McKinsey & Company has instructed its mainland China operations to avoid projects involving genAI, according to a report citing two people with knowledge of the matter.

This decision follows increased scrutiny by the US government regarding American companies in sensitive sectors such as AI and quantum computing in China.

The restriction extends to projects undertaken in the offices of multinational clients. However, McKinsey’s operations in China can still engage in projects related to more established forms of AI.

A spokesperson for McKinsey said that the company has enhanced its client service policies in China, focusing on multinational and Chinese private sector firms.

The firm employs over 1,000 staff members across six regions in China, according to its website.

This development occurs amid rising US-China tensions, with Beijing implementing exit bans on some US citizens.

Additionally, US lawmakers have previously investigated McKinsey’s undisclosed work with the Chinese government.

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