Microsoft has announced it will no longer allow engineers based in China to support U.S. defense clients using its Azure cloud services. The decision follows an investigation that raised serious national security concerns over Chinese nationals handling Pentagon-linked systems.
According to ProPublica, Chinese-based Microsoft engineers had access to highly sensitive Defense Department systems. Oversight was managed by “digital escorts”—U.S.-based workers with security clearances but minimal technical expertise. These escorts, often ex-military personnel, were charged with monitoring highly skilled Chinese engineers, raising concerns about effective supervision and the risk of espionage.
Microsoft’s Chief Communications Officer Frank Shaw said the company “made changes to our support for US Government customers to assure that no China-based engineering teams are providing technical assistance for DoD Government cloud and related services.” The change primarily impacts Microsoft’s Azure division, a major component of its cloud revenue stream.
Defense Secretary Pete Hegseth labeled the arrangement “obviously unacceptable,” describing it as a legacy of Obama-era systems not suited to today’s cybersecurity environment. The issue highlights ongoing vulnerabilities in federal contractor protocols and the potential for foreign adversaries to gain insight into U.S. defense systems.
Microsoft initially defended the setup but has since revised its practices in response to the growing criticism. The company emphasized its commitment to security, stating it will continue working with national security partners to tighten its cloud support protocols.
The Department of Defense is also launching a broader review of its systems to identify similar risks and ensure foreign nationals are not involved in sensitive military projects.
