Microsoft will begin retiring Microsoft-provided SMS and voice authentication in Microsoft Entra ID on February 1, 2027, requiring affected organizations to migrate users or arrange alternative telecom delivery before enforcement starts. The change covers Worldwide and Government Community Cloud (GCC) environments, with rollout expected to finish in early February. Administrators should treat February 1 as […]
Researcher Orange Tsai from DEVCORE has published a complete exploit chain for Microsoft Edge that successfully escapes the browser’s sandbox and executes code on Windows. This exploit utilizes only logical vulnerabilities and does not involve any memory corruption. Tsai developed it for Pwn2Own Berlin 2026, where it earned a $175,000 award and later received the […]
OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella at OpenAI’s DevDay in November 2023. (GeekWire File Photo / Todd Bishop)
OpenAI generated $10 billion in revenue for Microsoft in the quarter ended Sept. 30, about 11% of the Redmond company’s total revenue, according to its quarterly filing Wednesday.
The amount is up sharply. In the fiscal year that ended in June, Microsoft recorded $24.1 billion in revenue from its business with OpenAI, or about $6 billion a quarter on average.
That $10 billion surpasses some of Microsoft’s longest-running businesses. Xbox brought in $5.4 billion in the quarter. Search and advertising, which includes its Bing search engine, generated $6.6 billion. Windows licenses sold through PC makers, along with Surface and other Microsoft devices, brought in $3.6 billion.
The total covers revenue-sharing payments from OpenAI, as well as other business between the companies, such as OpenAI’s use of Azure to train and run its AI models. Microsoft didn’t say how much came from each, or how much of Azure’s growth came from OpenAI.
Microsoft has begun disclosing its revenue from OpenAI because its stake of about 24% makes OpenAI a “related party” under accounting rules, requiring it to report the business they do with each other.
Microsoft first reported the number in its annual report in July, as a full-year total. This is the first time it has given a quarterly figure.
The original AI alliance: Microsoft first invested in OpenAI in 2019, eventually committing $13 billion, and became its exclusive cloud provider. ChatGPT ran on Azure when it launched in late 2022.
The companies have loosened their ties since then. OpenAI restructured as a public benefit corporation in October 2025, and Microsoft gave up its right of first refusal to supply OpenAI’s computing capacity. OpenAI committed to buy an additional $250 billion in Azure services. An April 2026 agreement gave OpenAI broader freedom to use other cloud providers.
OpenAI has also agreed to keep sharing revenue with Microsoft through 2030.
In addition, Microsoft sells access to OpenAI’s models to business customers through its Azure OpenAI Service, and the models became the foundation for its Copilot products, putting Microsoft at the front of the generative AI boom. That revenue comes from Microsoft’s own customers, so it isn’t part of the $10 billion.
Many customers, not a few: Asked by Bernstein Research analyst Mark Moerdler whether AI growth on Azure was coming from big businesses or AI-native companies, Microsoft CEO Satya Nadella didn’t mention OpenAI.
He said he doesn’t want Azure’s AI business to depend on a few big customers, and that broad adoption by businesses is just getting started.
Nadella described it as “a decade-long thing,” and contrasted it with relying on “four customers who buy a lot of capacity from you” to show a few quarters of growth. That, he said, is “not a business as far as I’m concerned.”
He added that Microsoft has large customers who want to buy capacity, “and as long as the pricing is right, we may sell them some. If not, we will be patient.”
Later in the call, Goldman Sachs analyst Gabriela Borges brought up the fact that OpenAI made up 11% of revenue. Nadella didn’t address the number but praised OpenAI’s latest models and said customers are increasingly mixing models from different companies, or training their own.
He cited Microsoft’s tools for routing each task to whichever AI model handles it best. If you use AI coding agents, Nadella said, you want Anthropic and OpenAI “to compete for your workload, not like once a quarter, but for every task.”
New risk language: Microsoft also expanded a warning in its quarterly filing about the risks of depending on outside AI providers. The company builds products such as Copilot on AI models from outside companies, including OpenAI and Anthropic. It now says it has “limited visibility into or control over” how those models are designed, trained, secured and tested.
Without naming OpenAI or Anthropic, the same section notes that some of these AI partners are also “significant customers of Azure,” and that the benefits Microsoft expects from those relationships “may not be realized or sustained.” It says those partners could change how much they buy, and that Microsoft itself may change how it allocates scarce data center capacity or prices it.
