IT & AI HistoryA Chronicle of AI and Information Technology

ORGANIZATION

Microsoft Corporation

Bill Gates and Paul Allen began the business to sell BASIC for the Altair 8800. The founding year is given as 1975, but the name 'Micro-soft' does not appear in writing until 29 July that year, and incorporation came much later, on 25 June 1981. Supplying PC DOS for the 1981 IBM PC while retaining the right to license the same software as MS-DOS to every other compatible-machine maker produced effective monopolies on PC operating systems and productivity software through the 1990s. Under Satya Nadella from 2014 it pivoted hard to cloud (Azure) and, via its investment in OpenAI, to AI; revenue for the fiscal year ended 30 June 2026 was US$331.8 billion.

SourceMicrosoft Corporation / Jason Wells · Public domain (PD-textlogo; trademark) · View on Commons ↗

Organization

Founded
1975
Status
Active
Active
1975–
Appearances
69
Name
ENMicrosoft CorporationJAMicrosoft

Microsoft Corporation is an American software company that Bill Gates and Paul Allen started in 1975 to sell a BASIC interpreter for the Altair 8800. Headquartered in Redmond, Washington, it operates across operating systems (Windows), productivity (Microsoft 365), cloud (Azure), gaming (Xbox / Activision Blizzard), AI (a deep partnership with OpenAI, plus the Copilot family), and hardware (Surface). It is one of the world's most valuable listed companies, trading positions with Apple and NVIDIA.

From the DOS licence to the Azure-OpenAI bet

The company began in Albuquerque in 1975 — 4 April is the conventional date, though the name is not attested in writing before 29 July that year and Microsoft did not incorporate until 25 June 1981. It won the IBM PC operating-system contract in 1980, licensed 86-DOS (formerly QDOS) from Seattle Computer Products that December, and bought the rights outright in July 1981, shipping it with the machine as PC DOS 1.0. The decisive term was the one that let Microsoft sell the identical software to every other manufacturer as MS-DOS. That licensing shape carried it through DOS, Windows 1.0 (1985), Windows 3.0 (1990), and Windows 95 (1995). Office bundled Word, Excel, PowerPoint and Mail from 19 June 1989 — on the Macintosh first, with a three-application Windows edition following on 1 October 1990 — giving Microsoft an effective monopoly on productivity software through the 1990s. The 1986 IPO valued the company at about US$778 million. Steve Ballmer became CEO in 2000, the year the District Court ordered a break-up in United States v. Microsoft; the DC Circuit vacated that order in June 2001 and the case ended in a conduct settlement approved on 1 November 2002.

The 2000s were difficult: Vista flopped, mobile was missed entirely, and the Nokia handset business bought in April 2014 was written down by US$7.6 billion in July 2015. Satya Nadella's appointment as CEO in 2014 brought "Mobile First, Cloud First" — aggressive Azure expansion, .NET open source, Linux support on Windows, and the GitHub acquisition (US$7.5 bn, 2018). In 2019 Microsoft invested US$1 bn in OpenAI, making Azure its exclusive compute platform; this expanded in January 2023 into a multi-year, multi-stage extension that reporting put in the order of US$10 bn — a figure Microsoft's own announcement did not state — with the GPT-4-powered New Bing / Copilot following in February. By 2024 Copilot had been embedded across Windows, Microsoft 365, GitHub, and Dynamics. In gaming, the US$68.7 bn acquisition of Activision Blizzard closed in October 2023 — one of the largest M&A deals in industry history.

