Microsoft expands AI model business in China amid OpenAI, Anthropic concerns

While OpenAI and Anthropic have largely stayed out of China over fears of intellectual property theft and model misuse, Microsoft has been quietly building a massive AI business there. Microsoft sells access to OpenAI’s GPT series and other advanced models through its Azure cloud platform to Chinese firms, effectively acting as the middleman in a market that OpenAI itself won’t touch directly.

ByteDance leads a growing client roster

ByteDance, the parent company of TikTok, has become Microsoft’s largest Chinese customer and is projected to spend over $1 billion annually on AI and cloud services through Azure.

ByteDance isn’t alone. Ant Group, Meituan, and Tencent are also contributing to Azure’s growth in the region.

Azure’s AI revenue in China tripled during the fiscal year that ended in June 2025. The year before that, it grew 400%. Microsoft’s overall revenue from China still represented approximately 1.5% of its total revenue in 2024.