Microsoft is an investor in both companies. According to its latest filing, it owns about 24% of OpenAI, down from about 25% in June and about 27% after OpenAI’s restructuring a year ago, and has put $12.0 billion of a promised $13.0 billion into the company.
We know that buying Microsoft software can be an expensive endeavor, but it's also a necessity if you want to use the software that makes the world go round. From gaming PCs to work laptops, they all need Microsoft software to get the most out of them.
Microsoft broke out Azure’s quarterly revenue for the first time in its new financial structure. (GeekWire File Photo / Todd Bishop)
Microsoft’s Azure cloud business brought in $33.2 billion in revenue in the September quarter, up 48% from a year earlier, blowing past the company’s own forecast and beating Wall Street’s expectations.
The growth suggests that Microsoft is selling cloud and AI computing about as fast as it can install it. Azure revenue rose $10.8 billion from a year earlier, driven by demand for services across the platform, Microsoft said in its quarterly filing. That came even as some new data center capacity arrived late.
For investors worried about Microsoft’s record capital spending, it’s a sign that the company’s massive AI and cloud infrastructure buildout is turning into sales. Microsoft’s shares rose nearly 4% in after-hours trading following the earnings report.
Overall, Microsoft reported revenue of $92.3 billion for the first quarter of its 2027 fiscal year, up 19% and above the $90.75 billion analysts expected, according to Yahoo Finance. Earnings were $4.89 per share excluding the impact of its OpenAI investment, compared with expectations of $4.72.
It’s the first time Microsoft has reported Azure’s quarterly revenue figure, not just its growth. The disclosure is part of a new financial structure that took effect this quarter, splitting the company into two segments: Agents and Infra, and Devices and Consumer.
Agents and Infra (Azure, Microsoft 365, Dynamics, LinkedIn’s recruiting and sales tools, and server and productivity licensing): Revenue rose 25% to $76.8 billion, above Microsoft’s forecast of $75.15 billion to $75.75 billion. Operating income rose 24% to $40.6 billion.
Devices and Consumer (Windows, Xbox, and search and advertising): Revenue fell 3% to $15.5 billion, above Microsoft’s forecast of $14.7 billion to $15.2 billion. Operating income rose 2% to $5.4 billion.
Capital spending came in below Microsoft’s forecast. The company spent $45.2 billion, including finance leases, short of the more than $50 billion it expected. Some data center capacity that third parties were supposed to deliver in the quarter was delayed, the company said.
Google Cloud, which includes Google’s Workspace productivity apps, brought in $30.7 billion in revenue in the quarter, up 103% from a year earlier, Alphabet reported Wednesday afternoon.
Update, 3:05 p.m.:Microsoft expects Azure growth to accelerate again this quarter, to 49% to 50% excluding currency changes, CFO Amy Hood said on the earnings call. “Customer demand continues to exceed available supply,” she said.
Hood said Azure’s growth came from Foundry, Microsoft’s service for building AI apps and agents, and from engineering work that let Microsoft sell unused capacity on its existing servers. That helped make up for delays in new data center capacity that outside providers were supposed to deliver.
Those delays pushed some spending later into the fiscal year. Microsoft now expects to spend about $170 billion on capital expenditures in calendar 2026, down from about $175 billion. It expects to spend more than $50 billion this quarter, and Hood said spending will accelerate in the first half of calendar 2027.
Hood also said Microsoft may tap additional sources of financing to help pay for the buildout, “when we believe it is attractive to do so.” The company still expects to bring in more cash than it spends this fiscal year.
Microsoft’s expense forecast for the December quarter includes an estimate for the buyout offer it announced Monday, Hood said, though she didn’t give the amount.
The company expects total revenue of $96 billion to $97.1 billion for the December quarter, above the $95.7 billion analysts expected, according to Yahoo Finance.
Microsoft has never disclosed Azure's quarterly revenue in dollars. But for the first time, we can see just how close it is getting to besting the biggest competitor in the market, AWS.
Microsoft said it made $10 billion in revenue from commercial arrangements with OpenAI, including revenue-sharing payments, in the quarter ending September 30. It underscores the still-enormous financial dependency of the partnership.
Whatever the future of AI might be, the current situation is still very good for Microsoft. The tech giant reported yet another record for quarterly revenue on Wednesday: $92.3 billion, a 19% increase over the year-ago quarter.