Azure past US$100 bn, and where Copilot sits

SegmentRepresentative productsNotes
Productivity and Business ProcessesMicrosoft 365 (Office), Teams, LinkedIn, Dynamics 365Over 400 m paid Office 365 commercial seats
Intelligent CloudAzure, Azure OpenAI Service, GitHub, Visual Studio, server productsAzure revenue passed US$100 bn for the first time in FY2026
More Personal ComputingWindows, Surface, Xbox, Activision Blizzard, BingWindows 11, Copilot+ PC
AICopilot (Microsoft 365 / Windows / GitHub / Security), BingOver 30 m paid Microsoft 365 Copilot seats (Microsoft, July 2026)

Key events

  • April 1975: Gates and Allen begin the business in Albuquerque; the name is first written down on 29 July, and the company incorporates only in 1981.
  • 1980: OS contract with IBM; PC DOS / MS-DOS supplied for the machine announced on 12 August 1981.
  • 1985: Windows 1.0.
  • March 1986: IPO.
  • August 1995: Windows 95 — seven million copies in the first five weeks on Microsoft's own count, with the Japanese-language edition on 23 November — plus Office 95; Internet Explorer shipped separately with Plus!.
  • 18 May 1998: DoJ and twenty states file the antitrust suit. Break-up ordered 7 June 2000, vacated by the DC Circuit on 28 June 2001, settled by a consent decree approved 1 November 2002.
  • 2001: Xbox launches.
  • February 2014: Satya Nadella becomes third CEO.
  • April 2014: Nokia's devices and services business acquired; written down by US$7.6 bn in July 2015.
  • 2016: LinkedIn acquired for US$26.2 bn.
  • 2018: GitHub acquired for US$7.5 bn.
  • July 2019: US$1 bn investment in OpenAI.
  • January 2023: A multi-year, multi-stage extension of the OpenAI investment, reported at around US$10 bn but not quantified by Microsoft.
  • February 2023: New Bing / Copilot released.
  • October 2023: Activision Blizzard acquisition closed (US$68.7 bn).
  • March 2024: Mustafa Suleyman, co-founder of DeepMind and Inflection, joins as EVP and CEO of the new Microsoft AI organisation, reporting to Nadella.
  • May 2024: Copilot+ PC announced; Recall feature pulled in June after privacy backlash.
  • July 2024: CrowdStrike triggers a global Windows outage; Microsoft's own estimate was 8.5 million Windows devices affected, under one per cent of the installed base.
  • 2025: the MAI in-house model series is rolled out. Windows 10 reaches EOL on 14 October. The OpenAI agreement is renegotiated, re-balancing IP, revenue share, and exclusivity.
  • October 2025: After the OpenAI restructuring, Microsoft states that it holds roughly 27% on an as-converted basis, valued at approximately US$135 bn.
  • March 2026: Copilot is consolidated across consumer and commercial under Jacob Andreou as EVP, Copilot, reporting to Nadella.

Key metrics

Company figures for the fiscal year ended 30 June 2026 unless stated.

  • Revenue: US$331.8 bn (+18%) / Operating income: US$155.2 bn (+21%) / Net income: US$133.7 bn (+31% GAAP)
  • Azure: revenue passed US$100 bn for the first time in FY2026
  • Microsoft Cloud revenue, FY26 Q4: US$59.3 bn (+27% YoY)
  • AI revenue run rate: above US$37 bn, +123% year on year — Microsoft's own figure, given on the 29 April 2026 call and the first update since the US$13 bn run rate disclosed in January 2025
  • Microsoft 365 Copilot: more than 30 million paid seats (up from 20 million three months earlier)
  • Employees: approximately 223,000 full-time, of whom 121,000 in the US
  • Market cap: about US$4 trillion, contending for first place globally

A consent decree, not a break-up

By taking OS and productivity software as de facto standards in the 1990s, Microsoft established the platform-rent model for the PC industry. In the antitrust case that followed, the DC Circuit upheld the finding that Microsoft had unlawfully maintained its operating-system monopoly, and the case set the precedent for government intervention against platform monopolies — but it ended in conduct restrictions in 2002, not a break-up, and the appeals court disqualified the trial judge, Thomas Penfield Jackson, from the remedy phase for having discussed the pending case with reporters. From 2014 Nadella's leadership abandoned the company's open-source antagonism wholesale: Linux support on Windows, an open-sourced .NET, the GitHub acquisition, and the free VS Code editor rebuilt the relationship with developer communities.

