The deal removes a major constraint on raising capital for OpenAI, the maker of ChatGPT, and values the firm at $500bn.
Published On 28 Oct 202528 Oct 2025
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Microsoft and OpenAI have reached a deal to allow the ChatGPT maker to restructure itself into a public-benefit corporation, valuing OpenAI at $500bn and giving it more freedom in its business operations.
The deal, unveiled on Tuesday, removes a major constraint on raising capital for OpenAI that has existed since 2019.
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At the time, it had signed an agreement with Microsoft that gave the tech giant rights over much of OpenAI’s work in exchange for costly cloud computing services needed to carry it out. As its ChatGPT service exploded in popularity, those limitations had become a notable source of tension between the two companies.
Microsoft will still hold a stake of about $135bn, or 27 percent, in OpenAI Group PBC, which will be controlled by the OpenAI Foundation, a nonprofit, the companies said.
Microsoft, based in Redmond, Washington in the United States, has invested $13.8bn in OpenAI, with Tuesday’s deal implying that the firm had generated a return of nearly 10 times its investment.
Shares of Microsoft rose 2.5 percent, sending its market value above $4 trillion again.
The deal keeps the two firms intertwined until at least 2032, with a massive cloud computing contract and with Microsoft retaining some rights to OpenAI products and artificial intelligence (AI) models until then – even if OpenAI reaches artificial general intelligence (AGI), the point at which AI systems can match a well-educated human adult.
With more than 700 million weekly users as of September, ChatGPT has exploded in popularity to become the face of AI for many consumers after OpenAI’s founding as a nonprofit AI safety group.
As the company grew, the Microsoft deal constrained OpenAI’s ability to raise funds from outside investors and secure computing contracts as the crush of ChatGPT users and its research into new models caused its computing needs to skyrocket.
“OpenAI has completed its recapitalization, simplifying its corporate structure,” Bret Taylor, the OpenAI Foundation’s board chair, said in a blog post. “The nonprofit remains in control of the for-profit, and now has a direct path to major resources before AGI arrives.”
Microsoft’s previous 2019 agreement had many provisions that rested on when OpenAI reached that point, and the new deal requires an independent panel to verify OpenAI’s claims it has reached AGI.
“OpenAI still faces ongoing scrutiny around transparency, data usage, and safety oversight. But overall, this structure should provide a clearer path forward for innovation and accountability,” said Adam Sarhan, CEO of 50 Park Investments.
Gil Luria, head of technology research at DA Davidson, said the deal “resolves the longstanding issue of OpenAI being organized as a not-for-profit [organisation] and settles the ownership rights of the technology vis-a-vis Microsoft. The new structure should provide more clarity on OpenAI’s investment path, thus facilitating further fundraising.”
Microsoft also said that it has secured a deal with OpenAI where the ChatGPT maker will purchase $250bn of Microsoft Azure cloud computing services. In exchange, Microsoft will no longer have a right of first refusal to provide computing services to OpenAI.
Microsoft also said that it will not have any rights to hardware produced by OpenAI. In March, OpenAI bought longtime Apple design chief Jony Ive’s startup io Products in a $6.5bn deal.
Oct. 27 (UPI) — Australia’s consumer authority accused Microsoft of “deliberately” hiding subscription information from its Australian customer base.
On Monday, the Australian Competition and Consumer Commission sued the software giant for allegedly misleading more than 2.5 million Australian users over subscriptions to Microsoft 365.
“Following a detailed investigation, the ACCC alleges that Microsoft deliberately hid this third option, to retain the old plan at the old price, in order to increase the uptake of Copilot and the increased revenue from the Copilot integrated plans,” stated ACCC Chair Gina Cass-Gottlieb.
Australia’s CCC launched its Microsoft inquiry after reports that Microsoft allegedly misled its customers about price increases and options over subscriptions following the integration of its “Copilot” AI tool.
It alleged that Microsoft told users a higher price must be paid to keep subscriptions, which was to include Microsoft’s Copilot, or be forced to cancel.
According to Cass-Gottlieb, the ACCC will seek a penalty to demonstrate that non-compliance with Australia’s consumer laws was “not just a cost of doing business.”
Microsoft said it was reviewing the Australian government’s claim, adding that consumer trust and transparency were “top priorities.”
Last year in December, British digital rights advocacy groups launched a billion-dollar lawsuit against Microsoft, alleging it overcharged clients of its Windows Server software used in cloud computing.
The United States, Canada and Australia partnered over the summer in a global probe to identify hackers who attacked a security flaw in Microsoft software to internationally infiltrate agencies and businesses.
In May, U.S.-based Microsoft revealed it was axing roughly 6,000 jobs in its global workforce.
“We remain committed to working constructively with the regulator and ensuring our practices meet all legal and ethical standards,” a Microsoft spokesperson told ABC News in Australia on Monday.
Artificial intelligence is driving an acceleration in Microsoft’s cloud revenue growth.
Over the next few weeks, many of America’s largest technology companies will report their operating results for the quarter ended Sept. 30. They will provide investors with a valuable update on their progress in the artificial intelligence (AI) race, which is driving an enormous amount of value right now.
Sept. 30 marked the end of Microsoft‘s (MSFT -0.43%) fiscal 2026 first quarter, and it is scheduled to report those results on Oct. 29. The company’s Azure cloud computing platform and its Copilot virtual assistant will be key points of focus for Wall Street because they are at the center of the company’s AI strategy.
Microsoft stock has already climbed 25% year to date. Is it still a buy ahead of the Oct. 29 earnings report?
Microsoft launched its Copilot virtual assistant in early 2023. It was created using a combination of the company’s own AI models and those developed by its longtime partner OpenAI. The chatbot can be used for free in some of Microsoft’s flagship software products like Windows, Edge, and Bing, but it’s also available as a paid add-on for enterprise products like the 365 productivity suite.
Copilot can rapidly generate content in applications like Word and PowerPoint, autonomously transcribe meetings in Teams, and help users craft email replies in Outlook, so it has the potential to significantly increase productivity for enterprises. Microsoft says organizations around the world pay for over 400 million licenses for 365, all of which are candidates for the paid Copilot add-on, so the AI assistant could generate billions of dollars in recurring revenue for the company over the long term.
During the fiscal 2025 fourth quarter (ended June 30), Microsoft said several large customers expanded their Copilot adoption through 365. Barclays, for example, bought 100,000 licenses for its employees after running an initial test with 15,000, which implies a high degree of satisfaction with the assistant’s capabilities. This is the kind of information investors should look out for on Oct. 29, because it could be a predictor of future revenue.