Excel has hundreds of functions, and nobody needs to know them all. But a few are worth keeping in your back pocket because they save you headaches as your data changes. TRIMRANGE is a great example. When you build a spreadsheet that's going to grow, you usually leave room for data you haven't entered yet. Those empty cells can turn dynamic array results into a mess, but TRIMRANGE quietly trims the blank edges off a range and keeps things tidy.
Microsoft has released an emergency Windows update to remove trust in certificates associated with compromised eMudhra certificate authority keys. The out-of-band update, issued on October 26, 2026, eliminates seven certificates from the Windows trust list. Following this, the same removals were applied to Microsoft Edge on October 27, as stated by the Microsoft Security Response […]
Windows 11 26H2 extends Microsoft's support timeline without introducing a major OS overhaul. Here's how it compares with 25H2 on performance, compatibility, upgrade requirements, and enterprise deployment readiness.
Windows 11 26H2 extends Microsoft's support timeline without introducing a major OS overhaul. Here's how it compares with 25H2 on performance, compatibility, upgrade requirements, and enterprise deployment readiness.
An alleged Microsoft whistleblower has raised concerns regarding overseas engineers accessing U.S. government cloud information through the company’s “escort” support process. Screenshots mentioned in an October 28 post by the X account Conspiracookie allegedly show approval for an engineer based in India to view logs associated with Microsoft’s Government Community Cloud (GCC). However, these claims […]
The Cybersecurity and Infrastructure Security Agency (CISA) offers two free assessment tools, ScubaGear and ScubaGoggles, to help organizations identify insecure configurations in Microsoft 365 and Google Workspace. Developed under the Secure Cloud Business Applications (SCuBA) project, these tools compare cloud tenant settings against established security baselines and generate reports that highlight configuration gaps. CISA established […]
— Xbox Chief Operating Officer Helen Chiang has suddenly left Microsoft after 21 years with the company, just months after landing the role in July. Her past roles include leading Mojang and the Minecraft franchise.
Verge first reported the news on Friday, citing a memo from Xbox CEO Asha Sharma that did not disclose the reason for her departure.
An Xbox spokesperson was likewise mum on details. “We don’t discuss individual personnel matters. We’re grateful for Helen’s years of service and wish her well,” the company said in an email to GeekWire.
Xbox has undergone a massive reorganization that included Chiang’s appointment, roughly 3,200 job cuts through the fiscal year — about 20% of the Xbox workforce — the spinoff of four game studios and a plan to dramatically flatten management.
Philip Su. (LinkedIn Photo)
— Seattle-based tech leader Philip Su has joined Anthropic as a member of technical staff on beneficial deployments. The management role focuses on AI applications in global health, life sciences, economic mobility and education.
Su started his tech career with 12 years at Microsoft and later worked for Facebook. He has launched multiple ventures, including Audere, a global health software nonprofit, and Superphonic, a podcast player. In 2021, he worked at an Amazon fulfillment center to experience the holiday rush.
Su also created and leads an annual course for University of Washington computer science students on how to maximize their personal and professional growth.
SeekOut President John Tippett, left, and CEO Aravind Bala. (SeekOut Photos)
— More leadership changes are underway at SeekOut, a Bellevue-based recruiting startup launched in 2017. The company announced Monday that co-founder John Tippett is now president, moving from his role as chief client officer.
In April, SeekOut CEO and co-founder Anoop Gupta retired and passed the reins to enterprise software veteran Sean Thompson. In August, co-founder and chief technology officer Aravind Balatook over as CEO. Thompson is now listed as an adviser to the board.
Tippett will lead day-to-day operations and work with Bala “on the company’s direction,” according to a press release. SeekOut said it wants to integrate AI tools into customers’ operations to reduce recruiters’ workload.
SeekOut is No. 68 on the GeekWire 200, a ranked index of the Pacific Northwest’s top startups.
Merritt joins from Penn Medicine, where he was chief operating officer of Penn Signature Services. He has more than 25 years of experience in academic medicine, consulting, strategy, business development and operations.
— Industrial wastewater treatment startup Membrion has named Alexander Demihovsky as director of applications engineering. He joins the Seattle-based company from Xylem. His past employers include Evoqua Water Technologies and Bechtel National.
“Alex helps turn customer needs into viable project plans, mitigate execution risks and develop competitive proposals,” the company said.
— Marine geothermal energy startup Endurance Energy has named Marty Calvert as the director of turbomachinery. Calvert joins the Seattle startup from Blue Origin. He was previously a turbomachinery engineer at NASA for more than 13 years.
