As it pursues TikTok, a look at how Microsoft laid roots in China in the 1990s and nurtured China's future tech leaders, including ByteDance's Zhang Yiming
Welcome to the weekend. You all already know that I'm obsessive … Zane Schwartz Last / The Logic : The U.S. did not inform Canada about its new initiative to ban Chinese technology like TikTok and WeChat Hudson Lockett / Financial Times : Trump's TikTok and WeChat order wipes $75bn off China tech stocks Tweets: @lichtspektrum : One way to look at how a TikTok lawsuit against US could go, and this is suggested by a lawyer acquaintance: defendant is definitely going to ask for the plaintiff's (incl. BD's) correspondence with the Chinese government to be made public, which BD can't really afford to... https://twitter.com/... Sean Hollister / @starfire2258 : If you've never heard of Tencent or don't think about them much, this might be a good time to change that. They have their fingers in SO many pies — including the biggest mobile games and huge Hollywood blockbusters. The list in here is just the start: https://www.theverge.com/... Linda Tang / @lindatangusa : “.For nearly a year, we have sought to engage with the US government in good faith to provide a constructive solution to the concerns that have been expressed."says TikTok. I remember Tiktok rejected testifying in congress https://www.cnbc.com/... Harry McCracken / @harrymccracken : I loved visiting Microsoft's Beijing lab in 2004. Given the locale, it had an amazingly Redmondian vibe to it, and they were doing some things with image-processing technology that seemed amazing at the time. https://www.ft.com/... Yuan Yang / @yuanfenyang : I started working on this story a year ago, and this is the right week to get it out. How Microsoft laid roots in China, and seeded its future tech leaders, including TikTok's Zhang Yiming. “The soft power of Microsoft in China is immense.” (thread) https://www.ft.com/... Shoshana Wodinsky / @swodinsky : the internet's economy is *specifically built* to cross international lines. banning “chinese apps” like tiktok or shifting their ownership won't do shit to keep our data “safe.” if anything, it'll make things worse i did my best to break down why: https://gizmodo.com/...
Context & Ripple Effects
The Financial Times piece arrives mid-negotiation: ByteDance executives reportedly see a Microsoft acquisition as the most viable outcome precisely because of management capacity and prior personal ties between the two companies — roots this article traces to Microsoft's 1990s China expansion that helped train Zhang Yiming himself.
That history cuts both ways. The same week Trump's executive order on TikTok and WeChat erased roughly $75 billion from China tech stocks, the New York Times documented how [[a:956397|ByteDance's successive appeasements to Washington and Beijing were undone by geopolitical reality]], leaving a sale to the one American company that knows ByteDance's founders as the main escape route.
First-order effects
- Microsoft is positioned as effectively the sole acceptable buyer of TikTok's US operations — a deal whose feasibility rests on relationships it seeded in China a generation ago.
- ByteDance faces a compressed timeline: with a ban initiative already announced and litigation looming that could force disclosure of its correspondence with the Chinese government, a negotiated sale to Microsoft becomes the least-bad path.
Second-order effects
- Tencent's WeChat is caught by the same executive order, meaning every major Chinese consumer-internet company with US exposure must now weigh divestiture or exit rather than engagement.
- A Microsoft-TikTok deal would hand Microsoft an influence win in DC — coverage notes it now runs one of the most effective Washington influence operations — while rivals without that capital lose ground in short-form video.
Third-order effects
- Three decades of US-China tech interdependence — American firms training the founders of their eventual Chinese competitors — are being unwound through forced transactions rather than policy frameworks.
- If ban-then-acquire becomes the template, cross-border tech investment inverts: instead of US capital seeding Chinese startups, ownership itself becomes the liability, chilling future two-way tech M&A.
The trend: The US-China tech relationship built by Microsoft's 1990s generation of investors is being dismantled deal-by-deal, with acquisitions serving as the managed-exit mechanism for Chinese-owned apps facing American bans.