China is accelerating plans to remove a customized version of Microsoft Corp.’s (NASDAQ: MSFT) Windows 10 from state-linked entities, citing data-security concerns, according to Bloomberg.
The Ministry of State Security recently instructed some government-affiliated organizations to uninstall the software from their computers, the news agency reported, citing people familiar with the matter.
The directive moves forward the planned retirement of the operating system by several months, underscoring Beijing’s deepening concerns about foreign software in sensitive government environments.
The Windows 10 version in question was developed by C&M Information Technologies, a joint venture between Microsoft and state-owned China Electronics Technology Group Corp., founded in 2016 to make Windows compliant with China’s cybersecurity and national-security requirements.
CMIT had originally scheduled the software’s retirement for February 2027, but the latest government directive has pushed that timeline forward considerably.
Microsoft told Bloomberg that it was not aware of any security incident involving the product and noted that the software continues to receive regular security updates.
The move is part of a broader push by Beijing to steer government agencies and state-owned companies toward domestically developed technology, with Chinese software companies including Kylin Software and Tongxin Software offering Windows alternatives.
Authorities have also pressed sensitive government organizations to replace foreign-branded personal computers, while China increasingly turns to domestic chipmakers such as Huawei Technologies and Cambricon Technologies as U.S. restrictions limit access to advanced Nvidia AI accelerators.
Despite the political headwinds, China remains a significant market for Microsoft, with the company maintaining a sizable cloud and AI services business serving major Chinese firms including ByteDance and Tencent.
ByteDance alone is expected to spend more than $1 billion a year on Microsoft’s AI and cloud services, according to Bloomberg, illustrating the financial stakes involved as geopolitical tensions continue to reshape the technology landscape.
Retail sentiment for Microsoft on Stocktwits dipped over the past week and was rated “bearish” on Tuesday, with one trader noting: “$MSFT $AMD $IGV $NVDA $DRAM tomorrow might just be a bad day all around no rotation between semis and software. From the new bombing at Hormuz, the AI bubble scare and Goldman saying chances of rate hikes are back on the table. Things might just get ugly all around the board.”
Despite the cautious mood, Microsoft shares have risen 23% since the company’s earnings report on July 29, though the stock remains flat since the start of the year.
