Flashback: Op-Ed Exposes Microsoft’s Role in Advancing China’s AI Surveillance State

“For years, Tim Cook insisted Apple could change China from the inside. Instead, China changed Apple.” This is the cautionary tale explained in a new op-ed from TIP Policy Director Geoffrey Cain. For years, Apple has complied with demands of the Chinese government, collaborated with Chinese companies in research ventures, and increased its reliance on Chinese manufacturing—all in pursuit of higher sales in the country’s market. But Apple’s strategy has backfired. Apple is now one of the most China-dependent major U.S. companies. China has leveraged Apple’s innovations to advance its geopolitical goals while using the company to perpetuate its authoritarian aims. As artificial intelligence reshapes the technological landscape, America’s leading tech companies face a choice between their stated values and their pursuit of profits. You can read the full op-ed HERE . ### About Tech Integrity Project: The Tech Integrity Project works to protect the national security and economic competitiveness of the United States by preventing Big Tech companies from aiding America’s adversaries. The organization works to educate policymakers and the public about the problematic business activities of U.S. tech companies in China and other adversarial nations, including capital investment, overseas research, transfer of trade secrets, and selling access to sensitive technologies.

Earlier this week, the U.S.–China Economic and Security Review Commission released their Annual Report to Congress. The report highlights how the United States and China are in strategic competition to dominate the global technological landscape and how American companies are helping China progress in key emerging technologies. Technological dominance is a priority for the Chinese government. One of the Commission’s key findings is that “The CCP is prioritizing research in key emerging technology areas such as AI, quantum technology, biotechnology, and batteries with the goal of becoming a world leader in science and technology,” and that President Xi is betting that such dominance will achieve China’s goal of becoming a superpower in the 21 st century. Technological leadership is key to global leadership. The commission found that “[China’s] rapid technological progress threatens U.S. economic and military leadership and may erode deterrence and stability in the Pacific, as well as tip the global balance of power.” American leadership is under threat. The Commission finds that the United States can claim leadership in artificial intelligence, for now, but China is making rapid progress. The Commission also finds that China is an “early leader” in quantum computing and is significantly ahead in advanced battery technology. TIP Policy Director Geoff Cain recently wrote an op-ed in The Hill on how Apple handed over key battery technology to Chinese electric vehicle champion BYD. American companies should play no role in China’s advancement with emerging technologies. The report unfortunately highlights some examples of how China has been able to advance in key emerging technologies thanks to cooperation with American firms: “Currently, both Microsoft and Amazon AWS operate cloud services in China, with Microsoft offering services under a wholly owned subsidiary of local company 21Vianet and AWS China partnering with local companies Sinnet and NWCD to offer data center services.” “An Amazon executive for Greater China reportedly stated in June 2024 that AWS “is committed to long-term investments in China, and will focus on offering generative artificial intelligence technology and helping Chinese enterprises in their digital transformation.” “Early gains in China’s AI models have been built on the foundations of U.S. technology” “A survey from Biotechnology Innovation Organization, a trade association, found that of 124 U.S. biotech companies that responded, 79 percent had at least one contract or product agreement with firms based in China or owned by China for services such as gene sequencing, data management, and conducting clinical trials” These are just a handful of examples where American corporate cooperation with China has supported their objective for technological superiority. TIP recently covered how Apple engaged in a billion dollar research endeavor with Chinese automaker BYD, advanced their battery technology. The Commission describes BYD as now being “a major player in the global EV market, dominating domestic and foreign firms in China’s EV market while surpassing Tesla in global sales of battery EVs in the last quarter of 2023.” ### Tech Integrity Project is dedicated to ending this collusion. Tech Integrity Project works to protect the national security and economic competitiveness of the United States by preventing Big Tech companies from aiding America’s adversaries. The organization works to educate policymakers and the public about the problematic business activities of U.S. tech companies in China and other adversarial nations, including capital investment, overseas research, transfer of trade secrets, and selling access to sensitive technologies. 

