INTERVIEW: Big Tech Sold Americans a Fairy Tale that Turned into a Nightmare
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.
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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.
In a recent Politico newsletter , TIP Policy Director Geoffrey Cain warns that while the White House is moving to crack down on Chinese AI distillation attacks, U.S. tech companies may be undermining those efforts. Cain argues that policymakers “cannot ignore” how firms like Microsoft could be enabling access to advanced AI systems through global infrastructure, pointing to reported loopholes in cloud services. The warning follows new disclosures that foreign actors have used proxy accounts to extract capabilities from U.S. AI models, a growing tactic in the U.S.-China tech race. ### Full statement: “The White House is right to sound the alarm on China’s industrial-scale theft of American AI. But if Washington is serious about stopping distillation, it cannot ignore the role that U.S. tech giants themselves are playing in handing China the keys. “Microsoft runs an AI research lab inside China that has trained a generation of the country’s top AI talent — including multiple engineers who went on to help build DeepSeek. Microsoft provides Chinese companies, including state-owned enterprises, access to OpenAI’s advanced models through its Azure joint venture, even as OpenAI claims to have banned China from using its products. And Amazon, Oracle, Microsoft, and other U.S. cloud providers have been selling remote access to restricted U.S. chips and frontier AI models to Chinese state-linked entities—a loophole in current export controls. “You cannot credibly fight Chinese AI theft while your own business model depends on enabling it. As part of this welcome effort, the Administration should scrutinize U.S. companies’ China dealings that may be facilitating the distillation it aims to prevent. American AI leadership does not mean handing our crown jewels to Beijing in the pursuit of short-term profits.”
The White House Office of Science and Technology Policy (OSTP) on Wednesday accused foreign entities — principally based in China — of waging “industrial-scale” campaigns to distill American frontier AI models, using tens of thousands of proxy accounts and jailbreaking techniques to extract proprietary capabilities. In a memorandum to executive departments and agencies (NSTM-4), OSTP Director Michael Kratsios announced that the Trump Administration will share threat intelligence with U.S. AI companies, help industry coordinate defenses, and explore measures to hold foreign actors accountable. The memo follows reports from OpenAI and Anthropic documenting distillation attacks by Chinese labs including DeepSeek, Moonshot, and MiniMax, and a House Select Committee on China investigation finding that Chinese AI labs are using fraudulent accounts and unauthorized API access to train on U.S. models. Tech Integrity Project Policy Director Geoffrey Cain offered the following statement: “The White House is right to sound the alarm on China’s industrial-scale theft of American AI. But if Washington is serious about stopping distillation, it cannot ignore the role that U.S. tech giants themselves are playing in handing China the keys. “Microsoft runs an AI research lab inside China that has trained a generation of the country’s top AI talent — including multiple engineers who went on to help build DeepSeek. Microsoft provides Chinese companies, including state-owned enterprises, access to OpenAI’s advanced models through its Azure joint venture, even as OpenAI claims to have banned China from using its products. And Amazon, Oracle, Microsoft, and other U.S. cloud providers have been selling remote access to restricted U.S. chips and frontier AI models to Chinese state-linked entities—a loophole in current export controls. “You cannot credibly fight Chinese AI theft while your own business model depends on enabling it. As part of this welcome effort, the Administration should scrutinize U.S. companies’ China dealings that may be facilitating the distillation it aims to prevent. American AI leadership does not mean handing our crown jewels to Beijing in the pursuit of short-term profits.”
In a new piece for The Spectator , TIP Policy Director Geoffrey Cain argues that Western tech companies, universities, and governments are systematically enabling China’s military and surveillance capabilities, often within the bounds of the law. Citing a federal indictment involving diverted AI servers, Cain says the real issue is not just illegal smuggling but the much broader, legal flow of technology and expertise to China. From tailored chip sales by NVIDIA to research partnerships with Chinese military-linked institutions, he warns that “the front door has been open for years.” Cain also points to cases like Microsoft’s past use of China-based engineers on sensitive U.S. systems and talent pipelines from its Beijing lab into China’s AI sector as examples of systemic risk. The bottom line: enforcement actions may catch bad actors, but Cain argues the larger threat is structural, with commercial incentives continuing to outpace national security safeguards.
