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.

Azure revenue rose 48% to $33.2 billion in the quarter, beating Wall Street’s expectations and the company’s own forecast of 44% to 45% growth.

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.

Microsoft, for its part, now builds its own AI models and offers models from Anthropic and others.

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.

In addition, Microsoft agreed last year to invest up to $5 billion in Anthropic, and its results for the June quarter included a $3.2 billion gain on that investment. Microsoft hasn’t disclosed the size of its Anthropic stake, and Anthropic’s IPO filing earlier this week didn’t specify it either.

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.

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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.”

Microsoft had about 223,000 employees as of June 30, before it cut 4,800 jobs in July and more in September. The Information reported this month that Azure President Girish Bablani told leaders in his group to find ways to cut costs by at least 20%. Microsoft called the report inaccurate and said Azure leadership had not directed teams to develop cost-cutting plans.

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.

Anthropic is aiming to go public the week of Nov. 16, according to the Wall Street Journal.

Check back Wednesday afternoon for coverage.

The name Frank X. Shaw isn’t as well known outside the company as those of Microsoft’s other senior leaders, and that’s the nature of the job. But behind the scenes, the company’s longtime communications chief has shaped its public image for nearly three decades, working for all three of its CEOs and handling its biggest stories along the way, from antitrust to AI.

Shaw announced in September that he’s leaving Microsoft at the end of the year. On this week’s GeekWire Podcast, he sits down for what amounts to an exit interview. We’re joined in the conversation by longtime Microsoft beat reporter Mary Jo Foley, editor in chief of Directions on Microsoft and a GeekWire contributing writer.

Shaw talks candidly about working for Bill Gates, Steve Ballmer and Satya Nadella, and about the situations he’d handle differently. He describes his behind-the-scenes dealings with some of the top reporters in tech, from an executive’s objection to a single word to the heated argument that changed how he saw his job.

He also reflects on how communications and media are changing in the AI era, and explains why trust still comes down to a belief in the person telling the story.

Listen below, and continue reading for highlights.

On Microsoft’s three CEOs: Shaw says intensity is what the three have in common, expressed differently: “Steve was outwardly intense. Satya is quietly intense, and Bill is cuttingly intense.”

Ballmer was the hardest to explain to the public, he says, because the loud-salesman caricature hid a thoughtful, detail-oriented leader who often played the boisterous public role because Microsoft’s sales force needed it.

On the clarity of hindsight: Big decisions look obvious once they work out, Shaw says. His example is the board’s choice of Satya Nadella as CEO. It’s seen as a no-brainer now, but at the time there was a lot of debate, there were other candidates, and it was a hard, complicated decision.

“When you get a decision right, it always looks easy afterwards,” he says. “If you get it wrong, you were just an idiot all along.”

On speaking up: A communications leader should weigh in when a decision could damage the brand, Shaw says, and he learned that the hard way.

When Mary Jo asks how he decides when to push back on executives, she raises the Kin as an example. Shaw says he thought the phone would fail. It was late to market, and it would cost more than people expected because it required a data plan. Engineers he talked to had their doubts, too.

But when Ballmer went around the table asking whether to launch it, Shaw stayed quiet, unsure a communications executive had standing to weigh in. Microsoft pulled it within weeks.

In hindsight, he says, framing it as a brand risk would have given him standing to speak: if the Kin failed, it would cause significant brand damage and hurt Microsoft with the younger audience it was trying to reach. He doubts speaking up would have changed the decision, but says he would have felt better about it.

On underestimating a story: A story that doesn’t get much initial attention can still define a company for years. Shaw’s example: Vanity Fair’s 2012 “lost decade” story.

As he recounts it, reporter Kurt Eichenwald told him, “If you don’t give me Steve and Bill, I’m just going to write a hit piece,” and then did. Shaw says he should have escalated to Vanity Fair sooner, and he underestimated how a story that got little immediate pickup would shape how reporters described Microsoft for the next four years.

On narratives: Continuing on that theme, Shaw says facts can be disputed but “narratives are sticky,” and a company can only change one by changing its own behavior. In the 2000s, he says, every story described Microsoft as “a convicted monopolist,” and ending stack ranking was part of how the company moved past the lost-decade image.

On what makes a good story: Shaw recalls having a shouting match with Rob Guth, then a Wall Street Journal reporter, over an article Shaw no longer remembers. It got heated enough that Shaw pulled his car over in Madison Park to keep arguing. (Guth now works as a writer and researcher for Bill Gates.)

Guth told him he was bad at his job because he thought the job was getting positive stories. What Shaw should want, Guth said, were interesting stories that showed something real about the company. Some would be less flattering, but they would be more memorable.

Shaw told him he was wrong. But after thinking it over, he concluded Guth was exactly right. A story about a product built perfectly that everyone loves is boring, he says. “That’s like the plane landed safely. Nobody cares.” The coverage worth hoping for illuminates part of the company in a memorable way, and that always comes with tension.

On taking risks with reporters: Cooperating on a story you can’t control is a risk worth taking when the result shows something real about the company, Shaw says. Asked by Mary Jo for an example, he points to The New Yorker’s long piece on Microsoft’s relationship with OpenAI, featuring Kevin Scott, the Microsoft chief technology officer.

Microsoft agreed to it knowing that the writer, Charles Duhigg, would talk to many people and test a thesis along the way, so there was no telling what would come out. Then Sam Altman’s brief ouster from OpenAI happened right before the story went to press. It was a risky story, Shaw says, but it captured the company at a revealing moment.

On corrections: Shaw’s test is whether something is “irritating” or “damaging.” Only factual errors that matter are worth pursuing, he says.

His example is a Bloomberg story by Dina Bass that described an executive as having “wooed” customers. The executive hated the word and wanted it changed, so Shaw made what he calls the run up the hill, pressing Bass on the exec’s behalf and asking her to check with her editors.

She pointed out that she hadn’t quoted the executive using the word, and the editors left it alone. The executive didn’t like it, Shaw says, but it wasn’t wrong.

On speaking with one voice: Shaw says a big part of his job was trying to ensure that a company of Microsoft’s size made sense to the world.

He recalls a Seattle Times reporter who got 26 pitches from Microsoft in one week and asked him which ones Microsoft thought were important. Sending pitches indiscriminately was a mistake, he says. The company needed to decide what three or four things mattered most and focus its messaging on those.

On building in public: Asked about recent internal memos pointing Microsoft toward more voices and less central messaging as he departs, Shaw says the company already has many employees talking about its products on LinkedIn, X and Reddit, and that’s a good thing.

Someone from Microsoft answering questions in a Reddit Excel thread doesn’t need to be babysat by the communications team, he says. He sees it as a continuation of what Microsoft did with Channel 9 and thousands of MSDN blogs.

At the same time, he says, there are moments, such as a big event or a major launch, when the company needs to break through.

“Every once in a while you want the world to know Microsoft had something to say today,” he says. That’s hard, it takes real effort, and it can’t happen every week or even every month, so the company has to pick those moments and do them right.

On AI and the media: AI can help spokespeople prepare, Shaw says, but asking it what Mary Jo will ask, for example, produces “generic Mary Jo questions.” The best interviewers, he says, deliberately avoid the predictable question.

On reporters’ styles: Preparing a spokesperson means knowing how a particular reporter works, Shaw says, and that comes from people who have sat through many of their interviews. His example is Steven Levy, the veteran tech journalist and Wired editor at large, who Shaw says can lull you with 10 minutes of easygoing conversation, then hit you with one sharp question after another.