Yesterday, the Senate Judiciary Committee held a hearing entitled “Big Hacks & Big Tech: China’s Cybersecurity Threat” that underscored the risks to American security directly caused by Big Tech’s cozy relationship with China. Tech Integrity Project lauds the Committee for creating a bipartisan venue to examine this important issue. Below are some highlights: There is bipartisan recognition that American Big Tech Companies are sacrificing American security for profit. Senator Richard Blumenthal: “Even as Chinese companies undermine our national security, American ones often do the same. China has used economic coercion to enlist American companies for its own agenda. And we have given them a free pass far too often. Companies like Apple have acted as partners of the Chinese government to censor ideas and information in China. They blocked independent media, and they've helped the CCP crackdown on dissent, human rights and democratic values. But also our national and economic security are at stake as a result of China's leverage, its economic leverage, and these conflicts of interest involving American companies.” Senator Josh Hawley: “We face with China, a peer competitor of a kind that we frankly haven't seen in any of our lifetimes. And I hope it's also a wakeup call for these American corporations that, for too long, had been willing to sell out American jobs and America’s security interest in order to make a quick buck and, in so doing, have threatened all of us.” Big Tech is invested in and dependent on China . Big Tech is reliant on China for manufacturing and sales. Senators asked what risks this creates for America. Senator Josh Hawley: “Mr. Stone Fish, let me come to you and pick up a line of questioning that I was starting to discuss with Mr. Bresnick. Here, we’ve got these companies, Apple, Amazon, Microsoft, Tesla, hugely, hugely invested in China and hugely dependent on China. And it would be one thing if they were run-of-the-mill, no-name companies. But Apple, and Amazon, Microsoft, these are arguably—each of those three are—monopoly size companies that have significant control of vast sections of our consumer economy. So I guess my question is, how concerned should we be that 80% of Apple suppliers have a base in China, 95% of Apple’s key consumer products are manufactured in China, a third of Amazon’s suppliers are in China … Microsoft’s-China based research lab produces 10% of the company’s research output? Those are massive numbers. Should we be concerned about this? Or is this not relevant? I mean, are we panicking unnecessarily?” Isaac Stone Fish: “Thank you for bringing these issues up. I think this is incredibly important. And I think there’s this perception in DC that, ‘oh, everyone’s talking about China.’ We’re talking about it too much. I don’t think we’re talking about this nearly enough. I am really appreciative that you brought up the potential for a Chinese invasion of Taiwan and a war with Taiwan. It’s our very strong belief that the businesses you mentioned have constantly underpriced the risk of a Chinese invasion of Taiwan, and they’ve long underpriced the risk of their very heavy China exposure. There’s massive national security implications of the figures that you just described. And I think US government agencies need to be really aware of the various different interests and influences inside these corporations. You know, we’re in an era of shareholder capitalism. And if it’s in Apple’s best financial interest to double down on China, where does that leave us? And where does it leave Apple consumers who’s using an Apple laptop right here, but also the US government? I think this is especially the case with Microsoft and the US government’s relationship with Microsoft. And understanding that the depth of Microsoft’s entanglement with China and with the Chinese Communist Party poses very real supply chain and security risks. And these are things that big US companies absolutely need to disclose.” *** Senator Richard Blumenthal: “Apple complies with China's censorship and surveillance demands, because 20% of its sales, and 80% of its suppliers are based in China. When forced to choose between American security and hugely profitable access to the Chinese market, Americans may doubt that SpaceX, Mr. Musk, Tim Cook, and other technology leaders will side with America.” *** Senator Richard Blumenthal: “Do you think it's more the practical difficulty of relocating the supply provider? Or is it as Mr. Stone Fish suggested the fear of reprisals? You understand the question? In other words, Is it the logistical difficulty of moving a supplier or a source of supply out of China? Or is it the fear that there will be some kind of revenge from the Chinese government?” Sam Bresnick: “I think you could credibly argue it's both. I think it's very hard to logistically do this. And you see companies like Apple, for example, which has made an effort to make more of its iPhones in India, generally through Foxconn, a Taiwanese electronics manufacturing company, at the same time they're doing that, Tim Cook is going to China, and he's announcing new investments in China. So I think these things go hand-in-hand. There's a desire to stay in the good graces of the Chinese Communist Party, and there's a desire to actually make moves to reduce exposure.” ### Tech Integrity Project is dedicated to ending this collusion. Tech Integrity Project works to protect the national security and economic competitiveness of the United States by preventing Big Tech companies from aiding America’s adversaries. The organization works to educate policymakers and the public about the problematic business activities of U.S. tech companies in China and other adversarial nations, including capital investment, overseas research, transfer of trade secrets, and selling access to sensitive technologies.

