Microsoft CEO Satya Nadella says the company plans to expand use of its MAI model range as the company looks to offer customers lower-cost AI options.

The in-house models, unveiled by the company in June, are designed for specific enterprise tasks and span a range of areas, including image and voice generation, audio transcription, and coding.

In a blog post on 23 July, Nadella outlined the tech giant’s new ‘Frontier Diffusion and Control’ strategy, which aims to help customers reduce reliance on costly frontier models and emphasize the importance of model choice for specific use-cases.

The move by Microsoft comes amidst growing concerns about spiralling AI costs over the last six months. With trends such as ‘tokenmaxxing’ and the shift toward consumption-based pricing, some companies have been left with hefty bills as AI use accelerates.

“In a world where software has real marginal cost for the first time, how do we ensure frontier benefits are diffused across the entire ecosystem?” Nadella wrote.

“The key is to optimize the cost-to-outcome frontier in real-world context,” he added. “In practical terms, that means using the right model for each task, and optimizing the context, skills, tools, and agent harness around it.”

Boxing clever with AI model selection

Nadella’s contention here is that these in-house models can give customers “frontier capabilities” albeit in a cheaper, bespoke capacity.

Simply put, these are domain-specific models based for an enterprise’s individual needs, not a one-size-fits-all frontier model such as those offered by OpenAI or Anthropic.

These still form part of the broader “orchestration system” used alongside MAI, but all amounts to helping users box clever when choosing what model to use.

“These models have been built ground up with clean data lineage and optimized for learning transfer from generalist to specialized skills in enterprise RLEs,” he explained.

This will require enterprises to implement evaluation processes when considering which model to use in which context, he said.

“Product-specific evals and model independence give us the control and a direct hill to climb, and to keep refining until we reach the right quality-cost target,” Nadella wrote.

“We are now seeing MAI models outperform general-purpose frontier models in many use-cases while using a fraction of the tokens.”

Internal testing of MAI for its own products has so far delivered “promising early results”, according to Nadella. The company has piloted the use of these models in GitHub Copilot, Outlook, and other Microsoft 365 services.

The company plans to take the same approach with Copilot Chat, PowerPoint, and other services, he added.

Nadella’s comments align closely with recent research from Gartner on rising AI costs.

While focusing primarily on the use of AI in software engineering, the consultancy told ITPro that enterprises should establish a “use-case-driven decision” framework when using the technology for certain tasks.

This, Gartner noted, will help reduce costs by encouraging users to stop needlessly allocating agents to tasks they’re not designed for.

Microsoft eyes model diversity

Nadella’s blog post marks the latest in a string of comments made by the Microsoft chief hinting at the company’s efforts to diversify model choice - and to stop pushing frontier models on customers.

In mid-July, he warned about the risks of relying too heavily on frontier AI labs, describing what he called the “reverse information paradox”.

Nadella said enterprises are essentially “paying twice” for AI services, handing too much data to providers, and receiving little benefit in return.

These providers, meanwhile, gain valuable insights into customer products that could help them refine - or build - competing options.

"If learning flows in only one direction, economic value converges toward the owners of the learning infrastructure rather than the creators of the knowledge itself," he said.

"Therefore, it’s imperative that we distribute the learning infrastructure to every firm so that they can control their own learning loop.

As ITPro noted at the time, his comments were peculiar given the close ties the tech giant maintains with OpenAI and Anthropic, whose models are deeply entwined across its core product range.

Microsoft's long-standing relationship with OpenAI saw it take the lead as the go-to model for its software services, yet this changed last year after striking a deal with Anthropic to give users greater choice.

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Databricks and Microsoft are forging deeper ties with an expansion to the duo’s decade-long partnership, with a fresh focus placed on data management.

As part of the move, Databricks said it plans to expand use of Azure Databricks in core business operations and build a new, unified data lakehouse.

