Pentagon Rebukes Microsoft; China-Based Cloud Support Ends

DEVELOPING

U.S. Defense Secretary Pete Hegseth said the Pentagon has sent a formal letter of concern to Microsoft after discovering the company used Chinese nationals to service Defense Department cloud environments, calling it a “breach of trust.” In a video statement on X, Hegseth added that a third-party audit will scrutinize Microsoft’s “digital escorts” program, including relevant code and submissions tied to the practice.

The use of Chinese Nationals to service Department of Defense cloud environments is over. pic.twitter.com/jZdcHwKho2

— Secretary of Defense Pete Hegseth (@SecDef) August 27, 2025

Microsoft said in July that it ended the involvement of China-based engineers in providing technical support for U.S. military cloud systems, following an investigative report by ProPublica. The company had relied on U.S. “digital escorts” to supervise foreign specialists; the Pentagon’s review will now examine how that oversight was implemented and whether further safeguards are needed.

What’s next: The Defense Department says the independent audit will proceed immediately; further steps could follow based on its findings.