In a recent piece for The Washington Examiner , TIP Policy Director Geoffrey Cain argues that conflicts of interest and national security risks are being overlooked in Microsoft’s government cloud business. Following reports that senior Justice Department officials involved in approving Microsoft’s GCC cloud service later joined the company, Cain warns that clear security red flags are being ignored. “Before the DOJ authorized GCC High, there were plenty of public reasons to treat Microsoft’s China operations as a serious security concern,” he says, pointing to the company’s Beijing research lab, ties to Chinese surveillance firms, and AI research collaborations with a Chinese military university. He adds that “any one of those facts should have triggered harder questions about putting sensitive law enforcement data on Microsoft’s cloud,” and argues that together they should have led to far more rigorous scrutiny. Cain also argues that the Justice Department’s dual role as both a customer and regulator creates a “structural conflict of interest,” weakening oversight of cybersecurity risks tied to sensitive government systems. The bottom line: weak scrutiny and revolving door dynamics help entrench a system with known vulnerabilities, raising broader concerns about how the government evaluates Big Tech partners.
In a recent podcast appearance , TIP Policy Director Geoffrey Cain argues that major U.S. tech companies remain deeply dependent on China, despite mounting national security risks. Speaking on the American Compass Podcast , Cain explains that Silicon Valley’s long-standing bet on engagement with China has backfired, strengthening the Chinese Communist Party and helping build its surveillance and AI capabilities. He warns that companies continue to expose U.S. supply chains to coercion and technology transfer, pointing to efforts by firms like NVIDIA to maintain access to Chinese markets even as restrictions tighten. Cain argues the underlying problem is structural. Tech companies are incentivized to stay in China, even when doing so undermines U.S. security.
Pro Publica recently published a report detailing how Microsoft, for nearly a decade, has used Chinese engineers to help maintain the US Department of Defense’s computer systems. According to the report, the Chinese engineers are overseen by officials who lack the technical knowledge to detect potential cyber threats. Notably, under Chinese law, all Chinese citizens are required to assist the Chinese government in intelligence and espionage operations if compelled. Tech Integrity Project Policy Director Geoffrey Cain offered the following comment: "For years, I’ve warned that Microsoft’s extensive business operations in China are threatening US national security. Today’s news may be the most egregious revelation yet. In recent years, China has launched widespread and successful cyber attacks against a slew of US government agencies by exploiting their Microsoft systems. Today’s news may explain why Chinese hackers have such a knack for cracking Microsoft products. It is past time that the Department of Defense and other US agencies exercise their procurement power to force Microsoft to make a change. There is simply too much at stake to enable US tech companies to continue putting profits over American security." You can read the full report , “A Little-Known Microsoft Program Could Expose the Defense Department to Chinese Hackers,” in Pro Publica, and you can see Geoff’s post on X here .
Imagine running your company out of a high-tech campus with armed guards at the gates, listening devices in the walls and a landlord who insists you turn over your blueprints to keep the lights on. Most executives would scramble for the exits. But for years, American tech companies made peace with that setup in China. Now, exposed by tariffs, they’re feeling the consequences of their devilish bargain. By inviting scrutiny, the tariffs are forcing Big Tech to confront the vulnerabilities they long ignored: their excessive reliance on Chinese manufacturing, their reckless partnerships with companies connected to an authoritarian government and their transfer of sensitive technology into the hands of America’s largest adversary. The results of the stress test of tariffs? They revealed that when forced to choose between shareholder returns and geopolitical alignment, many companies opted for market access — until that access came with a higher price.