The move will also see the firm adopt Microsoft’s Arm-based VM infrastructure, Azure Cobalt, to “improve performance and efficiency”.

Microsoft, meanwhile, plans deeper integration of Databricks’ Data and AI platform across core product lines in a bid to provide customers with new tools such as Genie, the company’s flagship AI chatbot.

Databricks CEO and co-founder Ali Ghodsi said the expansion builds on long-standing ties and aims to accelerate customer data transformation efforts.

“For nearly a decade, Databricks and Microsoft have helped enterprises innovate with data and AI,” he said.

“Today, our partnership is stronger than ever. With Databricks Genie and Unity AI Gateway deeply integrated across Microsoft’s products, we’re helping enterprises unify their data and ground AI in business knowledge.”

Delivering business context

The partnership expansion aims to address key recurring hurdles for enterprises dabbling in AI innovation: data preparation and management.

AI systems, particularly agents, require fine-tuned data grounded in domain-specific context, according to the duo. Simply put, this means AI systems need to understand enterprise products, customers, operations, and general business processes to run efficiently.

A significant portion of enterprises are still struggling to bridge these gaps, however, and it risks derailing adoption processes, according to Judson Althoff, CEO of Microsoft’s commercial business.

“The next generation of AI will be defined by how effectively organizations turn their unique knowledge into intelligence,” Althoff said.

“Microsoft and Databricks are helping customers connect data, AI, and business context to accelerate decision-making and drive measurable impact.”

Databricks targets performance gains

A key focus of the partnership rests on expansion of Azure Cobalt for Databricks. The company said this will help improve performance and efficiency for agentic AI and ‘data-intensive’ workloads for customers.

The data analytics firm currently uses Cobalt 100. Looking ahead, the company plans to adopt Cobalt 200, which Microsoft noted offers up to 50% better performance and includes memory encryption by default.

Expansion of core business operations through Azure Databricks will also deliver performance improvements, the duo noted, enabling the firm to scale up capabilities for customers.

Genie integration

Deeper integration of Databricks’ Genie AI service within Azure also aims to simplify data management capabilities for customers, according to the firm.

Running the AI system directly within Microsoft environments will enable customers to ground and operate agents on data hosted within the cloud service. This means the AI tool will be “deeply integrated” with key Microsoft products, including:

• Azure Data Lake Storage
• Power BI
• Microsoft Foundry
• Microsoft 365, Teams, and Copilot

“These capabilities bring governed, real-time data and AI into business workflows, giving organisations the context, control, choice, and cost efficiency needed to drive impact,” the company said in a blog post.

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Microsoft has confirmed it blocked a recent Windows 11 update for select Dell PCs due to compatibility and performance issues.

The Patch Tuesday update (KB5101650) began rolling out on 14 July and included several quality improvements for users.

Microsoft halted the update after revealing a “number of Dell devices” began displaying a yellow exclamation point next to the Intel Innovation Platform Framework Processor Participant driver in Device Manager.

In a health status update, Microsoft said the issue meant users working with Intel devices could “potentially experience unexpected shutdowns, poor performance, increased heat, and battery drain”.

The issue affects Windows 11 versions 25H2 and 24H2, according to Microsoft.

What caused the pause?

The source of the issue is related to an “incompatibility between the Intel driver and the new Windows USB-C Connection Manager interface”.

The issue was first flagged in the wake of a preview update rolled out in late June (KB5095093). These previews are rolled out to enable IT administrators to familiarize themselves with upcoming patches.

Microsoft said it is working closely with Dell to “prevent the affected models from experiencing the issue”. A spokesperson for Dell echoed the tech giant’s comments on a fix.

“We are aware of an issue impacting a limited number of Windows devices with the Windows 11, version 25H2 and 24H2 (KB5101650) update,” the spokesperson said.

“Microsoft has temporarily paused the update for those devices and published guidance for impacted users, and we are working closely with them to support a resolution.”

