Microsoft has announced a major policy change by cutting technical assistance from its China-based engineering teams using its cloud services. The step came only a few days after an explosive Propublica investigation, how the US Department of Defense (DOD) depended on the Microsoft Software Engineers located in China, a situation that gave rise to concerns over national security and cyber weaknesses.

In a statement posted to X on Friday, Frank Shaw, Microsoft Chief Communications Officer, confirmed the change: “In response to the concerns raised earlier this week about American-Parliamentary Engineers, Microsoft has changed our support to the US government customers that no China-based engineering teams are providing technical assistance for the DOD government’s cloud and related services.”

The policy modification directly affects the Microsoft Azure, the company’s cloud services division, now more than 25 percent of the global revenue of Microsoft, larger than the Google Cloud, but still behind the Amazon web services. The company’s most recent earnings report said that more than half of its $ 70 billion-based customers in the Q1 revenue, which tied sufficient share for government contracts.

This is not the first time Microsoft’s cloud partnership with the US Army has investigated. Back in 2019, the company achieved a $ 10 billion cloud contract with the Pentagon, canceled only in 2021 following legal disputes. By 2022, Microsoft was again one of the sellers selected in a $ 9 billion multi-compete Defense Cloud Deal with Amazon, Google and Oracle.

The Propublica Report, which recently inspired the policy overhaul, revealed that Chinese Azure Engineers were known by the US-based supervisors as “digital escorts”, the individuals who were reportedly had less technical knowledge than the employees they were looking after. According to the report, this system may leave the important US defense infrastructure to be unsafe for foreign intervention.

US Defense Secretary Pete Hegseth did not copy the words in response. “This is clearly unacceptable, especially in today’s digital danger environment,” he X. A video posted on Hegseth stated that “a Heritage System created a decade ago during the Obama administration” criticized the structure, and confirmed that the Defense Department would review its infrastructure for similar issues.

While Microsoft initially defended his operations, claiming that his teams follow the US rules, he has since promised to undergo further investigation and cooperate with the national security partners. Shaw said, “We are committed to providing the safest services to the US government, in which our national security partners to work with partners and evaluate and accommodate our safety protocols as needed,” Shaw said.

The incident highlights the increasing stress between global technical operations and national security expectations, a balance act that is becoming increasingly difficult in the high-day cyber environment today.