But 365 isn’t Microsoft’s only enterprise opportunity when it comes to Copilot. There is Copilot Dragon, an innovative healthcare solution that autonomously documents millions of doctor-patient interactions, saving clinicians valuable time. Then there is Copilot Studio, a platform that allows businesses to create custom AI agents to automate workflows in any application, even those outside Microsoft’s ecosystem.
Microsoft’s Azure cloud platform operates hundreds of data centers spread across dozens of different regions around the world. They are fitted with the most advanced chips from suppliers like Nvidia and Advanced Micro Devices, and businesses rent the computing capacity from Azure to power their AI training and AI inference workloads.
Microsoft also launched Azure AI Foundry earlier this year, which ties many of the cloud platform’s AI services together to form a holistic solution for enterprises. It can be used to turn raw data into documents, build AI chat applications, deploy AI software, perform multimodal content processing, and more. It also offers access to the latest large language models (LLMs) from third parties like OpenAI to accelerate AI development.
Azure is regularly the fastest-growing part of Microsoft’s entire business, but it surprised even the most bullish analysts during the fiscal 2025 fourth quarter when its revenue soared by a whopping 39% year over year. It was the fastest growth rate in three years, and it marked a significant acceleration from the 33% growth Azure generated in the third quarter just three months earlier.
Demand for data center capacity and Foundry were the key drivers of the incredible result, so this is where investors should focus most of their attention on Oct. 29.
Microsoft stock isn’t cheap right now. It’s trading at a price-to-earnings (P/E) ratio of 38.3, which is a 14% premium to its five-year average of 33.5. It’s also notably more expensive than the 33.3 P/E of the Nasdaq-100 index, which is home to many of Microsoft’s big-tech peers.
MSFT PE Ratio data by YCharts
As a result, investors who are looking for short-term gains over the next few months might be left disappointed. That doesn’t mean the stock is a bad buy ahead of Oct. 29, but investors who pull the trigger must be willing to hold it for the long term — preferably for three to five years — to maximize their chances of earning a positive return.
One single quarter is unlikely to shift Microsoft’s momentum in either direction, but as long as Copilot adoption continues to expand and Azure’s revenue growth maintains its recent momentum, investors will probably be glad this stock is in their portfolio.
Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Microsoft, and Nvidia. The Motley Fool recommends Barclays Plc and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Microsoft’s Copilot is already helping generate billions in revenue, while Apple is in the midst of enhancing its iPhones with new AI features.
Microsoft (MSFT -0.15%) and Apple (AAPL 0.54%) are forever rivals. They are competitors in the personal computer market and for years have been the leading tech companies in the world. Even today, their valuations are similar. As of Tuesday’s close, Microsoft had a slight edge in market cap ($3.82 trillion versus $3.67 trillion).
There’s a new arena that could be their new battleground: artificial intelligence (AI). It’s still the early innings of AI deployment, and how their businesses evolve and adapt to AI remains a big question mark. But based on where they are today, which AI stock looks to be the better buy right now?
Image source: Getty Images.
Both of these companies already have large, robust businesses that can benefit from AI. Apple is a big name in consumer electronics with its iPads and iPhones being highly coveted products and, in some cases, status symbols. Microsoft, meanwhile, has its core in the business world with companies all over using its office products and cloud software for their day-to-day operational needs. They also both sell personal computers, with Microsoft focusing more on practicality and real-world business use, while Apple’s focus has been on simplicity and ease of use for the average user.
They both have many opportunities where AI can enhance their existing products in services. But the edge for sheer growth potential has to go Microsoft, simply because of how much broader its business has become over the years, especially in gaming, with it wrapping up its massive $69 billion acquisition of Activision Blizzard a couple of years ago.
AI has tremendous potential applications for these businesses. Many Apple users have been eagerly awaiting the launch of new AI-powered features for the company’s iPhones and were disappointed when they learned many of the key ones related to Siri will be pushed back until next year.
When that happens, however, that could trigger a flurry of upgrades and growth for the business. I don’t think a slow-and-steady approach will necessarily hurt Apple. In fact, it could end up being a smart move for the tech company by taking its time and ensuring everything is rolled out smoothly, to ensure that user privacy is well protected in the process.
Microsoft has already been enhancing its products and services with AI capabilities. However, there’s been plenty of debate about just how successful its Copilot AI really is. Salesforce CEO Marc Benioff has referred to it as “Clippy 2.0,” in reference to the frustrating assistant that Microsoft had years ago that users didn’t find all that helpful.
Apple deserves an edge when it comes to AI potential, simply for the massive wave of upgrades that could be coming if it hits it out of the park with its new iPhone features.
It’s always important to consider valuation when buying a stock, as buying at a high price may impact your ability to earn a good return from your investment in the future. For a while, Microsoft’s stock was trading at more of a premium to Apple’s stock, but in recent weeks, that gap has evaporated.
Data by YCharts.
This one is easy to decide: It’s a tie. Their price-to-earnings multiples are almost identical at this stage. But it is notable to see that prior to the announcement of reciprocal tariffs in April, it was Apple that was trading at more of a premium than Microsoft, and then the trend reversed, with Apple’s exposure to manufacturing its iPhones in China likely weighing down the stock for part of the year.
The stock I’d buy today is Apple. It has devoted fans who will be willing to upgrade to the newest iPhone, even under challenging economic conditions, if it means access to cutting-edge features. Apple may be slow in rolling out AI, but when it does, the execution can be a lot cleaner, polished, and better for users in the end than if it were rushed.
Microsoft, meanwhile, has been quick to rush out AI features for its software. However, in an increasingly crowded market for AI services, it may have a more difficult time keeping customers happy when there may be other, and potentially better, options to choose from.
Apple, may, in the end, benefit from being a bit slower in its AI deployment.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Salesforce. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Sept. 26 (UPI) — Microsoft has ended a portion of the Israel Ministry of Defense’s access to technology it used to spy on Palestinian civilians’ phone calls in Gaza and the West Bank, calling it a violation of Microsoft’s terms of service.
Late last week, Microsoft told Israeli officials that spy agency Unit 8200 were in violation of Microsoft’s terms of service by storing surveillance data in Azure, a cloud service, The Guardian reported.
Microsoft released a statement that it wrote to employees Thursday about its internal investigation after an article The Guardian published in August that revealed what the Ministry of Defense was using Azure for.
“While our review is ongoing, we have found evidence that supports elements of The Guardian’s reporting. This evidence includes information relating to IMOD consumption of Azure storage capacity in the Netherlands and the use of AI services,” Brad Smith, vice chair and president of Microsoft, said in the statement.
