Pentagon Bars Chinese Coders From Cloud, Orders Microsoft Audit

U.S. Defense Secretary Pete Hegseth said the Pentagon has halted the use of Chinese nationals to service its cloud-computing networks after discovering that Microsoft employed China-based engineers under a decade-old “Digital Escorts” arrangement. Hegseth described the practice as a “breach of trust” and confirmed that a formal letter of concern has been issued to the company. The Defense Department has ordered an independent, third-party audit of Microsoft’s code and of all submissions made by the Chinese engineers, at no cost to taxpayers. A parallel internal investigation will examine whether any malicious software or backdoors were introduced and will require every DoD software vendor to identify and eliminate Chinese involvement in Pentagon systems. Microsoft said in July it had already ended the practice, following scrutiny that included a ProPublica report; the company is one of four firms sharing a cloud contract worth up to $9 billion. Separately, Hegseth directed Army Secretary Dan Driscoll to stand up Joint Interagency Task Force 401, which will absorb existing counter-small-unmanned-aircraft efforts and report to Deputy Defense Secretary Stephen Feinberg. The new body will be able to approve individual counter-drone projects of up to $50 million and must deliver its implementation plan within 30 days, part of a wider push to tighten security across U.S. defense networks and airspace.