Microsoft builds workplace software, operating systems and cloud infrastructure for consumers, businesses and government agencies, from small organizations to global enterprises. Microsoft 365 combines Word and Excel with Teams communication and Copilot AI features, while Windows runs PCs and Surface supplies the company's own computers. Azure rents computing capacity, storage and databases to build and run web applications. Microsoft also sells Xbox consoles and games, collecting revenue through software licenses, subscriptions, usage charges and product sales. Founded in 1975 by Bill Gates and Paul Allen, Microsoft is headquartered in Redmond, Washington.
Company Size
10,001+
Company Stage
IPO
Headquarters
Redmond, Washington
Founded
1975
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Investor Michael Burry, known for calling the 2008 housing crash, has warned that Microsoft and other big tech firms carry roughly $3 trillion in off-balance-sheet AI data-center liabilities. He said the companies are spending heavily because they assume they will get an oligopoly "too big to fail." Microsoft's capital spending in the June quarter was $41 billion, up 70% from a year ago. Its commercial remaining performance obligations, or contracted revenue not yet recognised, exceed $678 billion. Fourth-quarter revenue rose 18% to $90 billion, and net income rose 31% to $35.8 billion. Azure passed $100 billion in annual revenue. Shares are up 41% in three months. Analysts' consensus rating is "Strong Buy," with an average price target of $577.98.
Arena Physica has made Heaviside, its foundation model for electromagnetism, available on Microsoft Discovery, Microsoft's platform for agentic engineering. The company announced the move on October 13, 2026. Heaviside-1 has 350 million parameters and was trained on 250,000 3D field simulations. It predicts a design's full 3D electromagnetic field response in milliseconds, roughly 100,000 times faster than a traditional solver, and within a decibel of commercial accuracy. Traditional solvers can take hours or days per run, which makes design verification the main bottleneck. On Discovery, an agent can switch between Heaviside's predictions and a full-fidelity solver for final validation. Arena Physica expects strong uptake in semiconductors, including BGA packaging and SerDes interconnects. Discovery also offers audit logging and access controls to protect sensitive designs.
Venture capitalist Chamath Palihapitiya said power and physical infrastructure could be the lasting constraints in the AI race. He posted on X on Monday, after Microsoft announced its own silicon chips. Palihapitiya wrote that chipmakers will move up the stack while application companies move down it, so "everyone competes with everyone." He asked whether distribution, a data moat, or a physical limit such as power would support long-term margins. Elon Musk replied that scaling power, fast construction, cooling, networking, and batteries "is hard." Microsoft chief executive officer Satya Nadella said the company will scale its Maia chips to multi-gigawatt deployments starting next year. He said the Maia 300 delivers 40% more tokens per watt than leading GPU-based systems.
Peter Lee, who recently announced his departure as president of Microsoft Science, plans to join the Mercedes Formula 1 team as an AI advisor, he told Fortune. The role is newly created, and his title is still under discussion. Lee spent 16 years at Microsoft. At Mercedes, he will use AI to tackle car physics problems, break down data silos, build financial and predictive models, and advise on how regulators might govern AI in the sport. He is expected to sign a one-year contract with an option for a second. "I have always wanted to be a racer," Lee said. His exit follows other Microsoft departures this year, including Ryan Roslansky and Frank X. Shaw.
Microsoft has unveiled its latest homegrown Maia chips, part of an effort to rely less on outside semiconductor makers for its AI ambitions, Bloomberg reports. Elon Musk, meanwhile, wants to speed up chip development by testing as many as 10 new designs a year. Apple is also set to unveil its new smart home strategy, which seeks to fill a major gap in its ecosystem.