AsianFin -- McKinsey has directed its mainland China operations to avoid any involvement in projects related to generative artificial intelligence, the Financial Times reported Wednesday, citing sources familiar with the matter.

The decision comes as the U.S. government ramps up scrutiny of American firms operating in sensitive technology sectors in China, including AI and quantum computing, the report said.

The restriction also applies to generative AI work conducted at the China offices of multinational clients. However, it does not prevent McKinsey’s China unit from engaging with companies using more traditional forms of artificial intelligence, according to the report.

A McKinsey spokesperson said in an emailed statement that the firm further tightened its client service policies in China last year, with a continued focus on serving multinational and private sector Chinese firms.