The Guardian conducted a joint investigation with +972 Magazine and the Hebrew-language outlet Local Call. The Guardian wrote that Microsoft and Unit 8200 had worked together on a plan to move large volumes of sensitive intelligence material into Azure.
According to The Guardian’s reporting, Unit 8200 built such a large database, it could collect, play back and analyze the cell phone calls of the entire population. So much so that a mantra emerged: “A million calls an hour.”
The information was stored in a Microsoft data center in the Netherlands, but soon after The Guardian’s reporting, the data appears to have been moved out of the country. The Guardian reports that sources said the Israel Defense Forces planned to move the data to an Amazon Web Services cloud.
“We therefore have informed IMOD of Microsoft’s decision to cease and disable specified IMOD subscriptions and their services, including their use of specific cloud storage and AI services and technologies,” Smith said. “We have reviewed this decision with IMOD and the steps we are taking to ensure compliance with our terms of service, focused on ensuring our services are not used for mass surveillance of civilians.”
Microsoft has faced strong pressure to disengage with Israel, including from its employees. In late August, two Microsoft employees were fired for allegedly breaking into Smith’s office.
An online group called No Azure for Apartheid announced on X that Microsoft fired them for “participating in a sit-in at the office of Brad Smith” at the Microsoft location in Redmond, Wash., to demand the company cut its ties to Israel.
Seven people were arrested that day, two of whom were Microsoft employees.
Microsoft just inked a $17.4 billion deal with a data center company backed by Nvidia.
For the first time since artificial intelligence (AI) captured Wall Street’s imagination, investors are beginning to broaden their scope beyond the “Magnificent Seven.” Two names that have attracted growing attention this year are Oracle and CoreWeave.
Unlike the tech titans that dominate headlines, Oracle and CoreWeave are carving out their niche at the infrastructure layer of the AI ecosystem. The opportunity they’ve identified is straightforward but also mission-critical: providing cloud-based access to GPUs. These chips — designed primarily by Nvidia and Advanced Micro Devices — remain supply constrained as they are largely absorbed by the world’s largest companies.
This supply imbalance has created an opportunity to enable AI model development by offering GPUs as a service — a business model that allows companies to rent chip capacity through cloud infrastructure. For businesses that cannot secure GPUs directly, infrastructure services are both time-saving and cost-efficient.
In the background, however, a small, albeit capable, company has been competing with Oracle and CoreWeave in the GPU-as-a-service landscape. Let’s explore how Nebius Group (NBIS 5.54%) is disrupting incumbents and why now is an interesting time to take a look at the stock for your portfolio.
Last week, Nebius announced a five-year, $17.4 billion infrastructure agreement with Microsoft. For reference, up until this point, Nebius’ management had been guiding for $1.1 billion in run rate annual recurring revenue (ARR) by December. I point this out to underscore just how transformative this contract is in terms of scale and duration.
The Microsoft deal not only places Nebius firmly alongside peers like Oracle and CoreWeave in the AI infrastructure conversation, but it also serves as validation that its technology is robust enough to meet the standards of a hyperscaler.
For Microsoft, the partnership is equally strategic. With GPUs in chronically short supply and long lead times to expand data center capacity, this agreement allows Microsoft to secure adequate compute resources without stretching internal infrastructure or assuming the upfront capital expenditure (capex) budget and execution risks that come with it.
Image source: Getty Images.
AI investment is not a cyclical trend — it’s a structural shift. Enterprises are deploying applications into production at unprecedented speed, workloads are scaling rapidly, and new use cases in areas like robotics and autonomous systems are emerging.
For companies that supply the compute underpinning this increasingly complex ecosystem, these dynamics create durable secular tailwinds. By securing Microsoft as a flagship customer, Nebius has established itself within this foundational layer of the AI infrastructure economy.
Since announcing its partnership with Microsoft, Nebius shares have surged roughly 39% as of this writing (Sept. 16). With that kind of momentum, it’s natural to wonder whether the stock has become expensive. To answer that, it helps to put its valuation in context.
Prior to the Microsoft deal, Nebius was guiding for $1.1 billion in ARR by year-end. If I assume Microsoft’s $17.4 billion commitment is evenly spread across five years (2026 to 2031), that adds about $3.5 billion annually — bringing Nebius’ pro forma ARR closer to $4.6 billion.
Against its current market cap of $21.3 billion, Nebius stock trades at an implied forward price-to-sales (P/S) ratio of 4.6. On the surface, that looks meaningfully discounted to peers like Oracle and CoreWeave.
ORCL PS Ratio data by YCharts
That said, there are important caveats to consider. My analysis assumes no customer attrition over the next several years — this is unrealistic due to competitive pressures. While Nebius may continue winning large-scale contracts, it’s also reasonable to expect some customer churn.
Moreover, comparing Nebius’ future ARR to Oracle’s and CoreWeave’s current revenue base is not an apples-to-apples match. Oracle, for example, has reportedly inked a $300 billion cloud deal with OpenAI. Meanwhile, CoreWeave also has multiyear, multibillion-dollar commitments tied to OpenAI. The catch is that OpenAI itself doesn’t have the cash on its balance sheet to fully fund these agreements — leaving questions about their viability.
In short, Nebius appears attractively valued relative to its peers — but the landscape is evolving quickly and riddled with moving parts. The more important takeaway is that Nebius is now winning significant business alongside its brand-name peers.
In my eyes, this validation in combination with ongoing structural demand tailwinds makes Nebius a compelling buy and hold opportunity as the AI infrastructure narrative continues to unfold.
Adam Spatacco has positions in Microsoft and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Microsoft, Nvidia, and Oracle. The Motley Fool recommends Nebius Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Nvidia’s decisions can have huge ripple effects through the AI world. But probably not this time.
Nvidia (NVDA 3.52%) enjoys great relationships with some of the biggest tech companies on the planet. Its customer base includes the three largest cloud service providers: Amazon (AMZN -0.16%), Microsoft (MSFT -0.30%), and Google parent Alphabet (GOOG 1.04%) (GOOGL 1.06%).
However, Nvidia’s reach isn’t limited to the biggest of the big. It also works closely with many rising stars. CoreWeave (CRWV 0.39%) is arguably the most prominent example, especially considering that Nvidia has a multibillion-dollar stake in the AI-focused hyperscaler.
It stands to reason that Nvidia wants all these partners to succeed. But did the GPU giant just help Amazon, Microsoft, and Google at CoreWeave’s expense?
Image source: Getty Images.
Nvidia launched DGX Cloud in 2023. The company billed the new platform as a way for enterprises to get immediate access to Nvidia’s AI supercomputers so they could train generative AI and other advanced AI models.
