Microsoft Sells OpenAI GPT Models to Major Chinese Firms

Microsoft is the primary supplier of OpenAI’s GPT models to major Chinese internet companies, providing access through its Azure cloud under an exclusive commercial agreement with OpenAI. OpenAI and Anthropic have declined to sell their models directly in China, citing intellectual-property and misuse concerns.

Chinese customers reach GPT services over the internet from data centers outside China, including facilities in Singapore; Microsoft does not host OpenAI models on Chinese soil. The company says it uses automated monitoring and restricts sales to established firms rather than individual developers. OpenAI has privately urged Microsoft to limit “distillation” of its models, and Microsoft enforces contractual limits. Industry sources say synthetic data produced from model outputs is hard to police and that buyers in China do not face heightened scrutiny in practice.

Clients include ByteDance, which runs largely on OpenAI models and is on track to spend more than $1 billion a year on Microsoft’s AI and cloud services. Ant Group, Meituan and Tencent also obtain models through Azure; Ant Group reports it develops its own models and that key products do not rely on outside systems.

Azure AI revenue in China grew rapidly, roughly tripling in the fiscal year to June 2025 after a prior year of about 400% growth. Judson Althoff described Microsoft as “bringing those two places together” during a July 2025 sales meeting. Microsoft President Brad Smith informed U.S. lawmakers that the China business accounted for about 1.5% of the company’s 2024 revenue.

In January 2025 Microsoft added DeepSeek’s R1 to Azure AI Foundry and is testing a fine-tuned, Azure-hosted version of DeepSeek-V4 as a lower-cost option for Copilot Cowork, an enterprise agent that currently uses OpenAI and Anthropic models. As a result, Microsoft is supplying Chinese-developed models to some Western customers while offering American GPT models to Chinese firms.

U.S. lawmakers have raised questions about cross-border AI sales and potential uses that could affect economic or security interests. The commercial arrangement leaves Microsoft as the main conduit for OpenAI models into China while Anthropic’s offerings remain absent from Microsoft’s China portfolio.