There are other signs of a retreat. In 2024, Microsoft closed all of its authorized Chinese retail stores and began selling its products via third-party and online partners. It’s also been reducing its Chinese headcount. According to 24/7 Wall St., “Around June 2026, Microsoft cut an estimated 200 to 400 Azure cloud jobs in China, its third downsizing round in two years.”
How did Microsoft get here?
This didn’t happen all at once. It’s been a long, gradual process, the result of geopolitical tensions between the US and China and the worsening business climate between the two countries.
Microsoft began engaging with China more than 30 years ago, in 1994 when Gates first visited the country. After that the company “made various efforts to build a relationship with the ruling Communist Party,” Reuters reported, including co-investments in startup incubators.
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