Microsoft is selling OpenAI's AI models to major Chinese tech firms including ByteDance, generating over $1 billion（約1600億円） annually despite U.S.–China tech tensions and competing concerns from other AI companies.

What happened: Microsoft has built a significant business supplying OpenAI's AI models to Chinese companies via its Azure cloud service. ByteDance, the largest customer, is on track to spend more than $1 billion（約1600億円） a year on Microsoft AI and cloud services, while other firms such as Ant Group, Meituan, and Tencent are also major spenders. During an internal sales meeting in July 2025, Microsoft's then-Chief Commercial Officer noted that Azure's AI revenue was growing faster in China than in any other sales territory—roughly tripling in the fiscal year ended June 2025 and surging 400% the previous year.

Why it matters: Microsoft is pursuing a distinctive strategy in a geopolitical flashpoint. Competitors Anthropic and OpenAI do not sell their models to Chinese companies, citing concerns about intellectual property theft and harmful uses. Microsoft, however, has leveraged its unique partnership with OpenAI to set its own policies and serve the Chinese market. The company views its China presence as valuable for staying current with local innovation and serving multinational customers, even though the China business accounted for only about 1.5% of overall revenue in 2024.

What to watch: The durability of this arrangement remains unclear given broader U.S.–China technology rivalry and the political controversy surrounding the sales. ByteDance, Meituan, and Tencent use the models in part to support expansion outside China, according to people familiar with their businesses, though the exact uses of the models remain opaque.