Other reporters always sound negative in interviews but write straightforward stories, he says, and an executive who reads too much into the tone risks getting knocked off their game.

Asked to name the toughest reporter he has dealt with, Shaw pushes back on the label. Good reporters are tricky to work with because their job is to find things out and surprise you with what they know, he says. That doesn’t make them tough. What makes a situation difficult is usually a story with real conflict and tension, not the reporter.

On Microsoft in the AI era: Shaw sees AI in a transitional moment, moving away from a constant focus on the models themselves. Right now, he says, every new model release or manifesto makes everyone stop and look.

He hopes the attention will shift from new models to whether AI is actually useful, and he says that’s where Microsoft has historically been strongest.

Acknowledging that he’s still on the payroll and rooting for the company, he offers an analogy that will resonate with anyone who learned to drive a stick shift. The AI model companies want to drop a bigger, more powerful engine into businesses, and the result is often a lot of grinding of gears.

“We’re the clutch,” he says. Microsoft’s infrastructure, in his telling, lets companies absorb that power and get moving without the disruption of a new engine and a demand to go 110 miles per hour.

On journalism: “People trust what they hear because they trust the people,” Shaw says. Deep knowledge of a beat becomes more valuable as the world gets more transactional, he says, even as the business behind it becomes less sustainable.

On what’s next: Shaw plans to take some time off and isn’t making any big decisions. People have suggested consulting, another big communications job or board seats, he says, but he doesn’t want to rush into anything.

Mary Jo has a suggestion: run PR for OpenAI, “because man, they need somebody to help.” Shaw’s characteristically dry reply: “That would be such a low-stress job.”

Related links

• Microsoft comms chief Frank Shaw to exit after nearly three decades shaping the company’s message
• Internal memos: Microsoft shakes up communications as Nadella makes a push to build in public
• Microsoft’s ‘lost decade’: Vanity Fair piece accurate but incomplete
• Frank X. Shaw: Things I’m Thinking About
• Mary Jo Foley’s GeekWire stories

Edited and produced by Curt Milton; Music by Daniel L.K. Caldwell. 

When Stripe co-founder John Collison interviewed Satya Nadella on his company’s podcast last fall, he asked the Microsoft CEO for advice on building a platform business. Collison will soon get to see how Microsoft does it up close.

Collison, 36, the co-founder and president of the Bay Area-based payments platform, has been nominated to Microsoft’s board, the tech giant disclosed Wednesday in its annual proxy statement.

He would fill one of two board seats opening up at Microsoft’s Dec. 8 annual meeting. LinkedIn co-founder Reid Hoffman said in June that he would leave, and the proxy reveals that Disney CFO Hugh Johnston, who chairs the board’s audit committee, is not seeking re-election either. Both have served on the board since 2017.

The proxy also notes that former EY CEO Carmine Di Sibio, appointed to the board in May, will stand for election by shareholders for the first time.

Microsoft’s board currently has 13 members, including Di Sibio. With Hoffman and Johnston leaving and Collison joining, it will go back to 12, the same number it had before Di Sibio joined in May.

Microsoft says Collison “brings extensive entrepreneurial and operational experience, along with deep expertise in technology.” He started Stripe with his brother, Patrick, in 2010, and businesses using Stripe processed $1.9 trillion in payments in 2025. Collison does not sit on any other public company board.

The board determined that he is independent, after considering ordinary business dealings between Microsoft and companies tied to its directors. The proxy doesn’t mention any business between Microsoft and Stripe, but the two companies already work together.

Stripe helps power Copilot Checkout, which Microsoft launched in January to let U.S. users of its AI assistant buy from Etsy sellers and other retailers without leaving the chat. In 2023, the companies teamed up to let businesses take card payments for paid events in Microsoft Teams.

The companies’ work together came up in the November episode of Stripe’s “Cheeky Pint” podcast. Collison said Stripe was building a platform business in agentic commerce, in which AI agents shop and pay on behalf of people, and asked Nadella what advice he had for a company building in such an early market.

Nadella said the key would be making it simple for small merchants to sell through AI agents, without asking them to set up servers or adopt a string of new technical protocols themselves.

The relationship goes back years. Nadella said he first visited Stripe’s San Francisco office when he was running Microsoft’s cloud business, before he became CEO.

He said Stripe reminded Microsoft of something it had once been good at, “following the developer, being where the startups are,” and said that thinking “led me even to GitHub,” the code-sharing platform Microsoft acquired in 2018 for $7.5 billion.

Microsoft is winding down The Garage as a companywide program, ending a 17-year run for the effort that gave employees space and tools for side projects and ran the company’s Global Hackathon, according to an internal FAQ viewed by GeekWire.

The program, with a flagship location on Microsoft’s Redmond campus and more than a dozen other sites from Vancouver, B.C., to Beijing, became part of the company’s push for a more experimental culture under Satya Nadella, who took over as CEO in 2014.

In the FAQ, Microsoft says the experimentation that started in dedicated programs and spaces like The Garage now happens “every day within each of our teams,” as employees build new skills and adopt new tools in their regular work. The FAQ says the company is “reinventing how we foster innovation, learning, and experimentation” across Microsoft.

The move comes as Microsoft spends heavily on AI, much of it for data centers and other infrastructure, while cutting costs and jobs in other parts of the business.

“We regularly evaluate how we use our physical spaces to best support our employees, customers and partners,” a Microsoft spokesperson said in a statement. “As part of that ongoing work, we’re making changes to some Garage spaces. Innovation and a builder mindset remain central to how we work every day.”

The company declined to comment further, including on the effect on Garage employees.

The Garage will no longer operate “as a centralized function,” according to the FAQ, and the impact on each physical space “will vary by location.” Some Garage spaces could be restricted as early as Friday, Oct. 23. Neither the FAQ nor Microsoft’s statement says which spaces are affected, including the flagship location in Redmond. Employees can’t take equipment, tools or materials with them.

The future of the Global Hackathon is also unsettled. The FAQ says the hackathon team is “reimagining the program” and that Microsoft will have more to share later.

Microsoft’s public Garage website, which showcased hackathon projects and experimental apps, was redirecting to the Microsoft homepage as of Tuesday morning.

Other longtime fixtures of Microsoft’s campus have closed this year. The company shut down its campus libraries in Redmond, Hyderabad, Beijing and Dublin in January, describing the move as a shift to a “modern, AI-powered learning experience,” and closed its Visitor Center in Redmond’s Building 92 a month later.

From Office Labs to companywide: The Garage started in 2009 inside Microsoft’s Office Labs group in Redmond, with the slogan “Doers. Not Talkers.” The idea was to support employees who were already building their own projects, rather than collecting ideas and funding the most popular ones.

The program took on a bigger role under Nadella. In July 2014, The Garage ran Microsoft’s first companywide hackathon, which drew more than 11,000 registrants from 80 countries. The event became an annual fixture of Microsoft’s culture.

The Garage also released experimental apps to the public, including Mouse without Borders, a tool for controlling multiple PCs with one keyboard and mouse, and Arrow Launcher, which became Microsoft Launcher for Android.

As of this year, Microsoft listed Garage locations in 15 regions, including Redmond, Vancouver, B.C., the Bay Area, New York City, Ireland, Israel, India and Beijing.

Employee reaction: On Blind, the anonymous workplace app that verifies users’ employers, a post titled “Amy kills the Garage” drew more than 70 comments. The poster attributed the move to cost-cutting by Microsoft CFO Amy Hood.

