U.S. Defense Secretary Pete Hegseth announced Wednesday that the Pentagon has opened a sweeping investigation into Microsoft following revelations that Chinese Communist Party (CCP)-linked engineers worked on U.S. military cloud contracts under a controversial program dating back to the Obama-Biden administration.
The program, known as “Digital Escorts,” allowed U.S. citizens with security clearances but limited technical expertise to act as intermediaries while China-based engineers executed sensitive work on Pentagon systems. Though marketed as compliant, the workaround effectively granted foreign nationals indirect access to highly classified defense infrastructure.
“The use of Chinese nationals to service Department of Defense cloud environments — it’s over,” Hegseth declared.
The Pentagon has issued Microsoft a formal “matter of concern” notice and is requiring a third-party audit of all code written under the program. Investigators will review whether Chinese engineers inserted malicious code, backdoors, or vulnerabilities into U.S. military systems.
In addition to the external audit, the Defense Department is conducting a parallel internal probe into both Microsoft’s practices and the Chinese nationals involved. Hegseth emphasized that all software vendors must now certify the removal of Chinese involvement in defense networks.
“This never should have happened in the first place,” Hegseth said. “But once we found out about it, we attacked it aggressively from the beginning, and we’re going to follow all the way through the tape to make sure this is addressed.”
The investigation follows a ProPublica report describing how Microsoft’s escorts–roughly 50 in total–relayed hundreds of commands from Chinese engineers without knowing what was being executed inside defense servers. Employees reportedly raised repeated warnings about the risks.
Cybersecurity experts and defense analysts have described the arrangement as a serious vulnerability.
“Microsoft’s gross irresponsibility in creating this backdoor should be fully exposed, and if laws were broken, those responsible should be prosecuted,” Michael Lucci, CEO of security firm State Armor, told the Daily Caller News Foundation.
The Trump administration has made tightening cybersecurity and reducing reliance on foreign tech workers a top priority. Pentagon officials did not provide a timeline for the review, but stressed that the audit will proceed immediately and “at no cost to U.S. taxpayers.”