The rapid scaling of AI investment, however, has drawn criticism for its energy and water footprint. Microsoft has pledged to be carbon-negative by 2030, but as of 2024 its greenhouse-gas emissions were about 30 per cent above 2020 levels, which the company attributes to AI data-centre buildout. The US FTC, European Commission, and UK CMA all scrutinised the Activision deal for competition concerns; the UK initially blocked it and only cleared it after cloud-gaming rights were carved out to Ubisoft.

On security, the 2023 Storm-0558 incident (Chinese-aligned actors compromising Exchange Online mailboxes, including at the US State Department) and the July 2024 CrowdStrike outage forced Microsoft to reconsider kernel-level extension APIs in Windows. The Recall feature, pulled in 2024 and reshipped in 2025 with offline and encrypted storage, still faces principled privacy objections to a design that periodically screenshots whatever is on screen. The OpenAI relationship has likewise evolved: the 2025 restructuring has diversified OpenAI's compute partners (Google Cloud, Oracle, SoftBank), while Microsoft AI — under Mustafa Suleyman — accelerates in-house frontier-model work.

Appearances

  1. CP/M — The Standard OS for 8-bit Micros
  2. The Altair 8800 — The Personal Computer That Started on a Magazine Cover
  3. Microsoft Founded
  4. The IBM Personal Computer 5150 — An Open Design and the Market It Lost
  5. The Birth of MS-DOS — PC DOS 1.0 and the IBM PC
  6. NEC PC-9801 — The 16-Bit Machine That Became Japan's Standard PC
  7. Lotus 1-2-3 — The Spreadsheet That Made the IBM PC the Office Standard
  8. Windows 1.0 Released
  9. The First Microsoft Office Suite
  10. Windows 3.0 — The First Commercially Successful Windows
  11. Windows NT — The 32-Bit Windows That Left DOS Behind
  12. Netscape Navigator 1.0 Released
  13. Windows 95 Released
  14. United States v. Microsoft — The Antitrust Case
  15. Windows 98 — Home Windows with Built-in USB and the Browser Folded In
  16. Windows 2000 — NT 5.0 Renamed, With Active Directory for Business
  17. ILOVEYOU — The Love Letter Worm That Circled the World in a Day
  18. Windows Me — The Last of the Windows 9x Line
  19. Windows XP — Home Windows Moves onto the NT Line
  20. Xbox Released — Microsoft Enters the Console Market
  21. Nokia 7650 Launches — Symbian S60 Opens the Smartphone Era
  22. Xbox 360 — Three Regions in Three Weeks, and the Red Ring
  23. Windows Vista — XP's Successor, Launched in Two Steps
  24. GitHub Goes Public — A Social UI Over Git
  25. DuckDuckGo Launches — A Search Engine That Doesn't Track You
  26. Windows 7 — A Fresh Start on Vista's Foundations
  27. Windows Azure Goes Live — Sixteen Months After Its Unveiling
  28. What Is Kinect? The Xbox Sensor That Made the Body the Controller
  29. TypeScript Announced — Microsoft
  30. Microsoft Surface — The Windows Company Builds Its Own Tablet
  31. Windows 8 — The Windows That Bet on Tablets and Dropped the Start Button
  32. The Snowden Disclosures — The Day NSA Mass Surveillance Became Public
  33. Xbox One — Microsoft's Third Console, Which Began With a U-Turn
  34. Satya Nadella Becomes CEO of Microsoft
  35. The Kepler Conjecture and Flyspeck — Machines Check a Proof Its Referees Could Not
  36. ResNet — The Shortcut That Made 152 Layers Trainable
  37. WannaCry — The Ransomware That Weaponised a Leaked NSA Tool
  38. Microsoft Acquires GitHub for US$7.5 Billion
  39. Microsoft Invests US$1 Billion in OpenAI
  40. GPT-3 Announced
  41. Xbox Series X/S Released
  42. SolarWinds — Russian SVR Poisons the Update Pipeline Itself
  43. GitHub Copilot — The Start of AI-Assisted Coding
  44. Windows 11 Released
  45. ChatGPT Launched
  46. Perplexity AI Goes Public — A Search Engine That Answers, with Sources
  47. Rust Enters the Linux Kernel — A Second Language in Mainline
  48. The 2023 Tech Layoffs — The Month a Decade of Hiring Ended
  49. Microsoft Invests Another US$10 Billion in OpenAI
  50. New Bing and Microsoft Copilot — LLMs Enter Search
  51. Meta's LLaMA — A Research Release, a Leak, and the Open-Weights Debate
  52. GPT-4 — Going Multimodal
  53. What Is Mistral AI? The French AI Company That Began With Open Weights
  54. Samsung's ChatGPT Leak — How Employees' Prompts Led to a Generative AI Ban
  55. pgvector Comes of Age — Putting AI Vector Search inside the RDB
  56. Microsoft Closes US$68.7 Billion Acquisition of Activision Blizzard
  57. The OpenAI Coup — Altman Fired, Reinstated in Five Days
  58. The New York Times v. OpenAI — A Newspaper Takes Generative AI to Court
  59. Figure AI — The Humanoid Start-up That Teamed Up with OpenAI and Entered a BMW Plant
  60. Copilot+ PC and Recall — On-Device AI and an Instant Retreat
  61. NVIDIA Briefly Becomes the World's Most Valuable Company
  62. The CrowdStrike Falcon Outage — The Largest IT Outage in History
  63. The Three Mile Island Unit 1 Restart Deal — Data Centres Call a Reactor Back
  64. MCP — How One Company's Connector Became the Industry's Standard
  65. The IEA's Energy and AI Report — Data-Centre Power Set to Double by 2030
  66. The AI Bubble Debate — Record Capex, Circular Deals and the Dot-Com Comparison
  67. Windows 10 End of Support
  68. OpenAI's Recapitalisation — The For-Profit Becomes a PBC, the Nonprofit Keeps Control
  69. Claude Mythos Preview and Project Glasswing — The Model Held Back for Its Hacking Skill