But Nvidia appears to be retreating from this market. The Information, a website that focuses on technology industry news, recently reported that Nvidia is primarily using DGX Cloud for internal use now instead of marketing the platform to customers.
Is there other evidence that supports the view that Nvidia is shifting its strategy? Maybe. In the past, Nvidia highlighted its DGX Cloud services when discussing cloud spending commitments in its quarterly 10-Q filings. In the company’s update for the second quarter of 2025, though, DGX Cloud wasn’t mentioned in this context.
Instead of marketing the DGX Cloud platform to customers, Nvidia appears to be focusing now on its Lepton GPU rental marketplace. CEO Jensen Huang explained in the May 2025 announcement of Lepton that the new service “connects our network of global GPU cloud providers with AI developers.”
Some industry observers saw DGX Cloud as a move for Nvidia to compete against the major cloud service providers. But Nvidia rented GPUs from CoreWeave to use with DGX Cloud. Could the company’s reported move to back away from marketing DGX Cloud help Amazon Web Services (AWS), Microsoft Azure, and Google Cloud while hurting CoreWeave? The short answer is “no.”
For one thing, Microsoft Azure and Google Cloud host DGX Cloud. Although AWS didn’t, there’s no solid proof that Nvidia’s cloud platform hurt its business.
A retreat from DGX Cloud wouldn’t hurt CoreWeave, either. CoreWeave recently disclosed that Nvidia will purchase $6.3 billion of its unused cloud computing capacity through April 13, 2032.
Perhaps most importantly, though, Nvidia might not be retreating from DGX Cloud as reported by The Information after all. According to Data Center Dynamics, Alexis Bjorlin, who is Nvidia’s vice president and general manager for DGX Cloud, said, “DGX Cloud is fully utilized and oversubscribed, and we are expanding its scale.”
Whatever Nvidia’s strategy with DGX Cloud is, I don’t think CoreWeave has anything to worry about. My view is that all of these stocks — Nvidia, Amazon, Microsoft, Alphabet, and CoreWeave — are poised to be big winners over the long run.
The AI boom doesn’t appear to be slowing down. That’s great news for Nvidia because more of its GPUs will be needed. It’s great news for Amazon, Microsoft, Alphabet, and CoreWeave because their cloud platforms will continue to enjoy tremendous demand.
It’s possible that the momentum could even accelerate. I think Nvidia’s technological advances will play a key role, if so. For example, the company plans to launch Rubin CPX, a new class of GPUs built for massive-context inference, in late 2026. This new technology could pave the way for an explosion in the use of AI in software development and long-form video creation.
As the smallest of the group, CoreWeave might have the most room to run. However, I expect all five of these top AI stocks will deliver tremendous gains over the next 10 years and beyond.
Keith Speights has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Zoe KleinmanTechnology editor
Getty ImagesMicrosoft says its new $30bn (£22bn) investment in the UK’s AI sector – its largest outside of the US – should significantly boost Britain’s economy in the next few years.
The package forms a major part of a £31bn agreement made between the UK government and various other US tech giants, including Nvidia and Google, to invest in British-based infrastructure to support AI technology, largely in the form of data centres.
Microsoft will also now be involved in the creation of a powerful new supercomputer in Loughton, Essex.
Speaking exclusively to the BBC Microsoft CEO Satya Nadella told the BBC of the tech’s potential impact on economic growth.”
“It may happen faster, so our hope is not ten years but maybe five”.
“Whenever anyone gets excited about AI, I want to see it ultimately in the economic growth and the GDP growth.”
Prime Minister Sir Keir Starmer said the US-UK deal marked “a generational step change in our relationship with the US”.
He added that the agreement was “creating highly skilled jobs, putting more money in people’s pockets and ensuring this partnership benefits every corner of the United Kingdom.”
The UK economy has remained stubbornly sluggish in recent months.
Nadella compared the economic benefits of the meteoric rise of AI with the impact of the personal computer when it became common in the workplace, about ten years after it first started scaling in the 1990s.
But there are also growing mutterings that AI is a very lucrative bubble that is about to burst. Nadella conceded that “all tech things are about booms and busts and bubbles” and warned that AI should not be over-hyped or under-hyped but also said the newborn tech would still bring about new products, new systems and new infrastructure.
He acknowledged that its energy consumption remains “very high” but argued that its potential benefits, especially in the fields of healthcare, public services, and business productivity, were worthwhile. He added that investing in data centres was “effectively” also investing in modernising the power grid but did not say that money would be shared directly with the UK’s power supplier, the National Grid.
The campaign group Foxglove has warned that the UK could end up “footing the bill for the colossal amounts of power the giants need”.
The supercomputer, to be built in Loughton, Essex, was already announced by the government in January, but Microsoft has now come on board to the project.
Mr Nadella, revealed the investment as Donald Trump has arrived in the UK on a three-day state visit.
The UK and US have signed a “Tech Prosperity Deal” as part of the visit, with an aim of strengthening ties on AI, quantum computing and nuclear power.
Google has promised £5bn for AI research and infrastructure over the next two years.
Nvidia also pledged to develop AI in the UK, which will help fuel innovation, economic growth and jobs, a spokesperson for the chip giant told the BBC.
The company said that along with its partners it will invest up to £11bn in the UK, in what it called the largest AI infrastructure rollout in the country’s history.
UK Chancellor Rachel Reeves also opened a £735m data centre as part of the investment on Tuesday in Hertfordshire.
There are some concerns that accepting so much money from US investors will mean the UK relies too much on foreign technology.
In July, Trump made clear his intentions were for the US to win global the AI race.
One of the ways it stated it would do this was to “export American AI to allies and partners.”
The UK government has signed number of deals with US technology companies, including an agreement to use OpenAI services in the public sector and a £400m contract to use Google Cloud services in the Ministry of Defence.
Satya Nadella said he thought the agreement defined “the next phase of globalisation” and argued that having access to foreign tech services leveraged digital sovereignty rather than threatened it.
On the growing issue of AI taking over jobs, Nadella said Microsoft also had to “change with the changes in technology”, having laid off thousands of staff this year despite record sales and profits. He described it as “the hard process of renewal”.
The government also said there was “potential for more than 5,000 jobs and billions in private investment” in north-east England, which has been designated as a new “AI growth zone“.
Last year, the government announced a £10bn investment into a data centre to be built near Blyth, Northumberland.
It has now announced another data centre project dubbed Stargate UK from OpenAI, chipmaker Nvidia, semiconductor company Arm and Nscale.
That will be based at Cobalt Park in Northumberland.
OpenAI boss Sam Altman said Stargate UK would “help accelerate scientific breakthroughs, improve productivity, and drive economic growth.”