ITPro asked Dell to confirm which specific devices were affected by the update, but the spokesperson did not reveal any further details.

An exact timeline on when users can expect a fix is also yet to be revealed by both companies, although Microsoft said it plans to release a resolution “in the next few days”.

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Microsoft’s Entra ID platform will now operate solely with passkeys as it looks to shift away from SMS and voice-based authentication practices.

The changes to the identity management platform, set to come into effect on 1 September 2026, will see passkeys established as the “default authentication experience” for users.

Microsoft urged customers to move to passkeys or alternative phishing-resistant methods before the changeover.

“As the rollout reaches each organization, users enabled for SMS or voice authentication will automatically be enabled for passkeys, and the next time they perform multi-factor authentication, they’ll be prompted to register a passkey,” the company explained in a blog post.

There is a grace period, however, with voice and SMS-based authentication still being possible until 1 February 2027. After that deadline, Microsoft will retire telecom delivery for both authentication methods and no longer offer SMS and voice as a “native Microsoft Entra capability.”

For those organizations that still require SMS or voice-based authentication, there is the option to do so via the Microsoft Security Store, where administrators can find approved telecom partners to facilitate this need.

This may incur additional costs, however, with Microsoft warning: "Customers will be responsible for any associated telecom-related costs charged by the telecom partners."

Why is Microsoft moving to passkeys?

According to Microsoft, the shift to passkeys is in response to growing concerns over credential theft, phishing, and social engineering attacks.

AI, the company added, has also prompted a rethink of identity security and a move away from “phishable methods” such as voice and SMS-based authentication.

“Authentication methods that use SMS or voice rely on shared secrets or channels that attackers increasingly intercept, phish, or manipulate,” Microsoft explained.

“The case for moving beyond SMS and voice is no longer just that attackers intercept or socially engineer these methods. The threat environment has changed in speed, scale, and sophistication.”

Microsoft said its Threat Intelligence division has observed a marked rise in AI-enabled phishing campaigns in recent months, with these methods reaching click-through rates as high as 54%.

That’s a stark contrast compared to the 12% click-through rates typically observed in traditional campaigns, highlighting the potency of this new wave of attacks.

Other tactics employed by threat actors, such as SIM swapping and MFA bypass techniques, have also become “more accessible and repeatable”, Microsoft noted.

As ITPro reported earlier this year, AI-generated phishing campaigns have become a recurring concern for cybersecurity leaders.

Research from Kaseya suggested that AI phishing “became the baseline” for threat actors in 2025: 83% of phishing emails used AI in some capacity, while 40% of business email compromise (BEC) attacks also fared similarly.

Why passkeys?

Passkeys are touted as a more reliable and secure method of authentication, as they tie credentials to a specific device, such as a smartphone or laptop. This removes the need for interceptable codes.

Indeed, Microsoft noted that because they use public-key cryptography rather than “shared secrets”, this makes them phishing-resistant by design.

“They also provide a faster, simpler sign-in experience for users,” the company noted.

Microsoft isn’t alone in advising the shift to passkeys. Earlier this year, the UK’s National Cyber Security Centre (NCSC) urged enterprises and consumers alike to adopt passkeys to provide “stronger resilience” and ease-of-use.

“We strongly advise all organizations to implement passkeys wherever possible to enhance security, provide users with faster, frictionless logins and to save significant costs on SMS authentication," NCSC CTO Ollie Whitehouse said at the time.

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Companies using AI should be wary about losing control of their data – and the risk of AI developers making use of that knowledge.

That’s according to Microsoft CEO Satya Nadella, who in a recent blog post warned many AI users are "paying twice" thanks to what he calls the "reverse information paradox”.

This is a process through which AI providers, particularly frontier labs, get access to proprietary data about their own customers. Nadella said the trend represents a huge risk for enterprises, and called for protections akin to patents.

