Amazon (AMZN) is closing its Shanghai artificial intelligence (AI) research lab, marking another major U.S. tech retreat from China amid escalating geopolitical tensions between the two nations. The news was first reported by the Financial Times, citing people familiar with the matter.
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Amazon’s shutdown follows similar exits by U.S. tech giants, including IBM (IBM) and Microsoft (MSFT), in recent years amid increasing scrutiny of China-related AI work. Notably, IBM closed its China R&D center in 2024 after 32 years and laid off about 1,800 employees, while Microsoft is relocating hundreds of Chinese AI staff amid tightening U.S.-China tech restrictions.
Here’s More About Amazon’s Shanghai Lab
Amazon’s Shanghai lab was established by Amazon Web Services (AWS) in 2018 and was responsible for developing significant AI innovations, including an open-source framework for graph neural networks that contributed nearly $1 billion to Amazon’s e-commerce revenue. The lab also published over 100 academic papers and was recognized for its high-impact research achievements.
Scientist Wang Minjie confirmed the lab’s shutdown on his WeChat account, citing “strategic adjustments amid U.S.-China tensions.” Amazon spokesperson Brad Glasser stated that AWS is implementing global job cuts as part of resource optimization efforts. “These decisions are necessary as we continue to invest, hire, and optimize resources,” he added.
Amazon once had over 1,000 employees in China, with its AWS team focusing on serving multinational and Chinese tech firms. However, the U.S. administration’s stringent export controls on advanced chips and cloud services have made it increasingly difficult for China-based AI researchers to work in partnership with the global AI community.
Previously, Amazon exited China’s eBook market in 2023 and scaled back e-commerce operations due to local competition. The exits by major tech giants reflect a broader trend of Western companies reducing their presence in China in response to geopolitical and regulatory pressures, while shifting focus toward AI-driven efficiency worldwide.
Is Amazon Stock a Buy, Hold, or Sell?
Analysts remain highly optimistic about Amazon’s long-term outlook. On TipRanks, AMZN stock has a Strong Buy consensus rating based on 43 Buys and one Hold rating. Also, the average Amazon price target of $256.90 implies 12.9% upside potential from current levels. Year-to-date, AMZN stock has gained 3.7%.
