Microsoft stops using Chinese tech support for this customer over national security concerns
The policy revision directly impacts Microsoft Azure, the company's cloud services division, which now accounts for over 25 per cent of Microsoft's global revenue, larger than Google Cloud but still behind Amazon Web Services. The company's most recent earnings report noted that more than half of its $70 billion in Q1 revenue was generated from US-based clients, with a substantial chunk tied to government contracts.This isn't the first time Microsoft's cloud involvement with the US military has drawn scrutiny. Back in 2019, the company secured a $10 billion cloud contract with the Pentagon, only for it to be cancelled in 2021 after legal disputes. By 2022, Microsoft was again one of the chosen vendors in a $9 billion multi-supplier defence cloud deal alongside Amazon, Google, and Oracle.The ProPublica report, which prompted the recent policy overhaul, revealed that Chinese Azure engineers were managed remotely by US-based supervisors known as 'digital escorts', individuals who reportedly had less technical knowledge than the staff they were overseeing. According to the report, this system could leave critical US defence infrastructure vulnerable to foreign interference.US Defence Secretary Pete Hegseth didn't mince words in response. 'This is obviously unacceptable, especially in today's digital threat environment,' he said in a video posted on X. Hegseth criticised the structure as 'a legacy system created over a decade ago, during the Obama administration,' and confirmed the Department of Defence would review its infrastructure for similar issues.Update on DOD's cloud services pic.twitter.com/0wCe3vmuNU— Secretary of Defense Pete Hegseth (@SecDef) July 18, 2025While Microsoft initially defended its operations, claiming that its teams followed US regulations, it has since promised to undergo further scrutiny and cooperate with national security partners. 'We remain committed to providing the most secure services possible to the US government, including working with our national security partners to evaluate and adjust our security protocols as needed,' Shaw added.The incident highlights the growing tension between global tech operations and national security expectations, a balancing act that's becoming increasingly difficult in today's high-stakes cyber environment.- Ends
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