Another employee wrote that The Garage was where they met their friends on campus and made connections that advanced their career.

“The Garage offices were one of the last few cool things about Microsoft,” one commenter wrote.

Microsoft is coming out with new security tools that treat AI agents as potential insider threats, continuously assessing their risk and restricting their access when something changes.

The features, announced Monday, are part of Microsoft 365 E7, the company’s top-tier bundle of workplace software and AI tools, and its Project Perception security system.

They escalate the company’s competition with rivals such as Google, Amazon Web Services, CrowdStrike and Okta to become the system businesses use to control their AI agents.

Microsoft’s new features come amid a steady stream of news about AI agents doing things they weren’t supposed to do, including high-profile reports from Anthropic about test agents taking unauthorized actions on government websites, and from OpenAI about agents escaping test environments and stealing credentials.

The move builds on Microsoft CEO Satya Nadella’s Oct. 10 blog post arguing that the controls on AI models need to come from outside the models themselves.

“The most trustworthy Super Intelligence system will not be the one with the model we trust most,” Nadella wrote. “It will be the one that enables us to trust the model the least.”

Microsoft’s tools include a continuously updated risk assessment for each agent, based on signals such as what data it can reach and whether its actions are starting to depart from the task it was given. When the risk level rises, the system can take away the agent’s ability to make changes while still letting it read data, require a person to approve a high-stakes step, or shut the agent down.

In addition, the company is expanding its ability to find AI agents running on employees’ computers, increasing the number of agent types it can detect to 60, up from 25. The list includes popular tools such as Anthropic’s Claude Code, OpenAI’s Codex and GitHub Copilot.

Microsoft is also adding “Guardian Agents” to Project Perception, an AI security system it unveiled in July that uses AI agents to find and fix security problems. The new agents can investigate why another agent’s risk changed and recommend or take steps to contain it.

The company’s new features are in private preview, with broader availability planned for Microsoft’s Ignite conference, Nov. 17-19 in San Francisco.

The E7 licensing level, which launched in May, costs $99 per user per month. It also includes the Microsoft 365 Copilot AI assistant, the company’s E5 suite of productivity and security tools, its Entra Suite identity tools and Agent 365, a service for managing AI agents.

Microsoft President Brad Smith says someone apparently “failed to inform the vice president accurately about our numbers” before the Trump administration cut off the company’s ability to sponsor foreign workers for permanent residency.

In an interview with Politico, published Thursday, Smith rejected Vice President JD Vance’s accusations of fraud and called his claim that Microsoft replaced laid-off Americans with foreign workers “completely off base.” He said Microsoft has “always been committed to a high integrity and high compliance” approach to immigration.

“We will stand by our record,” Smith said. “And I hope that folks at the White House might look again and look at what we think is a more accurate picture.”

At a White House news conference last week, Vance said Microsoft laid off 6,000 American workers last year while receiving 6,300 H-1B visas and nearly 3,000 green cards.

“If you do the math, for every worker that Microsoft laid off, they replaced that worker with one and a half foreign indentured servants,” Vance said, after asserting that there “has been no company in the United States, unfortunately, that has abused the system more than Microsoft.”

Critics of the visa programs say tech companies have used them to displace U.S. workers, and that the job ads companies must run before sponsoring workers for green cards often appear in places few American job seekers will see. Labor Department records show Microsoft’s required print ads ran mostly in The Seattle Times.

Smith said most of Microsoft’s recent visa and green card applications were for people already working at the company, many of them for years, because of long green card backlogs. He also said Microsoft hired 9,200 American workers in its last fiscal year, a number he said was “left out of the narrative.”

The Microsoft executive also rejected the idea that the company pays visa holders less. “It doesn’t matter whether you came on a visa or you’re an American worker,” he said. “Everybody has the same compensation system.”

He warned that the crackdown could send “the most talented next wave” of engineers to other countries. Five of the six tech leaders President Trump honored with national medals last week, including Microsoft CEO Satya Nadella, came to the U.S. as immigrants, Smith noted, and their companies together account for more than 25% of the value of the S&P 500.

“Let’s not put that at risk,” he said.

The suspension doesn’t stop Microsoft from hiring foreign workers on H-1B visas. Those are temporary work visas, typically granted for three years at a time and generally limited to six.

Amazon led in H-1B approvals for new employment in fiscal 2025, with 4,644, followed by Meta with 1,555 and Microsoft with 1,394, according to an analysis of USCIS data by the National Foundation for American Policy.

What Microsoft lost is access to a key step toward permanent residency. The program, known as PERM, is run by the Labor Department. Companies use it to sponsor foreign employees for permanent residency, also known as a green card. The employer has to advertise the job and show the department that no qualified, available U.S. worker can fill it.

PERM is commonly used for employees already working in the U.S. on temporary visas, including H-1Bs.

The interview didn’t address Microsoft’s outsized use of PERM. The company had more PERM cases decided than any other employer in fiscal 2025 and the first nine months of fiscal 2026, according to a GeekWire analysis of Labor Department data. Other big tech companies, including Amazon and Google, sharply reduced their PERM filings after early 2023.

In less than four months, Microsoft has added roughly half an Amazon to its market value.

The tech giant’s stock has gained about $1.4 trillion in value since early summer, rising from $352.83 on June 25, its lowest close in more than a year, to a record close of $543.45 on Tuesday, giving it a market value just above $4 trillion. The increase over that period is nearly as much as Tesla is worth.

As stock turnarounds go, it’s extraordinary. In January, Microsoft lost $357 billion in a single day, the biggest one-day drop in its history, as investors worried about the company’s AI spending and its reliance on OpenAI. By midsummer, Microsoft was the worst performer this year among the big tech stocks known as the “Magnificent Seven,” according to Morningstar.

The rebound accelerated in late July, when Microsoft reported that Azure, its cloud platform, grew 43% and topped $100 billion in annual revenue. The stock jumped 15.5% the next day. It has mostly kept climbing since, as Microsoft rolled out a revamped Copilot app, a new AI push for Windows and new AI chips.

Microsoft isn’t rising alone. The broader stock market has also been hitting record highs, led by AI stocks. The S&P 500 closed above 7,800 for the first time last week, even as the benchmark 10-year Treasury yield reached its highest level since 2002.

Microsoft CEO Satya Nadella has been making a broader pitch along the way. In an essay posted on X in July, he warned that companies relying on outside AI labs “pay for intelligence twice, once with money, and again with something even more valuable,” meaning their own knowledge.

He urged businesses to keep control of that knowledge and avoid tying themselves to any one AI model. Microsoft sells access to models from OpenAI, Anthropic and others, along with its own.

Last weekend, he took up a related theme, calling on X for an “emergency brake” on advanced AI models. That means “separating the model from the harness that orchestrates its work,” he wrote. “We must assume a model is compromised and contain it from the start.”

The message also fits Microsoft’s business interests. As companies use AI models from multiple providers, the advantage could shift to companies like Microsoft that run the cloud and workplace software where businesses keep their data.

Microsoft reports its next quarterly results Oct. 28.

Microsoft plans to run most of its AI services on chips it designs itself, a shift that could save the company billions of dollars and reduce its dependence on industry juggernaut Nvidia.

The company on Monday unveiled Maia 300, the third generation of its custom AI chip, saying it will begin large-scale deployments in 2027. In a blog post, Azure chief Scott Guthrie said Maia will become “the primary AI inference system for Microsoft products and services.”

Microsoft CEO Satya Nadella called it “our biggest bet yet on our own silicon” in a post on X.