However the UK version is a fraction of the firm’s US-based Stargate project, which OpenAI launched in January with a commitment to invest $500 billion over the next four years building new AI infrastructure for itself.
So far, reaction to the agreement has been broadly positive, but it is clear that there are many challenges ahead for the UK if it is to fulfil its intended potential.
The Tony Blair Institute described the news as a “breakthrough moment” but added that Britain had some work to do: “reforming planning rules, accelerating the delivery of clean energy projects, and building the necessary digital infrastructure for powering the country’s tech-enabled growth agenda,” said Dr Keegan McBride, the Tony Blair Institute for Global Change’s emerging tech and geopolitics expert.
Matthew Sinclair, UK director of the Computer & Communications Industry Association, hailed the agreement as “a powerful demonstration of the scale of the AI opportunity for the UK economy.”
But the Conservative Party highlighted that other big international companies such as the pharmaceutical giant Merck have recently cancelled or delayed their UK expansion plans.
Satya Nadella spoke to the BBC News in between board meetings, shortly before jumping on a flight to join Donald Trump as he arrives in the UK on a three-day state visit. Nadella will be among other tech leaders, including OpenAI’s Sam Altman and Nvidia’s Jensen Huang, attending the Royal state banquet on Wednesday.
He said he would use Microsoft’s AI tool Copilot to help him decide what to wear.
“I was very surprised that there was a very different dress protocol, which I’m really not sure that I’m ready for,” he said.
The European Commission has accepted commitments from Microsoft regarding its Teams platform to address competition concerns.
These commitments involve offering versions of Office 365 and Microsoft 365 suites without Teams, at a reduced price, and implementing other changes. The decision follows an investigation initiated by a complaint from Slack Technologies (now owned by Salesforce) and a similar complaint from alfaview.
EU regulators had preliminarily determined that Microsoft conferred an undue competitive advantage upon Teams and restricted competition in the market for cloud-based communication and collaboration products by bundling it with productivity applications such as Word, Excel, PowerPoint, and Outlook.
While Microsoft unbundled Teams after the EU probe commenced, regulators found the subsequent changes insufficient. Reports had indicated Microsoft was likely to avoid an antitrust fine as the EU regulators were expected to accept its offer.
With information from Reuters
Published on
12/09/2025 – 11:22 GMT+2
The European Commission on Friday accepted the concessions proposed by Microsoft concerning its Teams platform Teams to resolve an antitrust case it has been entangled in since July 2023.
To allay charges of abuse of dominance, Microsoft has proposed to offer customers its Office 365 and Microsoft 365 applications without Teams at a lower price than the suites including Teams and committed not to offering discount rates on Teams higher than those offered on suites without Teams.
It also offered interoperability to competitors with certain Microsoft products and proposed to allow customers to extract their Teams messaging data for use in competing solutions.
The case was opened in July 2023 following complaints from competing office platform Slack and in 2024 from Alfaview, accusing Microsoft of abusing its dominant position by bundling Teams with its Office and Microsoft 365 suites.
In June 2024, the Commission made a preliminary finding that the US tech giant was abusing its dominant position in the professional software market.
A year later, the Commission launched a market test on commitments offered by Microsoft which lead Slack and Alfaview to withdraw their complaints.
“Organisations big and small across Europe and around the world rely heavily on videoconferencing, chat and collaboration tools, especially since the coronavirus pandemic,” EU competition commissioner Teresa Ribera said in a statement, adding that the decision “opens up competition in this crucial market, and ensures that businesses can freely choose the communication and collaboration product that best suits their needs.”
The Commission’s decision makes Microsoft’s commitments binding for seven years and for 10 years regarding interoperability and data portability.
“We turn now to implementing these new obligations promptly and fully,” Nanna-Louise Linde, Vice President of Microsoft’s European Government Affairs, said in a statement.
If the company fails to meet its commitments, the Commission could impose a fine of up to 10% of its global annual revenue.
Microsoft reported its Azure cloud storage cables were severed over the weekend, slowing Internet traffic passing through the Middle East. File Photo by Mike Nelson\EPA-EFE
Sept. 7 (UPI) — One of Microsoft’s cloud services has been disrupted by severed cables below the surface of the Red Sea, the company said.
Users of Azure will experience delays in Internet traffic as it crosses through the Middle East, and the data has been rerouted, Microsoft said in a statement.
There were reports over the weekend that Internet traffic in the United Arab Emirates and some Asian countries had been affected, the BBC reported.
“Network traffic that does not traverse through the Middle East is not impacted,” Microsoft said.
NetBlocks, a company that monitors online Internet traffic, said Saturday that India and Pakistan were among the countries affected by the outage.
The cables were severed in water near the Saudi city of Jeddah, according to a social media post by the Pakistan Telecommunications company.
Severed Internet cables are a fairly routine occurrence, often the result of ships dropping anchor. Some cables, however, may have been cut deliberately, including several in 2024 that were severed between Asia and Europe about a month after the Yemeni government issued a warning that Iran-backed Houthi rebels threatened could sabotage communication cables and attack ships in the Red Sea.
The Houthis denied targeting the lines.
Since Russia’s latest invasion of Ukraine in 2022, several communication cables and gas lines beneath the surface of the Baltic Sea have also been severed.
President Trump is scheduled to dine with tech executives from Apple, Meta, Google and OpenAI on Thursday night at a White House event in the newly renovated Rose Garden.
The gathering is the latest example of how the world’s most powerful tech leaders are forging stronger ties with Trump’s second administration.
There’s one high-profile tech executive who won’t be at the gathering: Tesla and xAI Chief Executive Elon Musk, who backed Trump but then feuded with the president after temporarily leading an effort to slash government spending.
Musk posted on X that he “was invited, but unfortunately could not attend” and a representative would show up on his behalf.
The Hill first reported that roughly two dozen tech and business leaders, including Meta Chief Executive Mark Zuckerberg, Apple Chief Executive Tim Cook, Microsoft co-founder Bill Gates, Google Chief Executive Sundar Pichai and OpenAI Chief Executive Sam Altman, are on the invite list. The gathering is scheduled to take place after First Lady Melania Trump hosts an event for the new Artificial Intelligence Education task force.
“The president looks forward to welcoming top business, political, and tech leaders for this dinner and the many dinners to come on the new, beautiful Rose Garden patio,” White House spokesperson Davis Ingle told the Hill.
Meta declined to comment. Apple and xAI didn’t immediately respond to a request for comment.
Ahead of the dinner, Microsoft and OpenAI announced ways the companies are supporting the White House’s efforts to expand AI literacy. As AI disrupts industries including entertainment and healthcare, workers have expressed anxiety about whether they will lose their jobs.
