(Reuters) -McKinsey has instructed its mainland China business to steer clear of projects deploying generative artificial intelligence, the Financial Times reported on Wednesday, citing two people with knowledge of the matter.
The US-based consulting firm did not immediately respond to a request for comment outside regular business hours. Reuters could not immediately confirm the report.
The move was prompted by the US governments increasing scrutiny of US companies operating in sensitive sectors such as AI and quantum computing in China, the newspaper said.
The ban extends to projects in the offices of multinational clients, but doesn’t stop McKinsey’s China business from working with companies that have more established types of AI in their products, the report added.
The company employs over 1000 individuals in China, across six regions, according to its website.
The report comes at a time of increasing tension between Washington and Beijing, where China has imposed exit bans on some US citizens visiting the nation.
Last year, US lawmakers demanded a probe into the McKinsey’s failure to disclose its work with China’s government.
(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Mrigank Dhaniwala and Nivedita Bhattacharjee)