The critique is intriguing as Microsoft itself is an AI company, offering plenty of AI-driven products to customers and cramming AI features into its software. Beyond that, Microsoft was an early funder of OpenAI, though that relationship has weakened of late.

Nadella pointed to economist Kenneth Arrow's information paradox, in which the seller of data or knowledge risks giving it away in order to prove it's worth selling. He noted that AI has created the reverse problem, in which the buyer gives away knowledge in order to use the product purchased.

"You essentially pay for intelligence twice, once with money, and again with something even more valuable: the proprietary knowledge you must reveal to make that intelligence useful," he noted. "The better you want the model to perform, the more of that knowledge you have to feed it!"

"Over time, the information asymmetry becomes increasingly skewed. The seller learns more and more about you as you use what you purchased, while you learn very little about what the seller is learning in return."

The ‘AI exhaust’

This concern isn't just about uploading corporate data to systems, or accidentally including proprietary data in a prompt, though those are both concerns. Instead, Nadella said every interaction with AI inherently includes information that could be useful.

"Models learn from 'exhaust,' the prompts people write, the tools agents use, and especially the corrections people make when the model is wrong," he wrote.

"Every correction is distilled into institutional know-how. It’s the kind of knowledge a competitor could never buy, and the kind that leaks almost imperceptibly: trace by trace, correction by correction, eval by eval."

Ironically, Nadella said it was necessary for the "great innovation" of allowing model developers to use public data – some of them face lawsuits for hoovering up copyrighted data to train their systems.

When it comes to business data, providers should share anything learned with customers. Very few actually do this, however.

"If learning flows in only one direction, economic value converges toward the owners of the learning infrastructure rather than the creators of the knowledge itself," he said. "Therefore, it’s imperative that we distribute the learning infrastructure to every firm so that they can control their own learning loop."

Nadella's tips on how to protect your company from AI

Nadella said the existing setup requires a protection system on par with patents, but also advised companies to set a "trust boundary" by considering a few key aspects – some of which may be easier by simply switching to open source AI.

He suggested companies should control their own "evals", or evaluations of the AI system, because that reveals what looks "good" to the organization, and keep ownership of decisions, feedbacks, and other outputs for their own use.

Beyond that, companies should build capability with AI via their own learning environments where models can learn using real workflows without exposing corporate data.

Improving choice can be achieved by decoupling the orchestration layer from any single model, enabling the ability to switch to another model if one is withdrawn. This can also help organizations cut costs by choosing the right model based on their individual needs.

Lastly, he said to "compound" those four ideas to "create your own continuous learning loop".

"In other words, a company should be able to use a model without giving up the knowledge that makes it unique," he added.

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The Microsoft Surface Laptop is back with an 8th edition for 2026. It comes with some great features and, due to the ongoing issues with RAM supply, a bigger price tag.

We have the 'For Business' model of the Laptop 8, which can be purchased in 13in, 13.8in, and also 15in. While the 13in is the most compact Surface Laptop yet, our review is focused on the 13.8in model with the Intel Core Ultra X7 368H chip.

Microsoft Surface Laptop 8: Design

Much like last year's Surface Laptop 7, the 8th edition is a handsome beast. It keeps the same design as the 15in model ITPro tested last year, with a minimalist look. It has a compact chassis with a sleek black finish and a nice, light aluminium body, which is around 1.35kg. The business model that we have is made with a minimum of 61.9% recycled materials, including 100% recycled aluminium alloy and 100% recycled rare earth metals.

The standard Laptop 8 comes in Platinum, Jade, Dune (a sort of sandy orange), and Black. But this is the for-business version, so we have it in black. You also get a serious but reflective Windows logo on the lid and a notchless design with specific balancing on the lid that allows you to open it with one finger.

On the left-hand side, the Laptop 8 features a headphone jack, a USB-A (3.1), and two Thunderbolt 4 ports for charging and data transfer. On the right, there is just a magnetic Surface Connect port. HDMI and some form of memory card would have been nice, though you do get a MicroSDXC Express card reader on the 15in model.