OpenAI said it’s working with businesses such as Walmart and John Deere to build a platform that will help employers find workers with AI skills. The San Francisco tech company, which also has a platform where people can learn about AI, plans to offer certifications so workers can showcase how much they know about the technology. OpenAI said it aims to to certify 10 million Americans by 2030.
Microsoft outlined several ways it’s trying to help students and workers learn more AI skills through its grants, partnerships and products, including offering a year of Microsoft 365 Personal — which includes the company’s AI assistant Copilot — free for all U.S. college students if they sign up before the end of October.
“AI is the defining technology of our time, and how we empower people to use it will shape our country’s future,” said Microsoft Chief Executive Satya Nadella, who is also expected to attend the dinner, in a video. “That’s why we are so grateful to the President, First Lady and the entire administration for making it a national priority to prepare the next generation to harness AI’s power.”
Silicon Valley tech executives had a contentious relationship with Trump during his first term, sparring with the president over issues such as immigration.
They’ve struck a more friendly tone with the president during his second term as they push for a more hands-off approach to regulation while competing to dominate the artificial intelligence race.
In July, the Trump administration released an action plan that aimed to cut “red tape” so tech companies can quickly develop and deploy AI technology as they go head-to-head with firms in China and elsewhere. Trump tapped venture capitalist David Sacks, who is also expected to attend Thursday’s dinner, to guide the White House’s policy on AI and cryptocurrency.
As tech companies charge ahead, child safety and advocacy groups have raised concerns there aren’t enough guardrails in place to protect the mental health of young people as they spill their darkest thoughts to chatbots.
Trump has also publicly criticized many tech executives before striking deals with them. After Trump called for the resignation of Intel Chief Executive Lip-Bu Tan over alleged conflicts related to his reported investments in Chinese companies, tensions cooled after they met. Intel then announced in August that the U.S. government would take a roughly 10% stake in the semiconductor company.
Trump also struck an unusual deal with Nvidia and Advanced Micro Devices that allows the companies to sell certain chips to China in exchange for giving the U.S. government a 15% cut of those sales.
This raised questions among politicians and legal experts about whether that agreement is legal. Nvidia previously said it would spend up to $500 billion over the next four years on AI infrastructure.
Other tech executives have shown support for building in the United States as they face the threat of tariffs from the Trump administration. They also donated to Trump’s inaugural fund after he won the presidential election and have been showing up at high-profile events.
Apple in August pledged to spend an additional $100 billion on domestic manufacturing, bringing its total U.S. investment commitment to $600 billion after Trump criticized the company for expanding iPhone manufacturing in India.
OpenAI, Oracle and SoftBank announced this year that they planned to invest a total of $500 billion in U.S. AI infrastructure over the next four years.
Mandel increased his Amazon stake by a sizable amount.
Billionaire Steve Mandel and his hedge fund Lone Pine Capital have been a great one to follow for individual investors. Although some hedge funds have a poor record of underperforming the broader market, Mandel has substantially outperformed the market over the past three years. So, when he makes a move in his portfolio, investors should pay attention.
One thing Mandel did during Q2 was sell off some of his Microsoft shares. Although it wasn’t a massive move, the hedge fund reduced its position by about 5%. Then, Mandel used some of those funds to invest in another promising AI stock that has increased in value by nearly 800% over the past decade.
That stock? Amazon (AMZN -1.16%).
Image source: Getty Images.
Amazon may not be the first company that comes to mind when you think about AI. Instead, it probably seems more like an e-commerce investment. While that sentiment is true for the consumer-facing portion, the reality is that a large chunk of Amazon’s profits comes from AI-related revenue streams.
The biggest is from Amazon Web Services (AWS), its cloud computing arm. Cloud computing firms are having a strong year, thanks to the massive demand generated by AI workloads. Because more companies can’t justify spending millions (or even billions) of dollars on a data center dedicated to training AI models, it’s far more reasonable to rent computing power from a firm that already has the capacity. That’s the idea behind cloud computing, and it has translated into strong growth for the business unit.
In Q2, AWS’s sales rose 17% to $30.9 billion. That’s strong growth, but it is a bit slower than its peers, Microsoft Azure and Google Cloud, which each grew revenue by more than 30% in Q2. However, AWS is much larger than both of these units, so it shouldn’t surprise investors that AWS is growing at a slower rate. AWS accounted for about 18% of Amazon’s total revenue in Q2, but it made up 53% of its operating profit. That’s because AWS has far superior margins compared to its commerce business units, making AWS a critical part of the Amazon investment thesis.
AWS is experiencing a significant boost from AI, making it a strong stock pick in this space.
But Microsoft is also a solid AI pick, so why is Mandel moving from Microsoft to Amazon?
From a valuation perspective, both companies trade at fairly expensive levels for their growth. However, they’re both priced about the same from a forward price-to-earnings (P/E) standpoint.
AMZN PE Ratio (Forward) data by YCharts
One thing Amazon has going for it that Microsoft doesn’t is the steady upward pressure on Amazon’s margins. Thanks to AWS and its advertising service business units being the fastest growing in Amazon, its margins are steadily improving. Although Amazon’s revenue growth rate appears to be somewhat slow, its operating income growth rate is actually quite rapid.
AMZN Revenue (Quarterly YoY Growth) data by YCharts
This trend still has years to unfold, which is a solid reason to transition from Microsoft to Amazon. I believe this will be a winning trade over the long term, as Amazon’s profits are expected to grow at a significantly faster rate than Microsoft’s, resulting in the stock outperforming its peer over the long term due to their similar valuations.
However, both stocks are still solid AI picks, and you can’t go wrong with either one.
Keithen Drury has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Explosive growth drivers in AI, cloud, and gaming are fueling a massive upside opportunity for Microsoft shareholders.
Microsoft (MSFT +0.00%) is trading at over $500, but I believe it’s setting up for much bigger gains. With Azure’s 39% growth, artificial intelligence integration, and a $69 billion gaming bet, the company is positioning itself for explosive upside — despite fierce competition.
Stock prices used were the market prices of Aug. 26, 2025. The video was published on Aug. 29, 2025.
Rick Orford has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
Aug. 28 (UPI) — A pair of Microsoft employees were terminated for allegedly breaking into President Brad Smith‘s office.
An online group called No Azure for Apartheid announced Thursday on X that Microsoft employees Riki Fameli and Anna Hattle had been fired for “participating in a sit-in at the office of Brad Smith” at the Microsoft location in Redmond, Wash., to demand the company cut its ties to Israel.
Redmond Police announced on Tuesday that seven people were arrested that day for allegedly breaking into “an executive office” at Microsoft and refusing to leave.