Maia 300 will produce 40% more AI output for the same amount of power as leading GPU-based systems, which Nvidia dominates, according to the company.

A full rack of the new chips will produce up to seven times as much AI output as the current generation, the company says. They’re designed for the kinds of tasks that are growing fastest, such as AI agents that work through multistep jobs and models that handle long documents or conversations.

The Redmond company designs the chips and relies on Taiwan Semiconductor Manufacturing Co. (TSMC) to make them, rather than buying finished chips from Nvidia. More-efficient chips also let Microsoft run AI services using less electricity, at a time when power supply has become one of the biggest constraints on AI expansion.

Microsoft and Nvidia remain big partners. Nadella and Nvidia CEO Jensen Huang shared the stage last week to launch Windows PCs built on Nvidia chips. Nvidia also remains a key supplier for Microsoft’s data centers, and Nadella said on the company’s July earnings call that Microsoft will be among the first cloud providers to deploy next-generation systems based on Nvidia’s Vera Rubin and AMD’s Helios.

Microsoft’s move is part of a larger trend among tech giants to design their own AI chips. Google has started selling its Tensor Processing Units directly to some customers, and Amazon has won over AI companies including Anthropic with its Trainium chips. Meta has rolled out its own AI chips, and OpenAI unveiled its first custom chip, built with Broadcom, in June.

Microsoft has been playing catch-up. Unlike Google’s and Amazon’s chips, Maia isn’t available for outside customers to rent. Microsoft’s first Maia chip, announced in 2023, was followed by a second-generation Maia 200 this January after delays. As of this summer, Maia 200 was running in just two U.S. data centers, The Information reported in August.

Maia 200, the current generation, already powers Microsoft 365 Copilot and runs models from OpenAI as well as Microsoft’s own. It’s now being deployed across the U.S., Europe and Australia, according to Microsoft. GitHub Copilot and Microsoft Foundry are set to move onto it by the end of the year.

The shift will take time. Evercore ISI analysts estimate that Maia will account for about 10% of Microsoft’s spending on AI chips by early 2027, CNBC reported.

Microsoft says it will share more details next month at its Ignite conference in San Francisco.

This week, we take the GeekWire Podcast to Front Burner Studios in Seattle, where we’re hosted by studio co-owner Seth Paul, who’s co-founder and CEO of security startup Qinsay.

We discuss the White House crackdown on Microsoft’s green-card sponsorships, which Vice President JD Vance announced just hours before President Trump awarded Satya Nadella the National Medal of Technology and Innovation. We talk about the contrast, and about how Nadella himself traveled that same path from H-1B visa to U.S. citizenship.

We also look at how Seattle-area startups raised a record $3.5 billion, driven largely by companies building physical things like rockets and satellites.

That leads us to Shield AI’s plans to build AI-piloted fighter jets in Des Moines, Wash., where a city FAQ assures residents the facility is not a data center.

After we catch up on the news, Seth joins us to tells us about the studio, including the vintage console he drove from Detroit, and how he brings a musician’s approach to the startup world.

And in the final segment, it’s the return of the GeekWire Trivia Challenge.

Related links:

• Microsoft responds to White House immigration crackdown as Trump honors Nadella
• From H-1B to CEO: How Satya Nadella traveled the path the U.S. just cut off for Microsoft workers
• Seattle-area startups raise a record $3.5B as national VC funding cools
• Shield AI selects Seattle area to build X-BAT autonomous fighter jet
• Shield AI lands $150M Navy contract for AI-piloted fighter jet

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Satya Nadella arrived in the U.S. from India in 1988 to study computer science. Over the next three decades, he went from a temporary work visa to permanent residency to American citizenship, and rose up the ranks at Microsoft to become only the third CEO in its history.

“I don’t think my story would be possible anywhere else,” Nadella wrote in his 2017 book, “Hit Refresh.” “I am proud today to call myself an American citizen.”

On Thursday, President Trump personally handed the Microsoft CEO the National Medal of Technology and Innovation. The award cited his “transformative leadership of a critical American technology company, which led to its rejuvenation for a new era of cloud computing.”

Nadella thanked Trump on X, writing that he was “humbled to stand alongside so many giants of American innovation.” The other honorees were Dell Technologies CEO Michael Dell, who also received the technology medal; and Elon Musk, Google co-founder Sergey Brin, Nvidia CEO Jensen Huang and AMD CEO Lisa Su, who received the National Medal of Science.

Five of the six were born outside the country.

Hours earlier, the Trump administration had suspended Microsoft from the federal program it uses to help foreign workers take the same path to permanent residency. Vice President JD Vance said the company had abused the system by laying off American workers while hiring foreign workers, and called H-1B workers “foreign indentured servants.”

“Our message to Microsoft is you’re a great American company, but you’ve got to hire great American workers,” Vance said at a White House news conference.

Two different programs: The suspension doesn’t stop Microsoft from hiring foreign workers on H-1B visas. Those are temporary work visas, typically granted for three years at a time and generally limited to six years, with some exceptions. They’re overseen by U.S. Citizenship and Immigration Services.

Amazon is the bigger user of H-1B visas. It received more than 19,000 approvals for H-1B petitions in fiscal 2025, about three times Microsoft’s total, according to an analysis of USCIS data by the National Foundation for American Policy. The totals include renewals and extensions, so they don’t represent individual workers.

The program to which Microsoft lost access comes later in the process.

Known as PERM, it’s run by the Labor Department and is usually the first step when a company sponsors an employee to stay in the U.S. permanently. The employer has to advertise the job and show that no qualified, available U.S. worker can fill it. Most applications are for people already working in the U.S. on H-1B visas.

Microsoft is the biggest user of PERM. The Labor Department ruled on 3,161 of its applications in the fiscal year that ended in September 2025, more than for any other employer in the country, according to a GeekWire analysis of the agency’s data. Microsoft also led in the first nine months of fiscal 2026, with 1,683 applications decided through June.

Amazon and Google filed thousands of PERM applications in 2022 and early 2023, then largely stopped. The Labor Department ruled on 39 applications from Amazon and its subsidiaries last fiscal year, including Whole Foods, Audible and Zappos, and three from Google.

The suspension could hit hardest for Microsoft employees already on H-1B visas. Many count on the company to start the permanent residency process in time to extend their visas past the usual six-year limit, and the Labor Department says it won’t process Microsoft’s pending applications either.

Some Microsoft employees on H-1B visas were surprised by the news and unsure whether it would affect them, The Seattle Times reported. The paper noted that the White House hasn’t provided evidence of fraud by Microsoft.

Microsoft’s response: In a statement posted Thursday, Microsoft pushed back on criticism of its hiring and said it looks forward to “providing the Administration with additional information.” The statement focused on H-1B visas and didn’t address the PERM suspension specifically.

The company said about 80% of the roughly 6,000 H-1B applications it filed last fiscal year were to extend or change the status of people who already work at Microsoft. “These were not to hire new people,” it said.

The rest were for new hires already living in the U.S. legally, a group equal to about 1% of Microsoft’s U.S. workforce. “They are not new arrivals to our country,” the company said.

Microsoft also said it files H-1B petitions only for workers who meet “the rigorous standards of this visa category,” pays them “the same as any other employees doing comparable work,” and offers wages “among the highest of all H-1B filings.”

The vast majority of its U.S. employees are Americans, the company said.

Nadella’s own path: Nadella’s route to citizenship wasn’t a straight line, as he described in “Hit Refresh.” He was working at Microsoft when he married his wife, Anu, in India in December 1992. The next summer, her application for a visa to join him in the U.S. was rejected because she was married to a permanent resident.

