Silicon Valley tech giants, including Microsoft and Google, have supported tech companies that provide censorship and policing technologies in China, according to publicly available corporate and promotional materials reviewed by Rest of World.
Support for the companies through their startup incubator programs raises questions about the future of these initiatives, especially as Donald Trump prepares to take a second term as president. Experts say Chinese tech companies and their Western partners will likely face increasing scrutiny in Washington for the next four years, and the kind of tech collaboration Microsoft once pioneered with China might be facing an end.
Over the last decade, China has become a global leader in using new technologies for surveillance and policing. In some cases, the technology enforces traffic rules and finds missing children. But authorities also use cutting-edge software to censor online speech, arrest bloggers and activists, and surveil ethnic minorities, most notably the Uyghur population in the northwestern region of Xinjiang.
Two Chinese companies were selling censorship software to support government regulations or working with the police before they joined Microsoft’s long-running program. AI startup Data Grand sold censorship software to internet companies before joining the incubator in 2017, while cybersecurity firm Tophant partnered with a police research institute back in 2021, before it was accepted into the program in 2023.
Two other startups partnered with Chinese police after they graduated from the U.S. tech giant’s program. In 2018, facial recognition firm DeepGlint worked closely with police in Xinjiang, where the government deployed surveillance tools to oppress ethnic minorities. In 2021, the U.S. sanctioned DeepGlint for its involvement in human rights violations in Xinjiang. Another company, Hydata, collaborated with a police lab in Xinjiang in charge of analyzing surveillance camera footage.
The incubator program, called “Microsoft for Startups,” has supported more than 800 companies since its launch in China in 2012, according to Microsoft’s website. The program provides office space, mentorship opportunities, access to Microsoft tools and cloud computing and connects firms with investors and clients. Several U.S. tech companies have introduced similar incubator programs in China to find business partners and expand their own client base in a fast-growing tech industry.
The Microsoft accelerator focuses on cutting-edge industries such as AI, cloud computing, virtual reality, and robotics, according to a recent state media interview with James Chou, the managing director of Microsoft for Startups in North Asia. Microsoft operates similar programs in countries including the U.S., the U.K., India, Germany, Israel, and Australia.
Microsoft said in an online post in August 2022 that the combined market valuation of their China alumni reached more than 400 billion yuan ($57 billion). While most Chinese participants work in sectors that don’t have surveillance applications, U.S.-China business ties are broadly being scrutinized by U.S. politicians, as the two largest economies engage in a tech innovation race.
Google, Nvidia, and Amazon Web Services — Amazon’s cloud computing arm — also run incubation programs in China. Rest of World found documentation, including press releases and media coverage, which showed that one startup supported by Google, LLVision, was providing smart glasses that helped police identify fugitives for several years before joining Google’s incubator in 2022.
Microsoft did not respond to Rest of World’s requests for comment, and Google declined to comment.
The Chinese government’s use of surveillance tech, along with internment camps, in oppressing ethnic and religious minorities in Xinjiang came into a global spotlight starting around 2019, following a United Nations report about it in 2018. The U.S. government has since sanctioned several Chinese tech firms, including DeepGlint, accusing them of aiding the repression.
They were investing in more general infrastructure and foundations for technology that could be applied to all these different applications.”
It’s unlikely that Microsoft or Google were motivated to incubate Chinese tech to “supercharge China’s surveillance state,” says Jeffrey Ding, assistant professor of political science at George Washington University and a leading expert on China’s technological capabilities.
“They were investing in more general infrastructure and foundations for technology that could be applied to all these different applications. It just so happened that [from the Chinese government] there is so much demand for this one application: smart surveillance. And some Chinese companies failed to diversify from surveillance tech.”
“I do think there is some responsibility from the investor to have clarity about what the likely applications with the market are going to be, especially in the Chinese context,” Ding told Rest of World.
The Chinese state’s demand for social stability has contributed to a booming market for surveillance cameras, facial recognition software, and systems used to monitor online speech. By working in security tech, companies access not only government procurement contracts but also the massive amount of data collected by the state, according to a peer-reviewed study by researchers with the Massachusetts Institute of Technology, Harvard University, and the London School of Economics and Political Science.
“For many of these companies, state contracts are the lifeblood,” Bulelani Jili, a Meta Research Ph.D. fellow at Harvard University, who has researched China’s cybersecurity industry, told Rest of World. Jili said the companies and their Western incubators likely did not expect that U.S.-China political tensions would ramp to such high levels.
Yu Zhou, a Vassar College professor of economic geography who has studied China’s high-tech innovation, said many Chinese entrepreneurs viewed their work with the police as improving public safety, without anticipating the human rights concerns such collaborations would cause in the U.S.
Data Grand joined the Microsoft incubation program in 2017, according to its website and a Microsoft press release. Earlier that year, the company announced on its website that it had been providing censorship services to web novel publishing platforms to help it identify pornographic or “reactionary” anti-government content. (Chinese law holds internet content providers liable for illegal content on their platforms.)
After graduating from the program, Data Grand developed automation tools for Chinese police. In Wuhai, a city in Inner Mongolia, its “big data + artificial intelligence solution” system helped police trace the movements of travelers, as part of China’s zero-Covid campaign in 2020, according to a post on Data Grand’s website. Police also used its automation system to pursue suspects and combat phone scams, according to another post on its website. In the Huawei cloud store, Data Grand has since 2021 been selling a software tool that helps online platforms censor politically sensitive information, including mentions of Chinese leaders.
