According to a new report, Microsoft has spent three decades building deep ties with China’s government and security apparatus while simultaneously embedding itself into nearly every corner of American federal infrastructure.
For decades, Americans viewed Microsoft as a pillar of national technology infrastructure. Its systems power everything from federal email to Pentagon cloud networks. A new report from Horizon, a geopolitical analysis firm, paints a different picture. The report, titled: “Microsoft in China: An Enduring Risk Profile and the National Security Implications,” reveals the story of a tech giant that spent thirty years cultivating deep ties with the Chinese Communist Party and its vast security apparatus, all while embedding itself into nearly every corner of the United States government.
The reckoning began earlier this year, when ProPublica exposed Microsoft’s quiet reliance on China-based workers to support sensitive Department of War cloud systems. These workers, described internally as “digital escorts,” were allowed to assist with troubleshooting and maintenance for U.S. military networks. Pentagon officials publicly labeled the practice a breach of trust. Microsoft insisted the offshore support was only for after-hours tasks and claimed no customer data was directly accessible.
The tech giant’s ties to China stem from longstanding corporate strategy. In 2003, the company granted the China Information Technology Security Evaluation Center access to the source code of Windows and Office. The organization was later identified as operating under China’s Ministry of State Security, which is responsible for Beijing’s foreign intelligence operations. For years, Chinese authorities were allowed to study the inner workings of the software that underpins American government agencies, critical industries, and private infrastructure.
According to the Horizon report, security researchers have since linked at least one major zero-day exploit directly to the visibility China gained through these arrangements. Others are suspected to have benefited from the same access. The result is a pattern in which Chinese state-backed cyber units repeatedly compromised Microsoft products used throughout the U.S. government, often through vulnerabilities that Beijing may have identified earlier than Microsoft itself.
These ties did not stop at source code. In 2015, Microsoft entered a joint venture with China Electronics Technology Group, a large state-owned defense conglomerate responsible for supplying key components of China’s modern military and intelligence capabilities. The joint venture was tasked with developing a customized version of Windows for government use inside China. The move gave the Chinese state a guiding role in shaping the development and deployment of a Windows system specifically modified to its standards.
Microsoft’s cloud operations in China created yet another gateway for exposure. Because Chinese law requires foreign cloud services to be operated by a local company, Microsoft’s Azure system inside China is run entirely by 21Vianet, a Chinese firm legally obligated to cooperate with state security authorities. That means China’s government has the power to intervene in operations, review infrastructure, and demand compliance. The 21Vianet operated system was connected to the same Azure credentialing platform implicated in the 2023 cyberattack that breached the email accounts of senior U.S. officials.
Microsoft’s commercial decisions have also strengthened China’s surveillance state. Chinese companies continue to access OpenAI models through Microsoft’s Azure platform, even after OpenAI restricted direct use from inside China. Among the beneficiaries is Beyondsoft, a company that serves as a major contractor in China’s censorship operations. Another is INESA, a state-owned enterprise involved in security, monitoring, and smart policing technologies. Through Microsoft’s infrastructure, both gained access to advanced generative AI systems. That access has been incorporated into products that support content policing, surveillance, and state-directed information control inside China.
The company’s HoloLens mixed reality technology has also found its way into China’s defense ecosystem. State media aired footage of a People’s Liberation Army Air Force technician using a HoloLens-like system to conduct aircraft maintenance. Microsoft also partnered with G42, an Abu Dhabi based firm with close ties to China, in AI and VR development.
Microsoft’s research arm in Beijing, Microsoft Research Asia, has long been celebrated as a cradle of China’s artificial intelligence talent. Yet it has also coauthored research in sensitive fields, including facial recognition and synthetic media, with universities sanctioned by the U.S. government for their direct connections to China’s military. These collaborations continued even as Microsoft publicly claimed to have imposed limits on the kinds of research MSRA could conduct. The laboratory remains active and continues to recruit for work on large language models, computer vision, and other strategically sensitive fields inside China’s borders.
According to Horizon’s report, these patterns reveal a vulnerability built not through espionage alone but through years of corporate decisions that tied America’s most widespread software ecosystem to a hostile foreign power.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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