All seven were taken into custody on charges of trespassing, resisting arrest and obstruction. The case remains under police investigation.
Smith held an online press conference Tuesday and confirmed that two Microsoft employees and a former Google employee were arrested in the incident.
“We need to keep our workplace safe and secure,” Smith said. “We need to keep our employees secure.”
“But obviously, as seven folks do as they did today, storm a building, occupy an office, lock other people out of the office, plant listening devices in crude form using phones, cell phones hidden under couches, behind books, that’s not OK,” Smith continued.
“When they’re asked to leave and they refuse, that’s not OK. That’s why, for those seven folks, the Redmond police literally had to take them out of the building,” Smith then said.
No Azure for Apartheid further announced that a “full campaign and press conference details” are “coming soon.”
The firings at Microsoft come after Google fired 28 employees last year in response to a series of protests that were partly focused on the company’s contract with the Israeli government, during which the office of CEO of Google’s cloud unit Thomas Kurian was breached.
MSNBC is being renamed after parent company Comcast spins the cable news channel off into a separate corporate entity later this year.
MSNBC will be known as MS NOW once it becomes part of Versant, a new company, and is no longer associated with NBC News, staffers were told Monday.
“Morning Joe” co-host Joe Scarborough informed viewers of the pending change on his program.
In a memo obtained by the Times, Versant Chief Executive Mark Lazarus indicated it was Comcast’s decision to remove NBC and its famous peacock logo from the MSNBC name.
“The peacock is synonymous with NBCUniversal, and it is a symbol they have decided to keep within the NBCU family,” Lazarus wrote. “This gives us the opportunity to chart our own path forward, create distinct brand identities, and establish an independent news organization following the spin.”
One person familiar with the name change discussions said the re-branding will be backed by a significant marketing campaign.
The MS NOW acronym will convey that the channel has a point of view, as the acronym stands for “my source,” news, opinion and world.
MSNBC will no longer share the resources of NBC News. The network is building its own news organization from scratch, with some NBC News journalists such as Jacob Soboroff choosing to join the cable operation.
MSNBC will also be leaving NBC’s Rockefeller Plaza headquarters for another Manhattan location.
Key MSNBC personalities such as Scarborough, Rachel Maddow, Ari Melber and Lawrence O’Donnell will remain a part of the channel after the spinoff.
Versant is the new stand-alone home for nearly all of the current parent company Comcast’s cable networks, which includes USA Network, the Golf Channel, CNBC and MSNBC. Comcast is spinning off the cable networks because it believes the mature outlets face a bleak future due to pay TV cord-cutting and are an albatross weighing down its stock price.
MSNBC, the second most watched cable news channel behind leader Fox News, has seen its reach into pay TV homes decline by 33% over the last 10 years.
MSNBC was founded in 1996 as a joint venture between NBC News and Microsoft. A name change was considered when Microsoft divested its stake in 2005, but NBC stuck with the moniker that had become entrenched in the media culture.
Israel’s elite cyber-intelligence unit stored vast volumes of intercepted Palestinian phone calls on Microsoft’s cloud servers, according to a joint investigation by The Guardian, +972 Magazine and Local Call.
The surveillance system, operational since 2022, was built by Unit 8200, the Israeli military’s secretive intelligence branch. It enables the unit to collect and retain recordings of millions of daily phone calls from Palestinians in Gaza and the occupied West Bank.
The revelations initially reported on Wednesday stem from leaked Microsoft documents and testimonies from 11 sources, including from Israeli military intelligence and the company.
According to the leaks, a large amount of the data appeared to be stored on Microsoft’s Azure servers located in the Netherlands and Ireland, the Guardian reported.
Three sources from Unit 8200 said that the cloud-based system helped guide deadly air strikes and shaped operations across the occupied Palestinian territories.
Microsoft said that CEO Satya Nadella, who met with Unit 8200’s commander Yossi Sariel in 2021, was unaware of the nature of the data to be stored. The company has said an internal review found “no evidence to date” that Azure or its artificial intelligence (AI) tools were “used to target or harm people”.
The revelations come after the United Nations special rapporteur on the situation of human rights in the occupied Palestinian territory, Francesca Albanese, issued a report mapping the corporations aiding Israel in its occupation and war on Gaza.
The report noted that Microsoft, which has operated in Israel since 1991, has built its largest hub outside the US in Israel and began integrating its technologies across the country’s military, police, prisons, schools, and settlements.
Since 2003, the company has deepened ties with Israeli defence, acquiring surveillance and cybersecurity start-ups and embedding its systems in military operations. In 2024, an Israeli colonel called cloud technologies such as those offered by Microsoft “a weapon in every sense”.
The Guardian reported that internal records at Microsoft showed that Nadella offered support for Sariel’s aim to move large volumes of military intelligence into the cloud.
A Microsoft statement cited by the Guardian said it “is not accurate” to say he provided his personal support for the project.
Microsoft engineers later worked closely with Israeli intelligence to embed security features within Azure, enabling the transfer of up to 70 percent of Unit 8200’s sensitive data to the platform.
While Israeli officials claim the technology helps thwart attacks, Unit 8200 sources said the system collects communications indiscriminately, which are often used to detain or blackmail Palestinians. “When they need to arrest someone and there isn’t a good enough reason … that’s where they find the excuse,” one source was cited as saying.
Some sources alleged the stored data had been used to justify detentions and even killings.
The system’s expansion coincided with a broader shift in Israeli surveillance, moving from targeted tracking to bulk monitoring of the Palestinian population. One AI-driven tool reportedly assigns risk scores to text messages based on certain trigger words, including discussions of weapons or martyrdom.
Sariel, who resigned in 2024 after Israel’s intelligence failure on October 7, 2023, had long championed cloud-based surveillance.
As Israel’s war on Gaza continues, with more than 61,250 Palestinians killed, including 18,000 children, the surveillance programme remains active. Sources said the existing data, combined with AI tools, continues to be used in military operations.
Microsoft claimed it had “no information” about the specific data stored by Unit 8200.
The surge comes following announced investments in AI after the company laid off thousands of workers earlier this month.
Microsoft is now the second company ever to surpass $4 trillion in market valuation, following artificial intelligence giant Nvidia.
Microsoft, which is traded under the ticker “MSFT”, is continuing to surge and as of noon in New York City (16:00 GMT) on Thursday, it is up 4.6 percent from the market open.
The technology behemoth said it will spend $30bn in capital spending for the first quarter of the current fiscal year to meet soaring artificial intelligence (AI) demand. Microsoft also reported booming sales in its Azure cloud computing business on Wednesday.
