Microsoft Chairman and CEO Satya Nadella (L) will return to stage after a pre-recorded interview during the opening keynote speech of the Microsoft Build Conference in Seattle, Washington on May 19, 2025.
Jason Redmond | AFP | Getty Images
Microsoft On Friday, the practice was revised to prevent Chinese engineers from using the company’s cloud services to provide technical support to US defense clients.
The company has implemented changes to its efforts to reduce national security and cybersecurity risks caused by crowdwork with key customers. The announcement comes days after Propublica released an extensive report explaining the Department of Defense’s dependence on Microsoft software engineers in China.
“In response to concerns raised about foreign engineers in the US earlier this week, Microsoft has assisted US government customers to ensure that US government customers are not providing technical assistance to DOD government cloud and related services.”
This change will affect Microsoft’s Azure Cloud Services Division work. This estimates that analysts currently generate more than 25% of the company’s revenue. It will make Azure bigger Google It’s cloud, but it’s smaller Amazon Web services. Microsoft received “significant revenue from government contracts,” according to its latest quarterly profit statement, with more than $70 billion of our first quarter revenue coming from US-based customers.
In 2019, Microsoft won a $10 billion cloud-related defense contract, but the Pentagon cancelled it in 2021 after a legal battle. In 2022, the division offered Amazon and Google cloud contracts worth up to $9 billion in total. Oracle and Microsoft.
Propublica reported that Microsoft’s China Azure engineer’s work is being overseen by US “digital escorts.” The report details how the “digital escort” arrangement will make the US vulnerable to cyberattacks from China.
“This is clearly unacceptable, especially in today’s digital threat environment,” Defense Secretary Pete Hegses said in a video posted to X on Friday. He described architecture as “a legacy system created during the Obama administration over a decade ago.” The Department of Defense will look into the system in search of similar activities, Heggs said.
Microsoft originally told Propublica that its employees and contractors are complying with U.S. government rules.
“We remain committed to providing the US government with the safest services possible, including working with our national security partners to assess and coordinate security protocols as needed,” Shaw wrote.
Watch: Microsoft Security VP Vasu Jakkal talks about cybersecurity with Jim Cramer