Microsoft Surface Laptop 8: Display

As mentioned, our review unit has the 13.8in display: much like last year, it has a PixelSense HDR LCD panel, with 2304 x 1536 resolution and a 120Hz refresh rate. It also boasts a ten-point touchscreen, though our 13.8in model has a matte finish – so there is next to no glare.

Visibility won't be an issue for the Surface Laptop 8. Much like Samsung's Galaxy S26, the Laptop 8 comes with a privacy display, which is activated via a button on the function row. Once this is on, no one will be able to see your display from the side – though it is still oddly visible from above.

In our tests, it hit a peak brightness of 444.08 cd/m2, which is actually lower than the Surface Laptop 7 we tested. But it's still very bright and punchy. Similarly, its colors are glorious. It showcased 99.7% for sRGB gamut color coverage (144.5% for volume). It also scored high in Adobe sRGB with 86.6% for coverage and 99.6% for volume -- Those are great scores, and I did find it good for photo editing.

I also did some video editing on the Surface Laptop 8, and while it might not have the biggest display, it is highly capable. The touchscreen element is very useful here, though it can be fiddly when tweaking volume levels with fingers – a job best left to the trackpad.

Microsoft Surface Laptop 8: Keyboard and trackpad

The keyboard on the Surface Laptop 8 is smart and professional-looking, color-matched to the rest of the build, and has nice-sized keys. The volume keys are on the left-hand side of the function row, and F1 is for the all-new privacy display.

I found typing really smooth on the keyboard as it has plenty of travel. Unless you type with the brute force of Erling Haaland, you won't hear much noise from the Surface Laptop's keyboard. Just a faint muffled clack. I could hardly hear it over my desk fan, for instance. It's both really good and slightly unsettling.

There are little tweaks on the touchpad that make a big difference to the user. The haptic feedback, for example, has been subtly improved or increased. You just get a little bit more feel for clicking and closing applications – it's very nice.

Microsoft Surface Laptop 8: Specs and Performance

There are Snapdragon models of the Surface Laptop 8, though the business variants are Panther Lake affairs. Specifically, the 13.8in model we have is sporting the Intel Core Ultra X7 368H chip and 32GB LPDDR5x RAM.

I can't complain about the performance or really compare it to the Snapdragon models, though it is worth noting that the Laptop 7 did seem to be stronger and smoother with Snapdragon.

In Geekbench 6, our Panther Lake mode hit 2,764 single-core workloads and 14,485 for multi-threaded. Both scores are high, maybe not M5 MacBook Pro high, but high nonetheless. Though it is worth pointing out that the multithreaded score for the 8 was slightly lower than the 15in Laptop 7. But only slightly.

In our looped video test, where we play 20 minutes of Spider-Man 2 with the display set to 170cd/m2, the Surface Laptop 8 lasted 18hrs 43mins. That's over ten minutes more than our Surface Laptop 7 review. In real terms, it never let me down. I took it out into the world for a day and didn't need a charge. It has staying power.

Microsoft Surface Laptop 8: Features

The 8 comes with a 1080p Surface Studio camera (Full HD) with support for Windows Studio Effects. So you get automatic eye framing, blurred backgrounds, and facial recognition with Windows Hello. From my own personal use, the webcam is very crisp, and there's a lot of artificial touching up – I've never looked better in work meetings.

Much of this is down to the on-device AI, powered by the Intel AI Boost NPU (48 TOPS). So you have AI shortcuts with the Copilot button, image enhancements, and the now-usual generative AI shortcuts for summarization and text generation. It's all very flashy, but not incredibly useful.

Microsoft Surface Laptop 8: Is it worth it?

There's lots to love on the Microsoft Surface Laptop 8; its battery life is great, the keyboard and touchpad are excellent, the display is bright and beautiful, and you get some privacy, provided no one simply looks over the top of the screen. All in all, it's a solid business machine.