Comments Recommend Ways to Mitigate AI Supply Chain Risks from Big Tech Firms Operating in China subtitle for your new post

Washington, DC – Earlier this week, the Inspector General for the U.S. Department of Commerce announced it was initiating an audit of the Bureau of Industry Security’s (BIS) efforts to combat China’s Military-Civil Fusion (MCF) program. Tech Integrity Project strongly supports this initiative. BIS’s role is critical to national security, and we must ensure that the agency is successfully combatting China’s attempts to steal U.S. innovations for their own military gain. China’s MCF is a systematic initiative by the government of China to build a “world class” military by 2049 by integrating key private industries (artificial intelligence, 5G, biotechnology, big data, private universities, semiconductors, energy) with military objectives and needs. It further blends private industry and government in China. The Department of Defense releases annually a list of Chinese companies that it identifies as participating in MCF. The Bureau of Industry and Security is an agency under the Department of Commerce that is responsible for issuing and enforcing export controls on dual-use technologies—technologies that are civilian in purpose but could have a potential military application, such as materials used for nuclear energy or advanced semiconductors. BIS’s imposition and enforcement of export restrictions is critical to ensure these technologies do not flow into adversarial countries for their misuse. It is imperative that American companies and the federal government are on the same page with combatting China’s ambitions. Some American Big Tech companies have an unfortunate record of contracting with Chinese companies in support of PRC government objectives and even working to undermine U.S. export control policy: Microsoft actively lobbied against upcoming regulations from BIS that would close a loophole in export controls, whereby otherwise restricted technologies through the cloud. Microsoft just recently announced that it would let Chinese companies exploit these loopholes. Amazon provided cloud service to sanctioned Chinese surveillance technology firms. Apple planned to use YTMC made semiconductors, despite evidence of military connections, for their next generation iPhones. YMTC was later designated as a MCF participant. While it may take possibly years for the Inspector General to complete its audit, we appreciate their recognition of BIS and its important role to prevent American technology from ending up in the hands of the Chinese military. ### About Tech Integrity Project: The Tech Integrity Project works to protect the national security and economic competitiveness of the United States by preventing Big Tech companies from aiding America’s adversaries. The organization works to educate presidential candidates and the public about the problematic business activities of U.S. tech companies in China and other adversarial nations, including capital investment, overseas research, transfer of trade secrets, and selling access to sensitive technologies. We’re calling on elected officials and candidates to sign our pledge . To stay updated and join our cause, click HERE .

TIP Policy Director joined Michael Sobolik on the American Foreign Policy Council’s Great Power Podcast to discuss the compromises American Big Tech companies have made to access China’s market, and why they’ve stayed despite the mounting security risks. The Motive “They have every reason to go work in China because China is a highly profitable market, and that means better dividends and better returns for shareholders.” “China has 1.2 billion potential users. If you're Microsoft and you want to get more people using Windows, that's 1.2 billion people potentially using PCs and tablets and so forth. And if you can get them on Microsoft software, that's an enormously profitable market. Same holds true for Amazon. Amazon Web Services, a cloud computing service, does a lot of work in China.” The Story “The story of American big tech in China is them trying to go there, thinking that if we go and open the checkbook and show them all this wonderful global technology, China will become a liberal democracy. Its authoritarian system will evolve as the middle class, the bourgeoisie class, rises and demands better rights. Sort of a textbook case of liberalization since the 1980s. That was a bill of goods that never happened. It was a bald lie that was sold by our elites in technology and business who wanted us to believe that this was a good idea. What actually happened is that big tech companies had to make concessions to China, and they had to take a vow of silence. So that's why Microsoft is doing all of this very questionable, shady activity in China. But they'll go before Congress and make statements that are very close to misrepresentations that just seem off based on what the body of evidence says out there. They're loyal equally to the Chinese flag and to the American flag. And that is a major conflict of interest.” You can listen to the podcast below or in full HERE . ### About Tech Integrity Project: The Tech Integrity Project works to protect the national security and economic competitiveness of the United States by preventing Big Tech companies from aiding America’s adversaries. The organization works to educate presidential candidates and the public about the problematic business activities of U.S. tech companies in China and other adversarial nations, including capital investment, overseas research, transfer of trade secrets, and selling access to sensitive technologies.