Endurance completed its fifth deployment to the ocean floor last month, testing Adélie, a 100-kilowatt geothermal generator named for a penguin.
— Lattice Semiconductor, a Hillsboro, Ore.-based company, has added two directors to its board:
Raejeanne Skillern, former VP and chief marketing officer of Amazon Web Services, who returns to Lattice after serving on the board from 2022 to 2024
John McCool, senior vice president and special adviser to the CEO at Arista Networks
Satya Nadella & Co. report quarterly earnings under a new financial structure Wednesday. (GeekWire File Photo / Kevin Lisota)
Update, 10/28: Microsoft’s Azure cloud business brought in $33.2 billion in revenue in the September quarter, up 48% from a year earlier, blowing past the company’s own forecast and beating Wall Street’s expectations. Read the full story.
Microsoft’s earnings report Wednesday will come two days after the company offered buyouts to about 60,000 people, roughly a quarter of its employees. The call gives executives their first chance to say what the offer will cost, and to explain how it fits with the company’s long-term view of its workforce.
Whether or not they go into those details, it’s one of several issues to watch in Wednesday’s report, the first under Microsoft’s new reporting structure. Anthropic’s IPO filing on Monday adds another storyline, showing how much the Claude maker has agreed to spend on Microsoft’s cloud.
Coming into the report, Microsoft’s stock is near its high. Microsoft closed Monday at $532.60, about 2% below its record close of $543.45 on Oct. 13, after gaining roughly $1.4 trillion in market value since late June.
Here are the key numbers and issues heading into Microsoft’s results for the first quarter of its 2027 fiscal year, ended Sept. 30.
Core numbers: Analysts expect revenue of $90.75 billion, up nearly 17% from a year ago, and earnings of $4.72 per share, up 14%, according to Yahoo Finance. Microsoft’s own forecast was $89.85 billion to $90.95 billion, so Wall Street is looking for a result near the top of that range.
In July, Microsoft reported $90 billion in revenue for the June quarter, well above the $87.7 billion analysts expected.
A new scorecard: Microsoft announced in September that it would sort its business into two groups instead of the three it had used since 2015. This is the first quarter under the new setup.
The first, dubbed Agents and Infra, includes Azure, Microsoft 365, Dynamics, LinkedIn’s recruiting and sales tools, and server and productivity licensing. It brought in 81% of Microsoft’s revenue and 88% of its operating income in fiscal 2026, based on figures Microsoft recast under the new structure.
Microsoft expects Agents and Infra revenue of $75.15 billion to $75.75 billion this quarter, which would be growth of about 22% to 23%, by GeekWire’s calculation.
The other group, Devices and Consumer, includes Windows, Xbox and search advertising. Microsoft expects it to bring in $14.7 billion to $15.2 billion, down 5% to 8% from a year earlier.
Azure, in dollars: Microsoft started disclosing Azure’s annual revenue last year, when it passed $75 billion, and topped $100 billion in fiscal 2026. Starting this quarter, it reports the figure every quarter. It also changed what counts as Azure: GitHub’s cloud business and Security Copilot now fall under Microsoft 365, and its healthcare cloud moved to a new industry unit.
Counted that way, Azure brought in $29.4 billion in the June quarter, up 42%. Microsoft expects growth of 44% to 45% this quarter, not counting currency fluctuations, which would put Azure at roughly $32 billion, by GeekWire’s calculation. That compares with the roughly 45% Microsoft projected in July, under the old definition.
Hitting that forecast may not be enough. Investors are looking for about 46%, BNP Paribas analyst Stefan Slowinski wrote in a note Monday. In January, Azure beat Microsoft’s own forecast and the stock still fell 10%, because investors had privately expected more.
“Azure moves the stock, but the read that matters is whether capacity is absorbed as fast as it lands,” wrote Dan Ives of Yorkville Ives in a note last week.
Capital spending: Microsoft expects capital expenditures of more than $50 billion for the quarter, which would be a record. That’s up from $41 billion in the June quarter and $34.9 billion a year earlier.
An accounting change reduces what Microsoft reports as capital spending, without reducing its planned investment. Microsoft now assumes its data center buildings will last 25 years instead of 15. As a result, more of its data center leases will be classified in a way that doesn’t count as capital spending, CFO Amy Hood said on the July earnings call.
That change alone lowered Microsoft’s capital spending estimate for calendar 2026 to about $175 billion, from the roughly $190 billion it projected in April. Hood said the company’s actual spending plans hadn’t changed.