Pricing might be its biggest issue (£1,599.99), but given the global state of RAM, that can be said for most premium laptops. So, taking that into account, there is generally some value for money here.

Microsoft Surface Laptop 8 specifications

Forward deployed engineers (FDEs) could be the key to driving successful AI deployments, as hyperscalers pledge billions to embed specialists within customer teams.

Last week, Microsoft announced plans to invest $2.5 billion in a new division, the Microsoft Frontier Company. The aim here is to deploy upwards of 6,000 AI experts and engineers inside customer organizations.

These specialists will work with enterprises to co-design and build AI systems in a bid to accelerate adoption rates, according to the tech giant.

The announcement came just days after Amazon Web Services (AWS) announced similar plans with a $1 billion investment in its Forward Deployed Engineering segment, once again aimed at bolstering customer AI capabilities.

With the scale of investment – and sheer number of engineers required – for AWS and Microsoft’s push on this front, FDEs are rapidly emerging as the most sought-after technology professionals globally.

Alastair Williamson‑Pound, CTO at Mercator Digital consultancy, told ITPro that the focus on FDEs is an “exceptionally strong signal” that this could become a key growth area for the industry – and a vital pool of talent to drive AI adoption.

“FDEs have become increasingly critical because they sit inside the client, where they can drop barriers, cut through red tape, and get in front of the decision-makers quickly,” he said.

“It’s perhaps why we’re increasingly seeing them considered as a commercial weapon by cloud providers to secure long-term relationships and spend,” he added.

“Another good aspect is that pricing is fixed and based on outcomes rather than time and materials (T&M), which gives customers greater certainty around delivery.”

Williamson‑Pound noted that this aligns with “what companies are after these days”, mainly support in pushing AI adoption projects from pilot to production.

AWS noted that its FDE strategy aims to “compress timelines from months to days” in terms of AI progress, and is “designed so customers are self-sufficient when a deployment ends”.

“Those organizations that are stuck between piloting and deployment can be given that final push by [an] FDE,” he commented.

“The training and documentation they leave behind also tends to give customers that final confidence boost, helping internal teams continue developing and maintaining the system by themselves.”

The rise of forward deployed engineers

Microsoft and AWS are by no means the first big tech providers to put their faith in FDEs. Palantir somewhat pioneered this approach more than a decade ago, and other companies in the AI space have ramped up activities on this front.

As ITPro reported in May, OpenAI launched a new consultancy arm aimed at embedding engineers within customer organizations.

A key distinction here, however, is that the OpenAI Deployment Company is a standalone entity, while both Microsoft and AWS have their own internal divisions dedicated to FDEs.

Crucially, both moves mark the latest attempt by big tech providers to move the needle with regard to enterprise AI adoption, which research shows has been sluggish and at times underwhelming.

Analysis from PwC in January this year found that executives have become increasingly restless when it comes to returns on investment (ROI). Separate research, meanwhile, shows a significant portion of AI projects fail at the first hurdle.

A key factor in adoption project failure often lies in technical capabilities, or lack thereof, according to research from Dynatrace.

With this in mind, providing enterprises with a helping hand throughout the process could provide a much-needed boost for IT leaders.

Initial feedback on Microsoft’s FDE activities show promise on this front, according to Judson Althoff, CEO of Microsoft’s commercial business. In a blog post last week, Althoff claimed that early results have demonstrated “meaningful impact”.

The tech giant embedded engineers within the London Stock Exchange Group (LSEG), for example, helping accelerate AI adoption and providing finance pros with tools to provide answers to complex queries.

Close collaboration between Microsoft’s FDEs and frontline staff at LSEG helped streamline adoption and essentially create a foundation for future improvements, according to Althoff.

“The solution is underpinned by a foundation that is iteratively refined through client feedback and real-time user testing that accelerates each cycle and steadily improves model quality and scope,” he wrote.

