According to an exclusive Bloomberg report on June 17 citing multiple people familiar with the matter, Microsoft has built a substantial AI business in China, with ByteDance as its largest AI customer both in China and globally. ByteDance primarily accesses OpenAI models through Azure, and is projected to spend over $1 billion annually on Microsoft’s AI and cloud services. The report notes that against the backdrop of intensifying U.S.-China AI competition, Microsoft continues to expand its commercial presence in the Chinese market through its exclusive agreement to resell OpenAI model APIs (under their agreement, Microsoft holds exclusive sales rights for OpenAI’s Azure API until OpenAI declares the achievement of AGI). Despite having its own domestic large models such as Doubao, ByteDance still heavily procures OpenAI models for its products and R&D work.
This business landscape is particularly sensitive under the current policy environment: the U.S. government has recently imposed export controls on Anthropic’s Fable/Mythos models and has placed or is considering placing multiple companies, including Chinese AI firms, on its entity list. Yet Microsoft’s practice of providing OpenAI models to Chinese customers through its own licensing architecture remains within the compliance channel for now. Microsoft’s AI revenue in China highlights a paradoxical situation: while Washington pushes to restrict AI technology to China, top Chinese tech companies still rely heavily on cutting-edge U.S. models to run their business operations — and the compliance boundary of this channel is steadily narrowing as export control policies evolve.