Spouses of permanent residents faced long waits, and Microsoft’s immigration lawyer told Nadella it could take five years or more to bring her to the U.S.

Nadella considered quitting Microsoft and moving back to India. Then the lawyer suggested a different approach: give up his permanent residency and go back to a temporary H-1B visa, which would let his wife join him right away.

In June 1994, Nadella went to the U.S. embassy in New Delhi, past the long lines of people hoping to get visas, and told a clerk he wanted to give up his permanent residency. The clerk was dumbfounded, Nadella wrote. The plan worked, and Anu joined him in Seattle, where they started a family. Nadella eventually got back on the path to permanent residency and later became a U.S. citizen.

But in the meantime, back in Redmond, Nadella became known around the Microsoft campus as the guy who gave up his green card. Colleagues called him for advice. One, Kunal Bahl, later left Microsoft when his H-1B ran out before his permanent residency came through. He returned to India and founded the e-commerce company Snapdeal.

“Such is the perverse logic of this immigration law,” Nadella wrote.

The Trump administration suspended Microsoft from the federal program the company uses to help foreign workers stay in the U.S. permanently, accusing the tech giant of abusing the system.

The announcement by Vice President JD Vance, during a news conference Thursday morning at the White House, came hours before President Trump gave Microsoft CEO Satya Nadella the National Medal of Technology and Innovation in a ceremony honoring Elon Musk and other tech leaders.

Vance said Microsoft laid off 6,000 American workers last year while getting 6,300 H-1B visas and nearly 3,000 green cards, which he said amounted to replacing U.S. employees with lower-paid foreign workers.

“There has been no company in the United States, unfortunately, that has abused the system more than Microsoft,” Vance said at the news conference, while adding, “Our message to Microsoft is you’re a great American company, but you’ve got to hire great American workers.”

Microsoft’s response: In a statement, the company said 80% of the roughly 6,000 H-1B applications it filed last fiscal year were to extend or change the status of people who already work for the company. The rest were for new hires who were already living in the U.S. legally, a group equal to about 1% of its U.S. workforce.

“They are not new arrivals to our country,” the company said.

Microsoft said it pays H-1B employees “the same as any other employees doing comparable work,” that its wages are “among the highest of all H-1B filings,” and that the vast majority of its U.S. employees are Americans.

The statement didn’t mention the suspension, but the company said it looks forward to “providing the Administration with additional information.”

Details of the penalty: The suspension covers the Labor Department’s Permanent Labor Certification program, known as PERM. It’s usually the first step when a company sponsors a foreign employee to live and work in the U.S. permanently. To get approved, the employer has to advertise the job and show the government that no qualified American worker was available.

Labor Secretary Keith Sonderling said the department won’t accept new applications from Microsoft or process the ones it already has pending. The move doesn’t stop Microsoft from applying for H-1B visas, the temporary work visas that many PERM applicants hold.

The department also suspended Adobe and six IT outsourcing firms: Cognizant, Infosys, Tata, Wipro, HCL and Capgemini.

Trump didn’t mention the suspension at the ceremony. Introducing Nadella, he credited him with making Microsoft “an early leader in superintelligence” and said, “Satya, we are honored to give you the National Medal of Technology and Innovation. It is so well deserved.”

The official citation honored Nadella “for his transformative leadership of a critical American technology company” and for building the “hyperscale infrastructure that enabled the training and global deployment of American superintelligence.”

Tech industry reaction: The announcement drew pushback in Seattle’s tech community.

“There has been a continuous, nonstop deluge of immigration-related news leading up to the midterms,” said Xiao Wang, co-founder and CEO of Boundless, a Seattle startup that helps people navigate the U.S. immigration process.

Wang pushed back on Vance’s characterization of H-1B workers as “foreign indentured servants,” noting there are wage requirements to prevent underpayment of employees. He emphasized the economic benefits of educating and employing the students and workers who seek these visas — and what happens if they’re discouraged or prevented from coming to the U.S.

“What I have been trying to warn folks about is the long-term chilling effects that would be detrimental to the long-term prosperity and competitiveness of the United States,” he said.

Wang said the idea that the layoffs and recruitment of foreign-born workers are linked doesn’t make sense. “Layoffs and hiring are not one for ones of each other, especially at giant companies like Microsoft,” he said.

Someone laid off from a gaming division at Microsoft isn’t interchangeable, for example, with an H-1B employee who’s an expert in agentic AI for a Copilot role, he said.

Priyanka Kulkarni, founder and CEO of the immigration technology company Casium, previously worked at Microsoft for more than a decade building enterprise AI technology. She personally navigated H-1B status before becoming a permanent resident.

“I worked alongside people from around the world whose expertise helped build technology used by American businesses every day,” she said, adding, “America wants to lead in AI. That requires attracting and retaining exceptional people, and giving them confidence that they can build a future here.”

Kulkarni called the phrase “foreign indentured servants” troubling, and said it exposes a contradiction in the administration’s action.

“If the concern is that workers depend too heavily on their employers, blocking their path to permanent residency could deepen that dependence,” she said. “Permanent residency gives people more freedom to change jobs, negotiate pay, and start businesses.”

Microsoft is turning to an old friend and a familiar advantage in search of a new edge in AI.

The company and its longtime partner Nvidia on Wednesday started taking orders for a new line of high-end Windows PCs built to run large AI models independent of the cloud.

Microsoft also announced what it calls “Windows Hybrid Intelligence,” a set of features that will let its Copilot assistant read the files on a PC, take actions on the machine and opt to run AI models locally instead of in the cloud when it makes sense.

It’s not a new concept to users of such programs as Anthropic’s Claude, Perplexity and OpenClaw, which already work with the files on a user’s computer. But only Microsoft can build the features into Windows itself, along with security controls that limit what an AI agent can reach on the machine and will keep a separate record of what the agent does.

“I think agents are going to be the largest users of the file system,” Microsoft CEO Satya Nadella said during an on-stage conversation with Nvidia CEO Jensen Huang at an event in San Francisco.

Microsoft got an early jump in AI with its 2019 investment in OpenAI and the 2021 debut of GitHub Copilot, its AI coding assistant. But its Copilot products for consumers and businesses have since been overshadowed by OpenAI’s ChatGPT and Anthropic’s Claude.

Both rivals also moved quickly on AI agents that write code and carry out other tasks on a user’s computer, the kind of software Microsoft is now building into Windows. Microsoft’s own Copilot Cowork, which it introduced in March, integrates Anthropic’s Claude.

The tech giant has been reworking Copilot to catch up. Earlier this year, it put its Copilot teams for consumers and businesses under Jacob Andreou, now its executive vice president of Copilot. Last month, it released a new version of the app with tools for coding and long-running tasks.

Where Copilot is headed: Windows Hybrid Intelligence gives Copilot three new capabilities, as Andreou described them on stage. The assistant can draw on all the files on a PC, take actions such as moving files and changing settings, and hand tasks to AI models running on the machine “when cost or privacy matter more.”

Copilot will still use the cloud for the hardest tasks, Andreou said, and will act on the PC only with the user’s permission.

Microsoft said the features are expected to begin rolling out in the coming months on Copilot+ PCs, the AI-focused Windows machines it introduced in 2024.

Developers will get a version first. An experimental release coming later this month will let GitHub Copilot automatically send simpler coding tasks to an AI model on the PC and harder ones to the cloud.