Partnerships with Unilever and Novo Nordisk have also delivered marked improvements in terms of AI adoption, Althoff noted.

How FDEs work

FDEs essentially operate like systems integrators (SI), albeit with a few notable distinctions. An SI, for example, is typically an external contractor used to streamline the adoption of individual solutions.

With FDEs, these engineers act as consultants embedded directly within the enterprise. They also offer technical guidance, but it’s the practical support in terms of custom product development that’s a key differentiator. Simply put, they’re building alongside your own engineers.

“Typically, FDEs work in small pods for a fixed period of time, during which they sit within the engineering and technical teams of the client, writing production grade code,” Williamson-Pound explained.

“They leave the customer with a working system in place supported by full documentation, as opposed to an implementation plan.”

JetBrains CEO Kirill Skrygan told ITPro there are a range of benefits to using FDEs for enterprises, and they’re more than just a temporary boost to engineering capabilities.

“FDEs work closely with customers to translate complex organizational challenges into solutions that technology can actually deliver. Doing that well requires more than coding ability," he said.

“It demands architectural expertise, technical leadership, communication skills, and sound business judgment — all qualities that are difficult to automate.”

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Kyndryl is aiming to boost sovereign capabilities through a new deal with Microsoft designed to help customers keep up with evolving data residency requirements.

Governments and highly regulated industries are increasingly facing geopolitical uncertainty, expanding data localization preferences, and ever more complex IT environments, according to Kyndryl.

With this in mind, the company argues that regulatory frameworks such as GDPR, DORA, and NIS2 need to be translated into practical architectures. The aim of this deal is to combine Kyndryl’s advisory, engineering, and operational experience with Microsoft’s sovereign cloud offerings to address these needs.

The collaboration combines Kyndryl Sovereignty Solutioning with Microsoft Sovereign Cloud capabilities, and brings to the table the full spectrum of Microsoft’s public cloud capabilities and private cloud solutions using Azure Local.

This, Kyndryl said, will help organizations address sovereignty across data and operational domains, helping to reduce regulatory framework complexity.

“Kyndryl understands the reality of sovereignty through our first-hand experience with government expectations in Europe, and our strategic alliance with Microsoft brings together complementary strengths to help customers operationalize sovereignty in a practical, scalable way,” said Giovanni Carraro, global strategic alliances leader at Kyndryl.

“By collaborating with Microsoft, we can help customers align their sovereignty goals with real-world architectures, thus balancing control, resilience and performance across hybrid and distributed environments.”

Kyndryl eyes sovereign ‘readiness’

Customers can use Kyndryl’s Sovereignty Readiness Assessment to evaluate their current posture across data, operational, and technical domains, identify any gaps and dependencies and develop a phased roadmap.

The firm said it aims to support implementation using sovereignty-ready architectures that incorporate Microsoft Sovereign Cloud capabilities.

This includes public cloud solutions using Microsoft Azure and Microsoft 365, along with sovereign private cloud solutions using Azure Local in connected and disconnected deployment models.

These are designed to support varying levels of data residency, operational independence, and jurisdictional control as needed.

This unified approach, Kyndryl noted, supports sensitive and regulated workloads, including AI-enabled use cases, with a focus on data governance and model locality.

"Kyndryl’s deep expertise in designing and operating complex, regulated environments complements Microsoft’s comprehensive sovereign cloud capabilities, including controls designed to support data residency requirements, access governance and regulatory compliance,” said Ihab Foudeh, EMEA enterprise partner solutions general manager at Microsoft.

“Together, we are helping organizations adopt cloud services in ways that respect their local requirements while still enabling modernization and innovation.”

Sovereignty momentum

The move by Kyndryl comes amid a concerted focus on digital sovereignty across Europe. Recent research from Gartner, for example, revealed that a third of countries will be locked in to region-specific AI platforms within the next two years.

