide.

Elements of research conducted at MSR China have been used to build Microsoft’s advertising, chatbots, Bing search, Windows, Xbox, Azure Cloud, and other products used everywhere. People who honed their skills at MSRA have moved on to help create and grow some of China’s best-known tech firms driving AI in the country and across the globe, including Alibaba, Baidu, and Tencent, as well as more controversial AI providers, including facial-recognition company Megvii.

“Basically you can argue that Microsoft Research Asia was the sort of seed capital from which a lot of Chinese AI companies and researchers and the sector really developed,” said Paul Triolo, senior vice president focused on China at global strategic consultancy Albright Stonebridge Group. “It’s proven to be a catalyst for the industry."

Microsoft’s storied lab in Beijing has helped the company cultivate AI talent and better understand China’s massive market. In 2018, Microsoft said it had invested more than $1 billion in research and development in China over the previous decade.

Basically you can argue that Microsoft Research Asia was the sort of seed capital from which a lot of Chinese AI companies and researchers and the sector really developed.

There are more than 300 scientists and engineers working at its MSRA labs in Beijing and Shanghai, but Microsoft has a much larger research and development group consisting of 6,000 scientists and engineers in Beijing, Shanghai, Shenzhen, and Suzhou as well as in Taiwan and Japan. That group, which includes a team focused on Cloud and AI technologies, helps transform research from MSRA into Microsoft products and services.

To help it get there, Microsoft has nurtured close ties with universities as well as state and local governments in the country.

Before the Trump administration launched its China initiative in 2018, “MSRA’s China government links would have been viewed as a major positive,” Triolo said.

But now the “D-word” is on many lips: decoupling. “Fast forward to the current situation, and being favored by the Chinese government is clearly viewed in Washington as a major negative,” Triolo said. “But the links are pretty deep and complex, and cannot be unraveled that easily, nor is there a strong desire on either side to break these ties.”

Still, Microsoft has made some changes. When the U.S. Treasury Department included China’s drone tech giant DJI on a list of sanctioned companies in December 2021, Microsoft ended a partnership with the company, which has been previously unreported. It has also been rumored that Microsoft has stopped recruiting from some Chinese universities.

Diversity of thought
When Microsoft opened an AI Innovation Center in Shanghai in conjunction with the Xuhui District government and a state-owned enterprise group there in 2018, the mayor of the district, Fang Shizhong, praised other “successful” collaborations with Microsoft, such as a startup accelerator program called Microsoft ScaleUp Shanghai.

The center would “further expand the depth and breadth of cooperation between Microsoft and Xuhui District, and will play an active role in bringing together talents, accelerating development, and leading innovation,” he said.

MSRA researchers have also assisted local Chinese companies on projects. In 2017, Xianyuan Zhan, a former MSRA associate researcher who got his Ph.D. from Indiana’s Purdue University, helped energy company China Energy Group use AI to make production at its coal-fired power plants more efficient.

“There was a senior leader from the China Energy Group who reached [out] to my manager at MSRA,” Zhan, now a research assistant professor at Tsinghua University’s Institute for AI Industry Research in China, told Protocol via video call from Beijing.

“The person from the China Energy Group said, ‘We have a complex problem. Maybe AI can help,’” Zhan said....