Microsoft Corp (NASDAQ:MSFT) is expanding its artificial intelligence business in China, with ByteDance expected to spend more than $1 billion annually on the company’s AI and cloud services, according to a Bloomberg report.
Bloomberg reported that Microsoft has become a key provider of OpenAI models in China, offering access to the GPT series through its Azure platform while OpenAI and Anthropic have largely kept their own services out of the Chinese market because of concerns over intellectual property protection and potential misuse.
People familiar with the matter told Bloomberg that ByteDance, the parent company of TikTok, has been Microsoft’s largest AI customer in recent years and is on track to exceed $1 billion in annual spending on Azure and AI-related services.
Other Chinese companies, including Ant Group, Meituan and Tencent, also purchase AI models through Azure, according to the report.
Bloomberg cited a transcript from a July 2025 internal sales meeting in which then-Chief Commercial Officer Judson Althoff told employees that Azure AI revenue in China had roughly tripled in the fiscal year ended June 2025, following growth of about 400% the previous year.
Althoff reportedly described Microsoft as the company “bringing those two places together,” referring to AI ecosystems in the United States and China.
Microsoft president Brad Smith previously told US lawmakers that China represented about 1.5% of the company’s revenue in 2024, Bloomberg reported.
Microsoft has not publicly commented on the report.
The company’s shares traded about 1% lower at $375 on Thursday, down more than 22% in the year to date.
