U.S. Defense Secretary Pete Hegseth said on Aug. 27 that Chinese nationals are no longer permitted to work on the Pentagon’s cloud computing systems and that the Department of Defense has issued Microsoft Corp. a formal letter of concern for allowing the practice. Calling the arrangement a “breach of trust,” Hegseth said the Pentagon will require a third-party audit of Microsoft’s so-called “digital escorts” program, which for years paired U.S. contractors with engineers based in China to maintain sensitive Defense Department networks. The action follows a July investigation by ProPublica that revealed the extent of Microsoft’s reliance on China-based engineers. Microsoft has since told the Pentagon it has terminated those teams, but Hegseth said an independent review will examine all code written under the program and determine whether any vulnerabilities were introduced. Alongside the audit, the Defense Department has launched its own inquiry into the program and ordered every software vendor serving the Pentagon to identify and end any Chinese involvement in their work. Microsoft is one of four primary contractors on the department’s $9 billion Joint Warfighting Cloud Capability contract, underscoring the potential impact of the directive.