U.S. tech giant Microsoft on Wednesday signed a memorandum of strategic cooperation to locate its new artificial intelligence (AI) and Internet of Things (IoT) Insider Lab, the first of its kind in Asian-Pacific Region, in Shanghai.

The memorandum was signed between the company and Shanghai's Pudong New Area. The lab is expected to open in April.

It will be Microsoft's third and largest AI & IoT Insider Lab in the world, after the company set up the first two in Seattle and Munich.

The lab is set to enhance deep integration of AI and IoT, and help digital transformation across industries including manufacturing, retail, healthcare, and the public sector.

"China has the world's largest IoT market. The AI and IoT industry has great potential in China," said Roan Kang, vice president of Microsoft China, adding that Microsoft would provide the most comprehensive AI and IoT platform, products and solutions.

The lab will work with local enterprises and multinational companies to build prototypes through production, conduct technical training, provide go to market advisory, and deployment and scalability guidance, the company said.

Pudong has seen great development of AI industry in recent years, with more than 100 AI-related enterprises and organization settled in the area.

The Microsoft lab will be located on the "AIsland" of Zhangjiang Science City in Pudong.