In one example depicted on stage, Copilot’s Autopilot agent found an email from Andreou’s accountant, gathered tax documents scattered across his PC, renamed and sorted them into folders, bundled them into a zip file and drafted a reply with it attached, pausing for his approval before sending. The sorting was handled by AI models on the laptop, he said, so the tax details weren’t sent to the cloud.

Running AI models on the PC reduces the usage charges that come with AI in the cloud. Nadella wrote on X that Microsoft is bringing “unmetered intelligence to every desk and every home,” echoing the company’s original mission of “a computer on every desk and in every home.” A slide in the presentation said local models would run tasks on the PC “at no extra cost.”

Microsoft is also adding thousands of quick actions to the search box on the Windows 11 taskbar, such as switching to dark mode, arranging windows or sending a text message. Those start rolling out Wednesday to people in the Windows Insider testing program.

An option to get Copilot answers in the search box will be opt-in and will arrive in select markets later this year, according to the company.

The Recall precedent: Microsoft has run into trouble before with AI that looks at what’s on a PC. Recall, a feature that takes periodic screenshots of a user’s activity to make it searchable, drew objections from security researchers when it was announced in 2024. Microsoft delayed it and made it opt-in before releasing it widely in 2025.

Recall didn’t come up at Wednesday’s event. Microsoft’s blog post says Copilot’s access to local content, which it describes as “files and recent activity,” will require the user’s permission.

Limits on AI agents: Pavan Davuluri, Microsoft’s executive vice president of Windows and Devices, said the AI agents that run on PCs today are “fundamentally insecure because they have broad system access.”

Microsoft’s answer is a technology called Microsoft Execution Containers, now generally available in Windows 11, which lets an organization set which files and networks an AI agent can reach. Microsoft said OpenAI’s Codex and OpenClaw already support it, and that Anthropic’s Claude Code and Perplexity plan to.

Meta’s Muse agent is coming to Windows as an app that uses the technology, as well.

The new PCs: The machines are built around Nvidia’s RTX Spark chip and aimed at developers and creative professionals who want to run large AI models on their own computers.

Microsoft’s Surface Laptop Ultra, a 15-inch laptop with up to 128GB of memory, starts at $2,599 and will be available Oct. 16, the same day similar laptops from Asus, Dell, HP, Lenovo and MSI begin shipping.

A desktop version for developers, the Surface RTX Spark Dev Box, costs $5,999 and ships in the U.S. in November.

Microsoft is pitching the laptops against Apple. It says machines with the Nvidia chip start producing AI responses up to 2.1 times faster than a 16-inch MacBook Pro with Apple’s M5 Pro chip and generate AI images up to 4.3 times faster, citing tests it commissioned or that Nvidia ran on preproduction machines.

The company is also offering up to $1,000 back to buyers who trade in a MacBook Pro.

Huang said the chip took more than 4,000 engineering years and started with a conversation he had with Nadella four years ago.

Nvidia’s Windows roots: Sriram Krishnan, the venture capitalist and former White House AI advisor who moderated the conversation, asked Huang for a favorite memory of working with Microsoft. Huang said Nvidia owes its existence to Windows.

He recalled a moment in late 1992, when Windows 3.1 was new and he and his co-founders, who had worked mostly on workstations, started imagining a PC with 3D graphics that could run games and design software. They started the company the next year.

“If not for Windows, Nvidia wouldn’t have been founded,” Huang said.

He traced a line from there to the AI boom. Windows brought graphics chips to the PC, he said, which led to Nvidia’s GeForce chips and its CUDA software, which gave AI researchers the computers they needed for deep learning.

Nadella joked that Huang was “now going to do a little transfer of market cap back to me.” Nvidia is the world’s most valuable company, at about $5.8 trillion. Microsoft is worth about $3.9 trillion.

“Windows has been with me for 34 years,” Huang said at the end of the conversation. “Looks like it’s going to be with me for 34 more.”

“There you go,” Nadella added before they walked off the stage.

Microsoft on Friday morning unveiled its long-promised Copilot “super app” — without officially calling it that — combining AI chat, coding and long-running agents into a unified app for business and personal use.

The new version of the Copilot app adds sections called Home, which combines chat with Microsoft’s Cowork agent; Code, which lets people build their own apps and tools by describing them; and Autopilot, where people can set up their own always-on AI agents.

It also brings full versions of Word, Excel and PowerPoint inside Copilot, so people can create and edit documents with AI and their co-workers without switching apps.

The announcement is Microsoft’s answer to OpenAI and Anthropic, which have been combining chat, coding and agents in their own apps and selling them directly to businesses that have long been Microsoft’s core customers. Microsoft also uses models from both companies in Copilot, alongside its own.

Partners and rivals: Microsoft executives contrasted the company’s approach with OpenAI and Anthropic during an event Wednesday, according to a transcript provided by Microsoft. The pitch is aimed at corporate IT departments, which have long relied on Microsoft for security and compliance.

Jacob Andreou, the executive vice president who leads Copilot, said Microsoft knew that “unlike a lot of our competition, sending your most sensitive files down to a local machine into a VM was a complete nonstarter” — an apparent reference to Anthropic’s Claude Cowork, which runs in a virtual machine on the user’s computer.

Microsoft CEO Satya Nadella pitched Copilot as a hedge against relying on any one AI lab, saying companies should be able to test models against their own benchmarks and swap one out for another.

“My test of true independence going forward is for you to have a private eval that you can hill climb on and substitute a model,” he said. Translation: a “private eval” is a company’s own set of tests for AI models, and “hill climb” is a phrase in vogue in AI circles for steadily improving results against those tests.

A company that can’t do those things, he added, has effectively handed the knowledge it builds with AI “to somebody else.”

Model choice: Microsoft also emphasized the ability to switch between AI models from different companies. A menu shown during the presentation let users pick OpenAI’s GPT or Anthropic’s Opus, or an Auto mode that chooses a model for each request.

Microsoft also showed its own MAI models alongside OpenAI, Anthropic and xAI on one of Nadella’s slides, although they weren’t listed in the menu shown during the demo.

The rollout: Nadella first promised the super app at Microsoft’s Build developer conference in June, saying that “come summer” the company would bring “coding to all knowledge work within one Copilot super app.” On Microsoft’s July 29 earnings call, he told investors it would arrive “this quarter,” which ends Sept. 30.

Friday’s announcement meets that deadline with less than a week to spare, and most of the new features won’t be widely available until later.

• Code, already in the hands of a few customers in Microsoft’s Frontier early-access program, rolls out more widely to the program at the end of the month, with broad availability in the coming weeks and a preview for Microsoft 365 Premium and Pro subscribers later this year.
• Autopilot expands to private preview at the end of the month. Office in Copilot will roll out to consumers and Frontier customers in the coming weeks.

Office inside Copilot: Copilot has long run inside Word, Excel and PowerPoint. Now the full apps also run inside Copilot. “This is not just some simplified viewer,” Andreou said.

In a demo, a Microsoft product manager had Copilot pull data into an Excel workbook, accepted her team’s tracked changes in a Word document, and then had Copilot turn both into a PowerPoint deck without leaving the app. Co-workers can edit the same files at the same time from the regular Office apps, according to Microsoft.

How it’s priced: Copilot now has two ways to pay. A per-user monthly license covers everyday uses such as chat and Copilot features in Word, Excel, PowerPoint, Outlook and Teams. More intensive agent work, including Cowork, Code and Autopilot, is billed based on usage, as are the newest frontier models, OpenAI’s Astra and Anthropic’s Claude Fable.

