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Microsoft is deepening its presence in China’s artificial intelligence market, with major technology firms turning to Azure for cloud infrastructure and AI services., according to a Bloomberg report.

Several of China’s leading digital platforms, including ByteDance, Ant Group, Meituan and Tencent Holdings, are among the largest users of Microsoft’s AI services. ByteDance, the parent company of TikTok, has emerged as one of Microsoft’s biggest AI customers and is reportedly on track to spend more than $1 billion annually on Microsoft’s cloud and artificial intelligence offerings.

The growth highlights Microsoft’s unique position in the Chinese market, where access to advanced AI models remains subject to regulatory, geopolitical and national security considerations. While companies such as OpenAI and Anthropic do not directly offer their models in China, Microsoft continues to provide AI capabilities through Azure under the framework of its partnership with OpenAI.

According to the report, former Microsoft Chief Commercial Officer Judson Althoff told employees in 2025 that Azure AI revenue in China had tripled during the previous fiscal year after increasing 400% the year before, underscoring strong demand for enterprise AI services among Chinese technology firms.

Microsoft President Brad Smith previously told U.S. lawmakers that China accounted for approximately 1.5% of the company’s total revenue in 2024. A significant portion of spending by Chinese customers is reportedly tied to supporting international operations and global expansion efforts rather than domestic business activities.

The expansion of Microsoft’s AI business in China comes as demand for cloud-based artificial intelligence services continues to grow worldwide, driven by increased enterprise adoption of generative AI technologies.

Microsoft’s activities in China have attracted attention from policymakers and industry observers as governments increasingly scrutinize the development and deployment of artificial intelligence technologies, particularly those involving cross-border access to advanced AI models and cloud infrastructure.