Bloomberg: ByteDance Spends Over $1 Billion on Microsoft AI Services Annually, OpenAI Complains Privately about Weak Distillation

According to DataBeat monitoring, Microsoft has built a large AI business in China by selling the OpenAI model to Chinese companies. Bloomberg has revealed that ByteDance has become Microsoft's largest AI customer, with annual spending on Microsoft's AI and cloud services in China expected to exceed $1 billion. Ant Group, Meituan, and Tencent are also major buyers of Microsoft Azure cloud services, with most of these expenses supporting overseas business expansion.

Within Microsoft, the business of selling AI models to China has seen rapid growth. Former Chief Commercial Officer Judson Althoff revealed during an internal sales meeting in July 2025 that Azure's AI business in China had the fastest revenue growth among all sales regions worldwide. After growing 400% in the 2024 fiscal year, revenue in the 2025 fiscal year nearly tripled. Althoff stated that the world's top AI solutions are being built on the U.S. West Coast and the Chinese East Coast, and Microsoft is the bridge connecting the two.

However, Microsoft's practice of reselling models in China has raised concerns within OpenAI. As OpenAI and Anthropic do not directly sell models to China for security reasons, Microsoft has independently formulated a policy for reselling the GPT series models in China through a unique partnership agreement. OpenAI has privately complained to Microsoft, believing that Microsoft has not taken sufficient measures to prevent Chinese customers from developing competing products by distilling and replicating OpenAI's models. To prevent intellectual property theft, Microsoft has not deployed models in China, and Chinese customers can only access them through the internet by crossing borders to servers in locations like Singapore.