Questions this page answers

When was Microsoft founded, and by whom?
Bill Gates and Paul Allen started it in Albuquerque in 1975 to sell BASIC for the Altair 8800. 4 April is the conventional date, but the name first appears in writing on 29 July 1975, and the company incorporated only on 25 June 1981.
Who have been Microsoft's CEOs?
Three: co-founder Bill Gates, Steve Ballmer from 2000, and Satya Nadella, who became the third CEO in February 2014.
How did Microsoft come to dominate PC operating systems?
When it supplied PC DOS for the 1981 IBM PC, it kept the right to sell the same software as MS-DOS to every other compatible-machine maker. It carried that licensing shape into Windows and, with Office, held effective monopolies on PC operating systems and productivity software through the 1990s.
Was Microsoft broken up in the antitrust case?
No. The District Court ordered a break-up in June 2000, but the appeals court vacated that order in June 2001, and the case ended in a conduct settlement approved in November 2002.

Sources

  1. PrimaryMicrosoft Corporation, Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (revenue, net income, headcount)

    Accessed 2026-08-10

  2. PrimaryMicrosoft Cloud and AI strength fuels fourth quarter results — Microsoft FY26 Q4 press release, July 29, 2026

    Accessed 2026-08-10

  3. PrimaryMustafa Suleyman, DeepMind and Inflection Co-founder, joins Microsoft to lead Copilot — The Official Microsoft Blog, March 19, 2024

    Accessed 2026-08-10

  4. PrimaryAnnouncing Copilot leadership update — The Official Microsoft Blog, March 17, 2026

    Accessed 2026-08-10

  5. PrimaryMicrosoft announces restructuring of phone hardware business — Microsoft Source, July 8, 2015 (US$7.6 bn Nokia impairment)

    Accessed 2026-08-10

  6. PrimaryU.S. v. Microsoft Corporation (Browser and Middleware) — case file index, US Department of Justice Antitrust Division

    Accessed 2026-08-10

  7. TertiaryMicrosoft — Wikipedia

    Accessed 2026-08-10

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