Microsoft closes 15 offices in China but has not withdrawn

GeopoliticsProduct / Tech
โดย Money & Banking·USCN·Read original
Summary · why it matters

Microsoft is steadily reducing its role in China, having closed at least 15 branch offices and joint ventures in the country over the past five years amid tensions between Washington and Beijing and Chinese government policies promoting domestic software. Although some executives considered withdrawing from the Chinese market in 2023 because geopolitical risks were too high relative to business returns, Microsoft currently has no plans to exit, after discovering new business channels that can still generate profit. In particular, it provides technology services to Chinese companies expanding overseas, such as ByteDance and Shein, which need global technology infrastructure to manage data and comply with regulations in each country. Microsoft can therefore sell Azure Cloud services to these companies to support their operations outside China, and give Chinese enterprise customers access to AI models from Western companies through Azure, such as models from OpenAI, which are not offered directly in China. Although China generated only about 1.5 percent of Microsoft's global revenue in 2024, the business of serving Chinese companies expanding abroad became Microsoft's largest China-related business in the mid-2020s. At the same time, Microsoft still wants to maintain a base in China to access world-class engineering and technology talent. In 2024, the company offered about 1,000 senior engineers the chance to relocate to the United States and three other Western countries, but only about one-third accepted the offer.

Impact on stocks 1

Artificial Intelligence▲ · 1 stocks
Microsoft Corporation
MSFT
± MixedGeopoliticsrelevance

Closes offices in China due to tensions, but finds new business channels; overall impact mixed.

Theme Impact 2

Off-coverage companies 3

ByteDancePrivate▲ Positive
Demandrelevance

Microsoft provides tech services to ByteDance for overseas expansion, indicating demand.

Shein Group LimitedPrivate▲ Positive
Demandrelevance

Microsoft provides tech services to Shein for overseas expansion, indicating demand.

OpenAIPrivate± Mixed
relevance

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