Microsoft Lab Trained Engineers Who Now Lead Chinese AI Firms

Microsoft never made much money selling software in China. James King, a writer on Chinese business, laid out that disappointment while talking with fellow China business writer Alice Han. King noted, "Right now, China accounts for just 1.5% of Microsoft's global revenue."

King then pointed to a different kind of presence, an artificial intelligence research lab in China. He said, "So maybe the China dream for Microsoft will be less about selling things into China than using China's intellectual talent to create AI products and selling those around the world."

Han connected that talent to two prominent Chinese AI companies, saying of the lab's alumni, "So essentially, they have been trained by an American tech company and then have gone off to do their own AI businesses and models elsewhere in mainland China," referring to former lab members who now hold senior roles at SenseTime and DeepSeek.

The lab, identified by Reuters as Microsoft Research China, has had many prominent figures in Chinese artificial intelligence pass through it. It has also added research sites in Vancouver, Singapore, and Tokyo.

That training role stands out because the sales effort fell flat. In the 1990s and 2000s, Microsoft software was pirated across China, and King recalled Bill Gates saying that more than 90 percent of personal computers there ran Microsoft software, almost all of it pirated.

Han said Microsoft and Tesla look alike in one respect, in that both have produced engineers who left to set up operations doing similar work. For Tesla, Han noted, China now functions as a manufacturing base that builds more than half of its electric vehicles.