McKinsey has stopped its China business from undertaking consultancy work related to generative artificial intelligence amid geopolitical tensions, excluding it from one of the most potentially lucrative markets for consultants in the country. The US firm instructed its mainland Chinese operation to refrain from projects deploying generative AI in recent months, according to two people with knowledge of the matter. One of the people said the move was prompted by Washington’s growing scrutiny of US companies operating in sensitive sectors such as AI and quantum computing in China. The ban extends to projects in the mainland offices of multinational clients, but does not stop McKinsey’s China business from working with companies that have more established forms of AI in their products. One person with knowledge of the matter said the policy could constrain McKinsey’s ability to secure new business, given the central role generative AI now plays in corporate strategy and IT systems through products such as chatbots. McKinsey has previously come under fire from US lawmakers for working with Chinese state-owned enterprises and local governments while also holding contracts with the US defence department. Bob Sternfels, McKinsey’s global managing partner, was questioned by Congress last year over the consulting firm’s alleged ties to the Chinese government.

Full report : McKinsey bars China practice from generative AI work amid geopolitical tensions.