According to the New York Post, a t least four current DeepSeek employees previously worked at Microsoft Research Asia, three of whom spent at least five years as research interns at Microsoft. “If you’re working for Microsoft for five years at any other job, that’s enough time to climb into a mid-senior or senior position,” said Geoffrey Cain, policy director at the Tech Integrity Project, in a New York Post article about Microsoft’s AI research lab in China . “Your typical intern does not spend five years developing AI software with that title, only to go on and to help release one of the most successful AI releases of all time.” “This is a deeper problem,” Cain added. “It’s that Microsoft is handing the training and the technology to China. It’s not necessary for these software developers in Microsoft to literally hand the tech to the CCP. They don’t even need to do that because Microsoft does it for them." Of equal concern, according to experts, is the fact that Microsoft Research Asia serves as a proving ground for some of China’s best tech talent – many of whom later utilize their expertise to start or work at firms that directly compete with US interests with the backing of the Chinese Communist Party. You can read the full article HERE . ### 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.
Geoff Cain appeared on Bari Weiss's podcast Honestly to discuss what DeepSeek means for U.S.-China relations and the race for AI dominance. "And this isn't just about generative AI. There's lots of types of AI. I saw it when I was in China, when I was investigating surveillance AI. So, facial recognition technology, a lot of this being developed with the help of software developers who were trained by Microsoft and other American companies being sent out there to set up an AI system, which, by the way, the Chinese government literally called 'Skynet.' I mean, it's like right out of Terminator." "You go to any Big Tech Company, almost all of them will say nothing bad about China or about the CCP or the human rights abuses there, the national security concerns there, because they've been bought off by market access. They want to be able to manufacture their EVs and their cars and whatever else it is that they're making in China." ### 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.
TIP Policy Director Geoffrey Cain joins Emily on the UnHerd podcast to discuss the rise of DeepSeek. *** Geoffrey Cain "It's just the reality of doing business with China. Many US companies have done business with China. Microsoft is a good example—Apple has also done quite a bit there—but Microsoft is a company that has fueled much of the rise of China’s AI industry. They’re one of the biggest investors with one of the biggest presences in China when it comes to AI and they even actually had a dispute not long ago with a Chinese company that was involved in AI because they were abusing one of these AI models that Microsoft was renting out to them. This company was trying to use it, and by the way this company was ByteDance, the parent company of TikTok. They were trying to create their own AI model using American AI models, which was against the rules of that contract. So whenever American companies go to China, they tend to get bilked and messed with." *** Geoffrey Cain "I would say one of the big culprits behind China’s technological rise as I found out when I lived in China, was not merely Chinese firms, but US firms. American big tech companies were promised a bill of goods, this was back in the high age of globalization 20 to 30 years ago. They were promised a bill of goods that if they entered China, China would eventually change, it would become more democratic, it would become more open. people would become wealthier and more prosperous, and one day we would see a better China, a more prosperous China that could become maybe a US ally or it could become some kind of major technological partner. That world never came to exist. It was an absolute lie, and the people who were in China—journalists in China, government officials, I’ve spoken to a number of them in China—they all knew that this wasn’t gonna happen. They knew what the Chinese Communist Party was planning, and the plan was to steal intellectual property, to steal it for the greatness of the Chinese state, to apply it to Chinese technologies, including military tech and surveillance tech, and then use it to build their own ecosystem all while kicking out the US companies or just giving them a really hard time once they built their presence there. ... It's sad that it's come to this, but now, here in America, American Big Tech Companies, they won’t say anything about China in public because they’re so terrified of angering the Chinese Communist Party and then losing their market access or having some major regulatory attack in China. The CCP will open investigations into them and arrest people and fire them and so forth. They’re just terrified of the Chinese Communist Party power and they self-censor in a democracy, in America, to please the CCP. So one of the problems in this field that we’re talking about today with Chinese AI, with what’s happening over there, we can’t have an open discussion about this in America because American companies refuse to stand up to an authoritarian, hostile regime. They wanna keep the CCP, the Chinese Communist Party, happy while they keep the Trump Administration happy. They think they can have it both ways. But ultimately they’re finding increasingly that they have to choose a side. It’s one or the other. Your flag is either America or China and you can’t have it both ways." ### 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.
