Microsoft is quietly scaling back in China, shuttering 15 offices and joint ventures over five years as geopolitical risks outweighed slim financial returns—just 1.5% of global revenue. Though they nearly exited in 2023, they stayed to serve profitable clients like ByteDance and tap into China’s elite engineering talent. With deep roots dating to the 90s, Microsoft navigated government distrust and surveillance concerns, even launching a government-specific Windows 10 edition that flopped. Now, their strategy pivots to empowering Chinese firms to go global via Azure and Western AI tools—despite rising domestic AI competition and U.S. export restrictions that’ve forced talent relocation.
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