Microsoft Corporation

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

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).
• May 2024: Copilot+ PC announced; Recall feature pulled in June after privacy backlash.
• March 2024: Mustafa Suleyman, co-founder of DeepMind and Inflection, joins as EVP and CEO of the new Microsoft AI organisation, reporting to Nadella.
• 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.