Secretary of Defense Pete Hegseth declared a full-scale investigation into Microsoft for its reliance on Chinese Communist Party (CCP)-linked engineers in highly sensitive Department of Defense (DoD) cloud contracts.
Hegseth revealed that the scandal traces back nearly a decade to an Obama-Biden era program called “Digital Escorts” — U.S. citizens with clearance, but limited technical expertise — to act as go‑betweens for Chinese engineers.
While initially framed as a “compliance workaround,” the program handed the CCP direct access to some of the most sensitive infrastructure protecting the nation.
According to Hegseth, the Pentagon has issued a formal “matter of concern” to Microsoft, demanding a third-party audit of every line of code and submission tied to the Chinese engineers.
The investigation will examine whether malicious code or backdoors were inserted into U.S. military systems.
He announced that every DoD software vendor must immediately identify and eliminate any Chinese involvement in their systems.
Pete Hegseth: Last month, the Department of Defense was made aware of an Obama-Biden era legacy program called Digital Escorts. For nearly a decade, Microsoft has used Chinese coders, remotely supervised by U.S. contractors, to support sensitive DOD cloud systems.
The program was designed to comply with contracting rules, but it exposed the Department to unacceptable risk.
I mean, if you’re thinking America First and common sense—this doesn’t pass either of those tests. So, I initiated an immediate review of this vulnerability, and I want to report our initial findings.
The use of Chinese nationals to service Department of Defense cloud environments—it’s over. We’ve issued a formal matter of concern to Microsoft, documenting this breach of trust, and we’re requiring a third-party audit of Microsoft’s Digital Escort program, including the code and the submissions by Chinese nationals. This audit will be free of charge for U.S. taxpayers.
I’m also tasking Department of Defense experts with a separate investigation of the Digital Escort program and the Chinese Microsoft employees who were involved in it. These investigations will help us determine the impact of this workaround. Did they put anything in the code that we didn’t know about?
We’re going to find out.
WATCH:
The use of Chinese Nationals to service Department of Defense cloud environments is over. pic.twitter.com/jZdcHwKho2
— Secretary of Defense Pete Hegseth (@SecDef) August 27, 2025
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