Microsoft scales back China operations, leveraging Chinese enterprises' demand for overseas expansion to maintain its market window.

TechFlow, August 14: According to Reuters, Microsoft has closed at least 15 branches and joint ventures in China over the past five years and considered exiting the Chinese market in 2023, but currently has no plans to exit. Due to Sino-US geopolitical tensions, China's push for domestic software substitution, and US export restrictions on advanced technology, Microsoft's expansion in government, cloud computing, and artificial intelligence businesses in China has been hindered.

However, Microsoft has created new profitable businesses by providing Azure cloud services and access to overseas artificial intelligence models to Chinese enterprises going global, such as ByteDance and SHEIN. Meanwhile, Microsoft still hopes to retain Chinese engineering talent, but impacted by export controls and talent outflow, it has expanded its research presence in Vancouver, Singapore, Tokyo, and other locations.