By Barrabi
US lawmakers are warning Microsoft against cultivating cozy ties with China as it develops AI technology – even as the tech giant’s president Brad Smith has lately touted increased collaboration with the American adversary.
During a meeting with China’s Minister of Commerce Wang Wentao earlier this month, Smith reportedly said the Big Tech firm was willing to “actively participate in the digital transformation of China’s economy.”
At the summit, which centered on AI and other diplomatic issues, China said it hoped Microsoft would play a “constructive role” on AI cooperation.
Smith’s visit raised alarms among US lawmakers and other critics who worry Microsoft’s decades-long presence in China – where it has about 10,000 employees – poses a potential national security risk.
Sen. Josh Hawley (R-Mo.), who pressed Smith on whether Microsoft was “too entwined” with China during a high-profile spat at a Senate hearing on AI in September, called on Congress to break up the partnership.
“Microsoft should know better. The Chinese Communist Party wants AI supremacy so that it can degrade and defeat US capabilities, seize Taiwan, and make the world less safe,” Hawley told. “No American company should be wined and dined into thinking otherwise. And Congress should block partnerships like this.”
Rep. Mike Gallagher (R-Wis.), chairman of the House Select Committee on China, expressed similar concerns, noting that Smith’s trip occurred even as the panel called for “stronger export controls on artificial intelligence and other critical technologies.”
“Tech companies operating in China, like Microsoft, need to understand that the CCP will use AI for evil techno-totalitarian purposes,” Gallagher said in a statement. “We must be clear-eyed about the economic and national security risks involved with conducting AI research with our foremost adversary, the Chinese Communist Party.”
Concerns have intensified as Microsoft-backed OpenAI, Google and various state-affiliated Chinese firms scramble to develop advanced AI tools that could dominate the future economic and military landscape.
US-China relations lately have soured over various disputes, including American concerns about intellectual property theft and Beijing’s aggression toward Taiwan.
Smith’s warm words appeared to contradict public remarks that Microsoft CEO Satya Nadella made just a month earlier.
On Nov. 15, Nadella told CNBC that Microsoft was “mostly focused on the global market ex-China.” He tried to distance the company’s dealings from the Chinese government, noting that “a lot of the Chinese multinationals operating outside of China are our bigger AI customers.”
Nadella also alluded to the US government’s national security concerns, stating, “it’s clear that the United States has a particular set of policy decisions that they’re making on what it means to both have trade and competition and national security.”
“Mixed signals” of this sort have become more common as Microsoft tries to walk the line between keeping the US government happy and maintaining access to the massive Chinese market, according to Paul Rosenzweig, a former Homeland Security deputy assistant secretary.
“China is a huge market and mostly, their job is to make money,” Rosenzweig said. “But the last five to 10 years have seen a gradual but persistent shift in the long-term strategic relationship between the US and China. They’re continuing to try to walk a line that is increasingly untenable.”
A Microsoft spokesperson said the company has been “working for years to publicly guide how AI technologies are created and used on our platforms in responsible and ethical ways,” and that the company is among the Big Tech firms that agreed to “Voluntary AI Commitments” with the White House this summer to manage the risks of the technology.
“The AI work we do in China is not for military use, but is instead focused on accelerating scientific discovery and technology innovation for the benefit of the international academic research community. Microsoft is committed to operating in China in a way that upholds our corporate values and does not undermine U.S. national security interests,” the spokesperson added.
“Moreover, given the evolving landscape in China, it is important that we continually reevaluate our operations to ensure they are consistent with our corporate values.”
Big Tech firms such as Google and Meta have mostly retreated from the region following high-profile dustups with Beijing over platform censorship and intense scrutiny from US lawmakers.
By contrast, Microsoft has steadily expanded its operations in China since the 1990s, operates a heavily censored version of its Bing search engine in the mainland and released a modified version of its Windows operating system for the Chinese government.
Sen. Marsha Blackburn (R-Tenn.), who sits on the Senate Finance Committee, noted that US companies operating in China are “subject to strict rules, which include installing CCP officials within their organizations.”
“The American people do not want Beijing controlling our technology,” Blackburn said in a statement. “Our U.S.-based companies must know and respond appropriately to the cost of doing business in Communist China.”
Last week, eyebrow-raising footage from Chinese state television appeared to show members of China’s military using Microsoft’s HoloLens mixed-reality headset.
The company boasted in a 2018 blog post that it had spent more than $1 billion on research and development in the country over the previous decade.
Microsoft isn’t the only US tech player to face scrutiny over its China ties.
Apple CEO Tim Cook regularly faces questions over the company’s deep connection to the Chinese market, where the iPhone maker has achieved rapid growth in recent years, while Tesla CEO Elon Musk built a major production plant in Shanghai and was recently blasted by Taiwanese lawmakers for defending China’s stance toward the island nation.
“Every American company that chooses to work in China is another opportunity for the Chinese Communist Party to achieve its goal of overpowering the United States,” Sen. Marco Rubio (R-Fla.) said in a statement.
Rosenzweig noted that Microsoft’s collaboration with the Chinese government comes with a “multitude of risk factors,” such as China gaining access to proprietary information about AI products through forced technology transfer or learning about software vulnerabilities in products, like Office or Teams, that are widely used by US government agencies.
“Sharing those capabilities with the Chinese is eliminating an economic advantage for the United States and quite likely, in the midterm, eroding a national security advantage for the United States,” he said.
Microsoft operates research labs in Beijing and Shanghai that serve incubators for AI research and played an “instrumental force helping China become the AI powerhouse it is today,” according to a recent Protocol report.
The research labs were a key point of contention during Hawley’s dustup with Smith at the recent Senate hearing.
The Republican cited national security concerns related to Microsoft’s work in China, as well as evidence that the Chinese government has exploited advanced tech like facial recognition while committing human rights abuses against the Uyghur Muslims.
Smith disputed the notion that Microsoft had become a “revolving door” for China’s AI researchers and argued the company’s presence in the country provided other western companies active in China with a safe way to store their data.
“We are and need to have very specific controls on who uses our technology and for what and how,” Smith said at the time. “That’s why we don’t, for example, do work on quantum computing or we don’t provide facial recognition services or focus on synthetic media.”
