Microsoft has emerged as the most likely buyer of the US operations of TikTok, the popular Chinese short-video app that President Trump is preparing to effectively ban on national security grounds.
A deal would be based on Microsoft’s stance toward China in which the firm has a sizeable presence – unlike fellow US tech heavyweights like Facebook and Google which appear to have given up on China’s consumer-facing market with its miscellany of government strictures.
The country accounts for over $2 billion in yearly revenue, Microsoft President Brad Smith said earlier this year.
Microsoft employs roughly 6,000 people in the country, with offices in Shanghai, Beijing and Suzhou.
Its flagship Windows operating system is widely used, though revenue has been crimped by piracy. In recent years the firm has pushed its Azure cloud computing product, launched in 2013 via a partnership with local information service firm 21Vianet.
China’s cyber-security law restricts Microsoft to providing Azure’s software and services while 21Vianet runs related data centers. It’s a small player in a sector dominated by local suppliers Alibaba Group Holding Ltd, Baidu Inc, Tencent Holdings Ltd and Huawei Technologies Co Ltd..
Its most important China performance is arguably the Microsoft Research Asia, famous as a pioneer in artificial intelligence.
Founded in 1998 with assistance from renowned Taiwanese-American AI scientist Kaifu Lee – who went on to lead Google’s China office – the lab has produced alumni who went on to become executives in TikTok owner ByteDance, Baidu, Xiaomi and Chinese facial recognition unicorns.
DOES MICROSOFT SELF-CENSOR IN CHINA?
Bing and LinkedIn in China appear similar to their international counterparts but Microsoft censors search results and content that the Chinese government considers sensitive.
Upon LinkedIn’s China launch in 2014, two years before the company was bought by Microsoft, then-CEO Jeff Weiner said censoring content would be”necessary” for the firm to grow in the nation.
In 2019, free speech advocates criticised LinkedIn’s position on censorship after human rights activist Zhou Fengsuo stated his profile was not viewable in China. LinkedIn blamed an “error” and revived its visibility.
Software development website GitHub, which Microsoft bought in 2019, is also accessible from China. The site, a coding repository, has been used by activists in China to maintain net content before police censor the source.
HAS MICROSOFT HAD SCRAPES WITH CHINA’S GOVERNMENT?
Microsoft has bemoaned rampant piracy of Windows in China for decades and has occasionally filed lawsuits and complaints even against state-backed companies to address its concerns.
Its most notable tussle with the authorities was in 2014 when authorities raided four Microsoft offices requiring access to contracts and other information as part of an anti-trust investigation.
The same year, the government called on all agencies to prohibit the purchase of Windows 8 citing safety reasons.
Microsoft eventually released a “China Government” edition of Windows 10 after a joint venture formed in 2015 with state-owned China Electronics Technology Corp..
Microsoft co-founder Bill Gates has spoken in mostly positive terms about China in recent decades. In November, he held a public meeting with Peng Liyuan, wife of President Xi Jinping.
Also late last year, Gates criticised the US government’s restrictions on telecommunications equipment maker Huawei and talked about sharing Windows source code with China’s government which aided official acceptance of the software in the nation.
He’s praised China’s response to coronavirus, which earned him public thanks from Xi, and the Bill & Melinda Gates Foundation has contributed $5 million to China for coronavirus relief.
The base is one of few overseas charities or non-governmental organisations to maintain operations in China, where it has worked with the government and academic institutions against diseases like malaria and tuberculosis.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Thomson Reuters. Reporting by by Josh Horwitz. Editing by Christopher Cushing.
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