Cloud margins: Microsoft Cloud gross margin came in at 65% last quarter, better than expected but down from a year earlier. Microsoft said it expects the figure to be relatively stable this quarter. It also expects operating margins to be roughly flat with a year ago.
Workforce: The new “voluntary exit” offer, announced Monday by Chief People Officer Amy Coleman, covers participating teams in the U.S., Canada, the U.K. and India. It has no age or tenure requirement and extends to some vice presidents. Employees have until the first week of December to decide, and Microsoft hasn’t said how much the offer will cost or when it will record the charge.
For the spring retirement program, Hood disclosed the cost on the April earnings call: about $900 million, with roughly $350 million in cost of revenue and $550 million in operating expenses. The charge showed up in the following quarter. About 30% of the 8,750 eligible employees accepted.
The new offer is less generous. It matches Microsoft’s standard severance, without the extended healthcare of the spring program, and the company expects a much smaller share of people to take it. But the pool of eligible employees is nearly seven times larger.
Microsoft says the offer doesn’t mean it needs fewer people. Coleman said in July that the company was studying whether to make voluntary exits a regular part of managing its workforce. It has told investors to expect operating margins roughly flat this quarter and down less than a point for the full fiscal year, even with record capital spending.
Nadella has addressed this before. In a July 2025 memo to employees, after Microsoft laid off about 15,000 people, he acknowledged the “uncertainty and seeming incongruence” of thriving financially while cutting jobs. “This is the enigma of success in an industry that has no franchise value,” he wrote.
In his annual shareholder letter last week, he focused on Microsoft’s spending on AI infrastructure. “Based on the demand we see and the efficiencies we are driving, I am confident in the long-term returns on our investments,” Nadella wrote. “We are building against a growing book of business tied to this secular shift.”
Copilot: Microsoft said in July that businesses were paying for more than 30 million Microsoft 365 Copilot seats, up from 20 million in April. That’s still only about 7% of the more than 450 million commercial Microsoft 365 seats.
The bigger change is in how Microsoft charges for Copilot and its other AI tools. In July it added usage-based billing alongside per-seat pricing. It’s also pushing customers toward E7, a new premium bundle that includes Copilot. Microsoft expects Microsoft 365 commercial cloud revenue to grow about 17% this quarter, not counting currency swings, a number that now includes GitHub.
The BNP Paribas analyst Slowinski, who attended Microsoft’s Frontier Tour event in London last week, wrote that partners are seeing more customers roll out Copilot company-wide. Partners also told him that Microsoft now ties 35% of E7 sales incentives to how much customers use features like Cowork.
Anthropic and OpenAI: Anthropic’s S-1 filing shows the company has committed to spend at least $44.9 billion with Microsoft from November 2026 to May 2033, up from the $30 billion Azure commitment announced last November. That’s well below its minimum commitments to Amazon ($110 billion) and Google ($114.5 billion).
Microsoft agreed last year to invest up to $5 billion in Anthropic. Its results for the June quarter included a $3.2 billion gain on that investment.
OpenAI remains the bigger factor. Microsoft’s commercial remaining performance obligation (RPO), the measure of signed contracts it hasn’t yet delivered on, reached $678 billion last quarter, up 84% from a year earlier. Without OpenAI, the backlog grew 25%. OpenAI told investors its annualized revenue approached $50 billion at the end of September, The Information reported, lower than earlier reports of about $70 billion.
Windows: Microsoft expects revenue from Windows licenses sold to PC makers, along with its own devices, to fall a little more than 20%. Higher memory prices are making PCs more expensive, and PC makers are still working through extra inventory.
What’s next: Alphabet also reports Wednesday afternoon, and Amazon reports Thursday, setting up a side-by-side look at Azure, Google Cloud and AWS.
For years, Windows 11 has handled camera and microphone access for desktop apps like a master key—flip the switch and every program gets in, or none do. Microsoft is finally working on a solution for the latest Windows 11 Insider build. The new privacy controls allow you to decide which desktop apps get to use your camera and microphone, one at a time. If you use an Android phone, you'll find the per-app permission settings feel familiar. This matters because camera and microphone access can reveal more than you might expect across varied software.
Microsoft Copilot Notebooks turns project files into working drafts. Check feature access, source accuracy, sharing permissions, and review time before adoption.
Microsoft Copilot Notebooks turns project files into working drafts. Check feature access, source accuracy, sharing permissions, and review time before adoption.
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