“When it comes to emerging technology, you cannot be both in China’s camp and our camp.” This is the choice American Big Tech companies are trying to avoid, according to a new op-ed by TIP Policy Director Geoffrey Cain that published in The Hill. Whether it is Amazon providing machine learning technology to affiliates of the Chinese military, or Microsoft lobbying against rules to cut off the Chinese government’s access to artificial intelligence, “American Big Tech companies have long shown that they won’t voluntarily prioritize U.S. national security over profits. They must be forced or pressured to do the right thing. “ You can read the full op-ed HERE . ### About Tech Integrity Project: The Tech Integrity Project works to protect the national security and economic competitiveness of the United States by preventing Big Tech companies from aiding America’s adversaries. The organization works to educate policymakers and the public about the problematic business activities of U.S. tech companies in China and other adversarial nations, including capital investment, overseas research, transfer of trade secrets, and selling access to sensitive technologies.

Washington, DC – Tech Integrity Project joined a coalition letter , urging the Department of Justice to hold Apple accountable for its abusive App Store practices, including how the tech giant caters to the Chinese Communist Party. The letter, addressed to Assistant Attorney General for Antitrust Jonathan Kanter, notes that Apple applies a double standard in managing the App Store, ignoring the concerns of American app developers while enthusiastically complying with diktats from Beijing. As the letter highlights: [W]hile Apple has long discarded the concerns of American app developers, the company has been happy to modify its App Store policies to appease the Chinese Communist Party (CCP) regime. Last year, it was reported that Apple would acquiesce to China’s demands for apps on the App Store to list their Beijing-designated Internet Content Provider (ICP) filing number. In doing so, Apple closed one of Chinese citizens’ only avenues to access, through VPN, apps banned by the Communist regime. It’s worth noting that this came just three years after Apple removed some 39,000 apps on the App Store in China in a single day to appease the government. This only scrapes the surface of Apple’s advocacy on behalf of Beijing: in 2020, the company tried to wield its lobbying might in D.C. to weaken legislation to stop forced labor in the Xinjiang region. " It’s fitting that just as this lawsuit dropped, Tim Cook had been in Shanghai touting more investment in China and boasting Apple’s supply chain there as its most important," said Geoffrey Cain, Policy Director at Tech Integrity Project. "As a company that was founded in America and saw monumental growth because of our free system, it is shameful how Apple bends to the demands of the CCP. The hypocrisy is stark. Apple fights virtually every request from an American app developer, citing security and other concerns to maintain its walled garden. But the walls come crumbling down as soon as Beijing calls. Apple simply cannot have it both ways—preaching the virtues of cybersecurity while letting the CCP exert control over its products. To the extent that Apple’s market position enables or exacerbates this behavior, we support the DOJ investigating the company.” You can read the full letter by clicking HERE . ### About Tech Integrity Project: The Tech Integrity Project works to protect the national security and economic competitiveness of the United States by preventing Big Tech companies from aiding America’s adversaries. The organization works to educate presidential candidates and the public about the problematic business activities of U.S. tech companies in China and other adversarial nations, including capital investment, overseas research, transfer of trade secrets, and selling access to sensitive technologies. We’re calling on elected officials and candidates to sign our pledge . To stay updated and join our cause, click HERE .

TIP Policy Director Geoffrey Cain joined KMZQ's Kevin Wall Radio Show to call on U.S. companies end their love affairs with China. Host Kevin Wall: "Do you trust big tech to do the right thing?" Geoffrey Cain: "Big Tech has shown that it will pursue it's own interests. It will throw America under the bus if it needs to. We need to do more to get big tech under the flag of America. The fact of the matter is if you are company founded and operating here in America, your allegiance should be to American principles, American democracy, and the American way of life. I think these private tech companies going to these overseas authoritarian regimes and trying to set up shop in China compromises them and they need to stay true to their values. They can't work for both sides when both sides are moving apart. They have to chose their allegiance and have to chose their flag. And the authoritarian Chinese government must not be their allegiance. That is dangerous." Geoffrey Cain also discussed how the issue is impacting presidential campaigns Host Kevin Wall: "You mentioned presidential candidates, are they talking enough about China at this point?" Geoffrey Cain: "There has been a lot of good talk about China, the threats of China. I think we have seen more and more candidates get on with this particular topic because they are realizing more and more that China does pose a major threat and there are major US companies helping the Chinese Communist Party. So we do have a pledge that we've asked candidates to sign. So far Governor Ron DeSantis has been the first to sign." "We have been on the campaign trail, talking to campaigns, and people seem receptive. This has become an election issue, our polling shows voters are deeply concerned about this." You can listen to the full interview by clicking HERE , beginning at 8:29 ###