“Our view is that there are two kinds of AI at work,” said Jared Spataro, Microsoft’s chief marketing officer for AI at Work, in a recorded briefing for media. “They call for two very different ways of paying, and Copilot offers both.”

Consumer Microsoft 365 subscriptions will also add usage-based billing later this year for Cowork, Code and other new features, Spataro said.

Nadella told investors in July that Microsoft is evolving its business model “beyond per-seat to per-seat-plus-consumption.” Usage-based services are off by default, and administrators can set spending limits for an entire company, specific groups or individual users through Microsoft’s Agent 365 management tools.

From OpenClaw to Autopilot: Autopilot grew out of Microsoft’s experiments with OpenClaw, the open-source personal AI agent that went viral earlier this year. In March, Nadella described OpenClaw as a security risk akin to “a virus.”

By June, Microsoft had introduced Scout, an always-on personal agent for work that it called the first of its Autopilots. Nadella told investors in July that the agent was “powered by OpenClaw.” The new Copilot drops the Scout name, and people instead create and name their own Autopilots.

In his presentation this week, Andreou pitched Autopilot as the answer to the concerns that have kept agents like OpenClaw out of big companies.

“The hallmark of an amazing, long-running agent is autonomy and flexibility,” he said. “That is the same thing that makes them absolutely terrifying to an IT admin.”

Each Autopilot runs in the cloud inside a company’s Microsoft 365 environment, with its own identity, memory and email address, and people can tag it in Teams or Outlook like a co-worker.

In a demo, a Microsoft employee playing the role of a regional manager at a retail chain gave his Autopilot, named Dot, one goal: make sure stores had inventory in time for Black Friday. It chose which Teams channels, email threads and inventory data to monitor, sent him a daily summary, and flagged a shipment problem that could affect 18 stores.

The adoption question: Microsoft reported more than 30 million paid Microsoft 365 Copilot seats in July, up from 20 million in April. That’s still only about 7% of the more than 450 million commercial Microsoft 365 seats the company reported in January.

The new Copilot comes three weeks after Microsoft reorganized its financial reporting around a similar idea, creating a segment called Agents and Infra and moving GitHub’s cloud revenue into its Microsoft 365 business.

“It’s no longer about building or selling one app or service, but about connecting the entire trajectory of a ‘job to be done,'” Nadella wrote in a note to investors about the change at the time.

Microsoft 365 cloud revenue, which covers business and consumer subscriptions including Copilot and now GitHub, reached $100.3 billion in fiscal 2026 under the new structure, up about 19%. Microsoft doesn’t disclose how much of that comes from Copilot.

“None of these things really matter unless they actually go to work inside of your companies and deliver real value,” Andreou said.

Microsoft plans to share more at its Ignite conference, Nov. 17-20 in San Francisco.

Microsoft is moving its communications function out of its marketing group and into the corporate, external and legal affairs organization led by Brad Smith, its vice chair and president, according to internal emails Thursday from Smith and Microsoft CEO Satya Nadella.

Brent Colburn, Microsoft’s VP of global public affairs, was named interim communications leader, effective next week, reporting to Smith. Colburn announced this month that he was leaving the company in mid-October. He will now stay through December and is not a candidate for the permanent role.

Frank X. Shaw, the longtime Microsoft communications chief who announced earlier this month that he would leave the company at the end of the year, will step away from his current responsibilities and serve as an advisor to Smith and Colburn during the transition, according to the memos.

Building in public: Nadella’s memo described the change in the organizational structure as a response to a shifting media environment, and said the larger plan is to make employees a bigger part of Microsoft’s public voice.

He said Microsoft needs to “find new ways to connect directly with all of our constituencies” in a media environment he called “increasingly fragmented and noisier than ever.”

“In many ways, the people closest to the work have the best opportunity to shape how Microsoft is understood,” Nadella wrote. He said he wants to help engineers, sellers, partners and others “closest to our products and customers” become “an even bigger part of how we tell our story, all connected by a shared strategy and set of principles.”

The approach Nadella described is closer to how AI labs and startups operate. OpenAI and Anthropic tend to be more fluid with their blogs and livestreams, and AI researchers and leaders are more likely to post directly and informally in their own voices.

Microsoft has been working to make more of a mark of its own in AI, building in-house models under Mustafa Suleyman’s Microsoft AI group, while Copilot trails ChatGPT and Google’s Gemini in consumer adoption. In recent weeks, Meta has made a splash with its Muse AI assistant and a new device called Muse Charm, a palm-sized gadget it previewed Wednesday.

Nadella and the company’s engineering leadership have been pushing to modernize Microsoft’s communications, moving toward a more direct approach and building in public, according to a person familiar with the situation.

“We will learn, we will experiment, and we will evolve,” Nadella wrote. “There is a fundamentally new way to think about communications, and this team will be central to building it.”

Smith echoed the point, writing that Microsoft will “likely have more employees and executives acting as part of Microsoft’s public voice, including on social media.”

The timing: Shaw’s shift to an advisory role surprised some inside the company. Announcing his exit two weeks ago, he said he would be at Microsoft “through the end of the calendar year.” Microsoft said at the time that it would take “the coming months” to determine its future communications leadership.

Contacted via phone, Shaw described this as the formalization of the plan that was announced. He will still be at Microsoft through the end of the year in an advisory role.

In a statement, Microsoft said Shaw “has been a trusted counselor and leader at Microsoft for more than two decades, and we’re grateful he will continue to act as an advisor during the transition.”

Nadella thanked Shaw in his memo, saying he has “made tremendous contributions to the company and to our communications function over the last 17+ years” and has been “a great source of counsel to our leadership team and to me personally, across the company’s biggest moments.”

In his memo, Smith wrote of Shaw that he has “worked as closely with him as almost anyone” over those years, and that Shaw’s “enduring impact on Microsoft and this team will be felt for years to come. I will miss him.”

Smith said Microsoft has launched a search for a new chief communications officer that includes internal and external candidates. He will work on the selection with Takeshi Numoto, Microsoft’s chief marketing officer, and Amy Coleman, its chief people officer.

The next chief communications officer is also expected to report to Smith, which indicates the change is permanent and not just for the interim period.

The new structure: Nadella called Smith one of the few leaders who “embody Microsoft’s voice” authentically, citing his “rare ability to communicate complex ideas with clarity, conviction, and trust.”

Smith’s organization handles Microsoft’s legal, regulatory and public policy work, including antitrust matters, litigation and government relations. Communications will now sit alongside those functions rather than with marketing and product, although both memos emphasize continued coordination between the two.

The communications leadership team will expand to include Caitlin McCabe, Carol Ann Browne and Dave Imperiale, according to Smith’s memo, citing the communications roles they play for Nadella, Smith and Judson Althoff, CEO of Microsoft’s commercial business. Kate Frischmann will also join the team, reflecting her role on the public affairs side of Smith’s organization. In his interim role, Colburn will join Numoto’s leadership team in addition to Smith’s.

Nadella wrote that Microsoft’s upcoming fall events present “a real opportunity to bring together our product story, our marketing, and our communications in new ways.”

“People matter more than AI.”

That’s the premise of a draft code of conduct Microsoft published Monday morning for the AI models it’s developing in-house. The 37-page document would bar its models from resisting shutdown, setting their own goals, or hiding their reasoning from human auditors.

The document applies to Microsoft’s MAI models, the in-house family the company began building after forming a superintelligence team in late 2025. Microsoft has since released seven homegrown models in what it described as a push for long-term self-sufficiency in AI.

