Microsoft stops relying on Chinese engineers for Pentagon cloud support

Core Viewpoint - Microsoft has revised its practices to prevent engineers in China from providing technical support to U.S. defense clients, aiming to mitigate national security and cybersecurity risks associated with its cloud services [1][2][3]. Group 1: Changes in Practices - The changes were implemented following concerns about U.S.-supervised foreign engineers and their potential impact on national security [2][3]. - Microsoft’s chief communications officer stated that no China-based engineering teams will assist U.S. Government customers for Department of Defense (DoD) cloud services [3]. Group 2: Impact on Azure Division - The change affects Microsoft's Azure cloud services division, which is estimated to generate over 25% of the company's revenue, making it larger than Google Cloud but smaller than Amazon Web Services [4]. - More than half of Microsoft's $70 billion in first-quarter revenue came from U.S.-based customers, indicating substantial reliance on government contracts [4]. Group 3: Historical Context - In 2019, Microsoft secured a $10 billion cloud-related defense contract, which was later canceled by the Pentagon in 2021 after legal disputes [5]. - In 2022, the Pentagon awarded cloud contracts totaling up to $9 billion to Microsoft and other major tech companies [5]. Group 4: Cybersecurity Concerns - A report indicated that Microsoft's Chinese Azure engineers were overseen by "digital escorts" in the U.S., raising concerns about potential vulnerabilities to cyberattacks from China [6]. - Microsoft initially claimed that its operations adhered to U.S. government regulations, despite the reported oversight issues [6]. Group 5: Commitment to Security - Microsoft remains committed to providing secure services to the U.S. government and is working with national security partners to evaluate and adjust security protocols as necessary [7].