Microsoft has closed its IoT & AI Insider Lab in Shanghai’s Zhangjiang hi-tech zone, marking a significant reduction in the company’s operations in China.

The lab, which focused on developing IoT and AI technologies, ceased operations earlier this year, according to local sources.

Opened in May 2019, the lab aimed to foster collaboration between Microsoft and Zhangjiang, a key innovation hub in Shanghai’s Pudong district.

Over its five years of operation, it supported 258 projects involving nearly 100 companies and trained close to 10,000 professionals, according to official data.

By June 2024, more than 50 enterprises supported by the lab had attracted over 9.4 billion yuan (around US$1.3 billion) in external investments.

However, the facility has remained closed since January or February of this year, with its logo removed and office equipment cleared out.

Microsoft has not commented on the closure. This development is part of the company’s broader pullback from the Chinese market amid rising geopolitical tensions.

Last year, Microsoft offered relocation options to hundreds of AI staff in China and conducted significant layoffs. Additionally, it closed all its brick-and-mortar stores on the mainland.

Despite its long presence in China, Microsoft’s revenue from the market accounts for only 1.5% of its global earnings, according to testimony from company president Brad Smith during a congressional hearing in 2024.

Following this closure, Microsoft continues to operate its IoT & AI Insider Labs in the United States, Germany, Uruguay, and Japan.

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