“It is in the process of becoming more of a cloud infrastructure business and a leader in enterprise AI, doing so very profitably and cash generatively despite the heavy AI capital expenditures,” said Gerrit Smit, lead portfolio manager, Stonehage Fleming Global Best Ideas Equity Fund.
Redmond, Washington-headquartered Microsoft first cracked the $1 trillion mark in April 2019.
Its move to $3 trillion was more measured than that of technology giants Nvidia and Apple, with AI-bellwether Nvidia tripling its value in just about a year and clinching the $4 trillion milestone before any other company on July 9.
In its earnings report, revenue topped $76.4bn.
“This was a slam-dunk quarter for MSFT [Microsoft] with cloud and AI driving significant business transformation across every sector and industry as the company continues to capitalize on the AI Revolution unfolding front and center,” Dan Ives, senior analyst at Wedbush Securities, said in a note provided to Al Jazeera.
Microsoft’s multibillion-dollar bet on OpenAI is proving to be a game-changer, powering its Office Suite and Azure offerings with cutting-edge AI and fuelling the stock to more than double its value since ChatGPT’s late-2022 debut.
Its capital expenditure forecast, its largest ever for a single quarter, has put it on track to potentially outspend its rivals over the next year.
“We closed out the fiscal year with a strong quarter, highlighted by Microsoft Cloud revenue reaching $46.7bn, up 27 percent [up 25 percent in constant currency] year-over-year,” Amy Hood, executive vice president and chief financial officer of Microsoft, said in a statement.
However, Microsoft’s surge in market value is overshadowed by a wave of layoffs at the tech giant. Earlier this month, the company laid off 9,000 people, representing 4 percent of its global workforce, while doubling down on AI.
Lately, breakthroughs in trade talks between the United States and its trading partners ahead of US President Donald Trump’s August 1 tariff deadline have buoyed stocks, propelling the S&P 500 and the Nasdaq to record highs.
Meta Platforms also doubled down on its AI ambitions, forecasting third-quarter revenue that blew past Wall Street estimates as artificial intelligence supercharged its core advertising business.
The social media giant upped the lower end of its annual capital spending by $2bn – just days after Alphabet made a similar move – signalling that Silicon Valley’s race to dominate the artificial-intelligence frontier is only accelerating.
Microsoft says cyber-espionage campaign ‘poses high risk’ to foreign embassies, diplomats and other groups in Moscow.
Microsoft has accused one of the Russian government’s premier cyber-espionage units of deploying malware against embassies and diplomatic organisations in Moscow by leveraging local internet service providers.
In a blog post on Thursday, Microsoft Threat Intelligence said the campaign by Russia’s Federal Security Service, also known as the FSB, “has been ongoing since at least 2024”.
The effort “poses a high risk to foreign embassies, diplomatic entities, and other sensitive organizations operating in Moscow, particularly to those entities who rely on local internet providers”, Microsoft said.
The analysis confirms for the first time that the FSB is conducting cyber-espionage at the ISP level, according to Microsoft’s findings.
“This means that diplomatic personnel using local ISP or telecommunications services in Russia are highly likely targets of [the campaign] within those services,” the blog post reads.
Microsoft tracked an alleged FSB cyber-espionage campaign that in February targeted unnamed foreign embassies in Moscow.
The FSB activity facilitates the installation of custom backdoors on targeted computers, which can be used to install additional malware, as well as steal data, Microsoft said.
The findings come amid increasing pressure from Washington for Moscow to agree to a ceasefire in its war in Ukraine and pledges from NATO countries to increase defence spending surrounding their own concerns about Russia.
Microsoft did not say which embassies were targeted by the FSB campaign.
The US Department of State, as well as Russian diplomats, did not respond to requests for comment from the Reuters news agency.
Russia has denied carrying out cyber-espionage operations. There was no immediate comment from Moscow on Microsoft’s report on Thursday.
The hacking unit linked to the activity, which Microsoft tracks as “Secret Blizzard” and others categorise as “Turla”, has been hacking governments, journalists and others for nearly 20 years, the US government said in May 2023.
The Shadowserver Foundation and Eye Security would not disclose which firms were affected.
A sweeping cyber espionage operation targeting Microsoft server software has compromised about 100 different organisations over the weekend.
Two of the organisations that helped uncover the attack announced their findings on Monday.
On Saturday, Microsoft issued an alert about “active attacks” on self-hosted SharePoint servers, which are widely used by organisations to share documents and collaborate within others. SharePoint instances run off of Microsoft servers were unaffected.
Dubbed a “zero-day” because it leverages a previously undisclosed digital weakness, the hacks allow spies to penetrate vulnerable servers and potentially drop a backdoor to secure continuous access to victim organisations.
Vaisha Bernard, the chief hacker at Eye Security, a Netherlands-based cybersecurity firm which discovered the hacking campaign targeting one of its clients on Friday, said that an internet scan carried out with the Shadowserver Foundation had uncovered nearly 100 victims altogether – and that was before the technique behind the hack was widely known.
“It’s unambiguous,” Bernard said. “Who knows what other adversaries have done since to place other backdoors.”
He declined to identify the affected organisations, saying that the relevant national authorities had been notified.
The Shadowserver Foundation confirmed the 100 figure and said that most of those affected were in the United States and Germany and that the victims included government organisations.
Another researcher said that, so far, the spying appeared to be the work of a single hacker or set of hackers.
“It’s possible that this will quickly change,” said Rafe Pilling, director of threat intelligence at Sophos, a British cybersecurity firm.
A Microsoft spokesperson said in an emailed statement that it had “provided security updates and encourages customers to install them”.
It was not clear who was behind the ongoing hack. The FBI said on Sunday it was aware of the attacks and was working closely with its federal and private-sector partners, but offered no other details. Britain’s National Cyber Security Centre said in a statement that it was aware of “a limited number” of targets in the United Kingdom. A researcher tracking the hacks said that the campaign appeared initially aimed at a narrow set of government-related organisations.
The pool of potential targets remains vast. According to data from Shodan, a search engine that helps to identify internet-linked equipment, more than 8,000 servers online could theoretically have already been compromised by hackers.
Those servers include major industrial firms, banks, auditors, healthcare companies and several US state-level and international government entities.
“The SharePoint incident appears to have created a broad level of compromise across a range of servers globally,” said Daniel Card of British cybersecurity consultancy, PwnDefend.
“Taking an assumed breach approach is wise, and it’s also important to understand that just applying the patch isn’t all that is required here.”
On Wall Street, Microsoft’s stock is about even with the market open as of 3pm in New York (19:00 GMT), up by only 0.06 percent, and has gone up more than 1.5 percent over the last five days of trading.