Microsoft launches incubator for Chinese tech startups — reigniting fears about cozy Beijing ties: Makes no sense | Latest Tech News
Microsoft is quietly serving to launch an incubator to enhance Chinese startups with cutting-edge AI – and the weird project is reigniting fears in Washington that the tech giant is getting too cozy with Beijing, The Post has realized.
Last month, local Chinese Communist Party officers stood alongside Microsoft executives when the “Shenzhen Global Expansion Center” was unveiled, touting it as a “one-stop platform for international business expansion.”
The software program giant co-founded by Bill Gates will present local corporations with its “AI technologies, platform capabilities, and access to its global ecosystem network,” according to a May 8 press release.
Microsoft is going through renewed scrutiny over its ties to China. REUTERS
US lawmakers have grown more and more involved about Microsoft’s decades-long presence in China, where it has two major AI labs and more than 10,000 staff – all of whom stay under close watch by the CCP.
Aside from its function as the biggest software program supplier to the US authorities, Microsoft, led by CEO Satya Nadella, is a key participant in the winner-takes-all race to develop superior AI.
A spokesperson for the Republican-led House Select Committee on China, which held a listening to on April 16 on “China’s Campaign to Steal America’s AI Edge,” told The Post that “Microsoft should seriously reconsider the wisdom of helping China’s AI technology efforts.”
Lawmakers are involved “particularly given the dangers for American national security, and the company’s recent failures outsourcing defense work to China,” a Select Committee spokesperson told The Post.
“It makes no sense that some of the American companies most ruthlessly mistreated by the CCP persist in pursuing futile partnerships in China,” the spokesperson added.
The little-noticed project also may put Microsoft at odds with the Trump administration. Last 12 months, the White House blasted the company for permitting China-based software program engineers to preserve Pentagon pc systems and warned as just lately as April that China was engaged in “industrial-scale” efforts to rip off AI technology.
Microsoft CEO Satya Nadella enters a U.S. federal courthouse as the trial in Elon Musk’s lawsuit over OpenAI’s for-profit conversion continues, in Oakland, California, US, May 11, 2026. REUTERS
Chinese hackers have repeatedly exploited Microsoft systems – most notably in a brazen marketing campaign concentrating on the emails of then-Commerce Secretary Gina Raimondo in 2023. Last August, War Secretary Pete Hegseth ordered an end to Microsoft’s use of so-called “digital escorts” in China to oversee the Pentagon’s cloud-computing networks, citing spying dangers.
Microsoft declined to remark particularly on a detailed checklist of questions — including a request for readability on which “AI technologies” have been being supplied to startups. Instead, a company spokesperson downplayed the project, calling it “a marketing and advertising training initiative and not a research or development center.”
“We do not operate the center directly and it does not conduct AI research, develop technology, or receive government funding,” a Microsoft spokesperson insisted in a assertion.
President Donald Trump speaks with Chinese President Xi Jinping while leaving after a go to to Zhongnanhai Garden on May 15, 2026 in Beijing, China. Getty Images
Microsoft launched the enlargement middle in collaboration with the Chinese promoting tech firm Eclicktech and with help from the “Shenzhen and Luohu district governments,” according to the release.
The May 8 launch event featured appearances by Qi Zhang, the pinnacle of Microsoft AI Asia, and Zhu Lin, chief of workers at Microsoft AI Asia Pacific. The middle is “focused on supporting emerging industries including digital economy, artificial intelligence, smart hardware, fashion and design, healthcare, and advanced services.”
By opening the middle, Microsoft “appears to be aligning itself with a longstanding CCP priority, which is the globalization of high-tech Chinese companies,” according to Isaac Stone Fish, a China professional and CEO of Strategy Risks.
An govt speaks at the launch event for the Microsoft-backed Shenzhen Global Expansion Center. eclicktech/PR Newswire
“I can’t speak for why Microsoft made this decision,” Fish said. “I can say that companies like Microsoft that publicly align themselves with the Chinese Communist Party in China face increased regulatory and public relations scrutiny for those moves in the United States. What happens in China doesn’t stay in China.”
Microsoft has long downplayed national security issues associated to its work in China, with company president Brad Smith even going as far as to counsel in a June 2024 congressional listening to that the company was in some way exempt from China’s 2017 law requiring firms to cooperate with the CCP’s intelligence providers.
The company insists that it maintains guardrails around delicate research in China, such as facial recognition and quantum computing. Microsoft has acknowledged it permits China to examine source code, but claims it does so within a managed surroundings “where the code cannot be recorded or extracted.”
Rep. John Moolenaar, R-Mich, is chairman of the House Select Committee on China. CQ-Roll Call, Inc via Getty Images
Regardless, Microsoft Research Asia, as its local business is thought, has turn into a major expertise hub for Chinese startups that are in direct competitors with the US tech industry. As The Post solely reported last 12 months, a number of key members of Chinese AI firm DeepSeek’s staff acquired their start as longtime “interns” at Microsoft’s AI labs.
“At a time when Washington is focused on America ‘winning the AI race,’ one of our iconic frontier AI developers is apparently working to help Chinese startups gain overseas market share, including by granting them access to cutting-edge American technology,” said Evan Swarztrauber, a former FCC coverage adviser and principal at CorePoint Strategies.
“It demonstrates a complete disconnect between Microsoft’s policy advocacy in Washington, which is wrapped in the American flag, and its actions that prioritize market access in China and its relationship with a US adversary,” Swarztrauber added.
Microsoft Research Asia has labs in Beijing and Shanghai. VCG via Getty Images
Microsoft has “played both sides for decades” to shield its income in the area – and those efforts are now backfiring on Americans, according to Joe Grogan, who served a stint as director of the US Domestic Policy Council during Trump’s first time period in workplace.
“They handed Beijing their source code, let Chinese engineers maintain Defense Department computer systems, and planted their largest R&D center outside the U.S. on Chinese soil,” Grogan said. “Now, as China bankrolls anti-AI propaganda to turn Americans against their own technological future, Microsoft is handing Beijing a competitive edge in the AI race.”
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