Cybersecurity company Tophant was accepted into the Microsoft program in 2023, according to a Microsoft press release. In 2021, Tophant partnered with a research institute under the Ministry of Public Security to launch a joint lab on cybersecurity, according to a state media report. In a slide presentation attached to a 2021 university intern recruitment notice, the company also highlighted cybersecurity software that could detect illegal content, showing examples such as “Communist bandits,” “Hong Kong independence,” and “terrorism.”
Data Grand, Tophant, DeepGlint, Hydata, and LLVision did not respond to requests for comment. Hydata hasn’t updated its online platforms in several years, and Rest of World could not confirm whether the company was still operational.
If Congress and the administration decide the incubation programs are a bad idea, they’re going to eventually close them down.”
James Lewis, senior vice president at the Center for Strategic and International Studies (CSIS), said U.S. administrations before Trump and Biden were more optimistic that “the U.S. and China would work together,” so policymakers were not closely monitoring business activities in China. But in recent years, criticisms of China’s surveillance regime and growing U.S.-China tech rivalry have put American companies’ China ties under increasing scrutiny.
This year, lawmakers grilled Microsoft Vice Chair and President Brad Smith, asking him if the company’s presence in China posed a national security threat. At the Homeland Security Committee hearing, Smith said that Microsoft’s China operations served the interests of the U.S., but it was reducing the size of its engineering teams in the country.
“No one was looking at tech companies’ investments in China five years ago. But they are now,” said Lewis, a former U.S. diplomat and United Nations adviser, who has advised on multiple trade negotiations with the Chinese government. “If Congress and the administration decide the incubation programs are a bad idea, they’re going to eventually close them down,” he told Rest of World.
The two startups that began providing policing services after they graduated from the Microsoft program continue to offer such services, while enjoying an extensive business network as incubator alumni.
Microsoft has showcased alumni companies at industrial exhibitions and organized networking events for them to meet potential business clients, according to event updates posted on Microsoft’s WeChat channel. The channel, which for years shared updates almost weekly, has not published any posts since June 17.
DeepGlint, the facial recognition company, joined the Microsoft for Startups program in 2013 and established its first office at Microsoft’s coworking space in Beijing, its founder Zhao Yong said in a 2019 interview. In 2014, Zhao’s co-founder He Bofei said in an interview that the company decided to develop surveillance camera systems because the market was big. It built a “joint lab” with the visual investigation team of the police in Urumqi, the capital city of Xinjiang, according to Chinese media outlet Sohu’s 2018 interview with founder Zhao Yong, who called the Urumqi Public Security Bureau DeepGlint’s “top customer.” The firm was sanctioned by the U.S. government in 2021 for alleged links to Beijing’s repression in Xinjiang. In 2023, Zhao also told Chinese media that the firm was one of the few that provided facial recognition services to the Ministry of Public Security. The technology has also been used to find abducted children, Zhao said.
Hydata, an AI data analytics company that joined the startup program in 2014, demonstrated its AI data-processing technology for policing applications and other services related to government work when Microsoft employees and other incubator alumni visited the company in 2017, according to a Microsoft’s own channel post on WeChat. Wang Lei, an executive at Microsoft’s Beijing incubator office, even provided an endorsement: “Hydata’s visualization system has a very high technical content, and it’s widely used, especially in the government and public security systems,” according to the same post. The same year, Hydata announced in an online post that it had been named a “technical support unit” for the Xinjiang police, adding that it serves one-third of China’s police market. Despite its ties with Chinese police, Hydata in 2018 partnered with Microsoft in launching a local incubation program in the eastern city of Hangzhou — one of more than 20 incubators Microsoft had introduced in collaboration with local governments and partners across China since 2015, according to a post on Microsoft Azure and Chinese media reports. Hydata has not updated its WeChat account since 2021.
Data Grand, the company that developed censorship and policing software before joining Microsoft’s program, co-organized an “open day” event with Microsoft in 2018 for tech workers to discuss AI applications, according to a post on the incubator’s WeChat channel. In 2021, it joined other alumni startups in a showcase event co-organized by Microsoft.
In 2022, Google launched a similar startup accelerator program in China, providing business seminars and its cloud services to help Chinese companies expand internationally, according to its website. One participant, smart glasses maker LLVision, had been providing AR (augmented reality) glasses since at least 2018 for police use, before joining the Google program in 2022, according to founder Wu Fei’s interviews with Chinese media and the Wall Street Journal.
The company also makes glasses that can transcribe conversations for people with hearing loss, according to its online product introductions. As part of the accelerator program, Google helped the startup in developing and marketing these smart glasses for overseas consumers, according to a blog post from the founder published on Google Cloud’s website.
The glasses that LLVision had already developed for police featured cameras and facial recognition technology that enabled officers to identify fugitives from a database of suspects and share live footage with their colleagues, the company said on its website. International media widely reported on the glasses when police used them at a busy train station in Zhengzhou in 2018.
A Congressional committee on China in early 2024 accused U.S. venture capital funds of investing in Chinese tech companies that support Beijing’s military and its repression of minorities in Xinjiang. The U.S. government is enacting new rules in January to restrict U.S. entities from investing in sensitive AI, quantum computing, and semiconductor technologies in China, which would enhance the country’s military and surveillance capabilities. Venture capital funds and tech companies are responding to the changing climate by spinning off China operations and reducing investments in the country.
Anti-China sentiment in Washington is so high that even if future restrictions on China investments are detrimental to the business of American companies, it’s unlikely that any of these companies will complain publicly, says Lewis, the former diplomat.
“No one is willing to be seen as soft on China …,” Lewis said. “The [incubation] programs are bound to get shut down.”
Additional Reporting by Viola Zhou