The company says the models should remain “subordinate to humanity, subject to meaningful human oversight and control.”

“AI is moving fast,” the company says in a blog post. “As it does, we believe it’s worth writing down the rules and the motivations behind it, and doing it in as open a space as possible.”

Microsoft acknowledges there’s no guarantee its models will follow the rules. “Written objectives alone can never ensure alignment,” the company says, calling the document a “north star,” not “a guarantee of present-day performance.”

The company says it also filters what its models produce, watches how they behave once released, and limits what they’re allowed to do.

Microsoft’s move comes amid a growing debate over the pace of AI development. In an essay over the weekend, Anthropic CEO Dario Amodei called for slowing down AI advances, saying the pace of development has started to surpass the industry’s ability to keep AI systems safe.

As a first step, Anthropic committed to giving outside evaluators permanent, employee-level access to its systems.

Industry reaction to Amodei: OpenAI CEO Sam Altman agreed and said OpenAI would make the same commitment to independent evaluators. Elon Musk’s response: “Dario is right.”

President Donald Trump rejected the idea of guardrails outright Monday, blaming a “SICK conspiracy” for public backlash over AI data centers and writing that “the only one that is happy about it is China,” alluding to concerns about American competitiveness in AI.

David Sacks, who served as the White House AI and crypto czar until March, said the two companies should slow down on their own and questioned their motives, arguing that a slowdown is already good business for them and that new industry rules would mostly serve to lock in their lead.

Microsoft CEO Satya Nadella weighed in Sunday, writing on X that the company welcomes “the research, focus, and deliberate pacing needed to get alignment right,” using the industry’s term for making AI systems reliably do what people intend.

Nadella added that the effort “cannot be controlled by a handful of entities, but must have broad representation across the ecosystem, countries, and fields, including academia.”

Microsoft’s draft code of conduct: Mustafa Suleyman, the Microsoft AI CEO, told CNBC the document had been in the works for about five months, and that the company decided to publish it now given the current discussions.

Microsoft and Anthropic are business partners. Microsoft agreed last November to invest $5 billion in Anthropic, as part of a deal in which Anthropic committed $30 billion to Azure. Claude models run inside Microsoft 365 Copilot, and Microsoft’s Copilot Cowork tier integrates Claude.

One place where the two companies may diverge is the question of what AI models are, exactly. Microsoft’s code of conduct says its models are “not conscious and should not be designed to imitate consciousness.” It also rejects “the pursuit of legal personhood, or the idea that models might deserve welfare, or be entitled to rights.”

The Verge called that portion of the document “a direct swipe at AI welfare research and model consciousness — concepts Anthropic has been pushing hard on lately.”

Anthropic runs a research program on model welfare. It has given some Claude models the ability to end abusive conversations, and committed to preserving the weights of retired models. Amodei has said he’s open to the idea that a model could be conscious.

Microsoft is taking public comment on its code of conduct for six weeks through a feedback form. It says it will publish a summary of the responses and a revised version later this year, to guide development starting in 2027. It says it isn’t training its current models on it.

The company’s AI team developed the draft with its responsible AI, legal, red teaming and safety teams, consulting outside experts in law, ethics, linguistics and philosophy, plus focus groups drawn from the public.

It’s the end of an era at Microsoft: Frank X. Shaw, the executive who oversaw the tech giant’s communications for nearly three decades, first at an external agency and for the last 17 years as one of its senior leaders, is leaving at the end of the year.

Shaw, 64, said he’s not retiring, although he doesn’t have another job lined up. He plans to stop working for a while, do some of the things he hasn’t had time for, and then decide what’s next.

“I have had a ringside seat at some of the biggest leadership, technology, and business transformations that have ever taken place,” Shaw said, sharing the news of his departure (under embargo) in a phone call Thursday afternoon. “I just feel incredibly fortunate.”

He said he had been discussing his potential departure for some time with Takeshi Numoto, Microsoft’s chief marketing officer, looking for the right moment.

Microsoft has not announced a successor for his role as chief communications officer. In a LinkedIn post, Shaw said the company will consider internal and external candidates.

A statement from Shaw’s colleagues in corporate communications credited him for his many years shaping Microsoft’s “voice and reputation with intelligence, candor and wit. His leadership and contributions to the company are too extensive to list, as is the number of journalists who have, at one point or another, used his name in vain.”

A former Marine Corps public affairs officer, Shaw has worked with all three of Microsoft’s CEOs. He started on the agency side, at Waggener Edstrom — now known as We. Communications — when Bill Gates was still running the company.

He built his reputation defending and advocating for Microsoft through some of its hardest stretches: the antitrust years, the Windows Vista backlash, the scramble to replace Steve Ballmer as CEO, and the weekend in 2023 when OpenAI’s board fired Sam Altman.

As the company’s top communications executive, he has also told the story of Microsoft’s reinvention under CEO Satya Nadella, from the LinkedIn and Activision Blizzard deals to an AI push that has carried Azure past $100 billion in annual revenue.

Evolving with technology: Shaw has spent much of his career closely watching the tech landscape and moving Microsoft’s voice into new channels as they emerged.

“We’re always thinking about what is the art and science of communications,” Shaw told PRWeek. “How do we reach our audiences most effectively in a changing environment?” He called the arc from print to radio and TV to social media and newsletters a “constant evolution of influence.”

He turned the corporate blog into a place where the company argued its own case, writing “Microsoft by the numbers” himself in 2010 — a stat-by-stat comparison against Apple and Google that TechCrunch dubbed “fantastic passive-aggressive.”

He and his team experimented with different and risky methods of telling the company’s story, holding mass briefings under embargo and publishing documents known as the “Book of News” in advance of its major keynotes and conferences. The prospect of a reporter having to answer to “fxs” was no doubt a factor in ensuring the news (mostly) didn’t leak.

Shaw hired Steve Clayton out of a technical role at Microsoft in London, where he had been blogging about the company unofficially out of frustration with how it was perceived, and made him chief storyteller. In the middle of the AI boom, Clayton and Shaw embraced the analog undercurrents in popular culture and launched Signal, a quarterly Microsoft print magazine for business leaders.

Clayton was VP of communications strategy by the time he left in January to become chief communications officer at Cisco, making Shaw’s planned departure the second high-profile exit from Microsoft’s comms team in a year.

Adapting to AI: In recent years, Shaw made his own team a testing ground for AI, publishing what worked and what didn’t. In a 2023 post he described using Copilot in Teams to pull story ideas out of conversations with spokespeople and anticipate coverage after interviews, and asking the AI to “poke holes in a statement we’re making on a tricky topic.”

He called it his corporal, a reference to Napoleon, who was said to bring one to meetings and ask whether his generals’ war plans made sense to him. A survey of 80 people in Microsoft’s communications and marketing organization found 84% did not want to go back to working without it.

Shaw was also known to use AI as a sounding board when a story frustrated him, offering him an objective take before he called and let a particular reporter have it.

He announced his departure Friday morning in a message to Microsoft’s communications team (reminding them he’s still there for a few months yet) and his public post on LinkedIn.

“Thank you as well to all the reporters, editors, writers, influencers and analysts who have put up with me over this time, enduring my early and late night calls, my off the record ‘no comments,’ my bad story ideas and my extended commentary on headlines and positioning,” he wrote.

“You all have incredibly hard and valuable jobs,” he added, “and while I’ve not agreed with everything said about us 😊 I appreciate you anyway.”