Microsoft, which once considered quitting China unthinkable, has shut at least 15 branch offices and joint ventures in the country over the past five years, corporate filings show, pursuing a strategy of retreat described by five company sources. The firm considered quitting the market in 2023 because some executives felt it took on too much geopolitical risk for too little economic return, one source said, while stressing Microsoft has no current plans to exit. China accounted for just 1.5% of global revenue, Microsoft said in 2024. The erosion of trust between Washington and Beijing took a major hit, the five people said, as China has since 2017 pushed domestic software and U.S. export controls hindered Microsoft's AI and cloud businesses. Microsoft ultimately decided to remain because it had carved out a profitable business servicing Chinese companies like TikTok owner ByteDance, which need Western technology for overseas operations, according to three people. The company also believed it needed a presence to maintain access to China's engineering talent, two said. Microsoft's former China head Alain Crozier said the relationship with the government was among the deepest of any tech company, adding, "Because of the geopolitics … some days it's a little bit harder, but we never had a crisis." A Microsoft spokesperson said it operates in a regulatory environment applying to every international supplier and remains committed to the Chinese market.