This shift is driven by a mixture of regulatory pressure, geopolitics, cloud localization, national AI missions, corporate risks, and national security concerns.

In a separate survey of UK IT decision makers last year, almost two-thirds told OVHcloud they were happy to pay between 11% and 30% more for a sovereign technology product that would meet all of their regulatory and sovereignty needs.

More than half acknowledged data sovereignty as a crucial aspect of their data management strategy.

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Commvault has announced a new multi-year strategic partnership with Microsoft that will see its cyber resilience platform offered as a native independent software vendor (ISV) service on Microsoft Azure.

The agreement builds on a collaboration spanning more than 25 years and aims to simplify how Azure customers deploy and manage Commvault’s data protection and recovery capabilities.

The partnership will see Commvault Cloud become available directly through Azure, allowing customers to discover, provision, and integrate resilience services from within the cloud platform.

According to the software vendor, the move addresses growing demand for cyber resilience as organizations expand their cloud deployments, ramp up AI adoption, and contend with an increasingly complex security landscape.

Slated for public preview this summer, the native service will provide customers with a more unified experience across procurement, onboarding, and management – ultimately reducing the need for separate infrastructure, external tools, and manual integrations.

In an announcement, Commvault president and CEO Sanjay Mirchandani said the agreement will take the company’s long-standing relationship with Microsoft “to the next level.”

“Many of our customers rely on Microsoft Azure to scale their business in the cloud, use AI, optimise operations, and bring ideas to life,” he commented. “With this joint commitment, we can also make best-in-class resilience plug-and-play for Microsoft customers.”

Native Azure integration

Commvault said the native Azure service will introduce a number of operational benefits, including automatic resource discovery, faster deployment, simplified management, and reduced operational complexity.

The offering is also expected to help organizations improve their ability to recover data, applications, and identities in the event of cyber attacks, outages, or incidents of human error.

Additionally, customers will be able to purchase Commvault Cloud through the Microsoft Marketplace and apply spending towards their Microsoft Azure Consumption Commitment (MACC), helping to align resilience investments with existing cloud expenditure.

“Customers rely on Azure as a resilient foundation for their cloud and AI workloads,” said Girish Bablani, president of Azure Core at Microsoft. “Supporting Commvault natively gives them more choice in how they protect and recover their data, with a more seamless experience inside Azure.”

Alongside the technical integration, Commvault and Microsoft said they will collaborate on joint go-to-market initiatives, including co-selling activities, solution development, and integrated sales efforts geared toward accelerating customers’ cloud journeys and cyber resilience initiatives.

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Windows may be a timeless OS, and practically synonymous with modern PCs, but that doesn't mean it's well-loved by its users. In fact, the opposite might be true in some instances, according to anecdotal evidence as well as reports by publications like Windows Central.

While the development world is far from a homogeneous blob, anecdotal consensus suggests that Windows 11 is the least enjoyed mainstream platform for developers, with systems like macOS and Linux overwhelmingly preferred. But why does Windows 11 have such a bad reputation among developers, anecdotally at least?

Whether it's on internet forums, in blog posts, or in our conversations with experts, Windows 11 is often snubbed in favour of macOS or Linux, depending on the context. In fact, one of the best advantages of Windows, developers say, is the capacity to run Linux on mainstream hardware. There are, of course, some advantages to using Windows 11 for development – but what could Microsoft do to get more developers on board?

Which OS do coders and programmers really prefer?

ITPro consulted with more than a dozen programmers, engineers, and developers to understand why they use the platforms they do, and whether Microsoft has the potential to transform Windows into an attractive destination for coding.

Little research exists into which OS developers truly prefer, although Stack Overflow findings suggest that Windows is the dominant platform in which they work; nearly half (49.5%) use it over alternatives, including macOS (32.9%) and Ubuntu (27.7%), among others. But just because Windows is the "primary [OS] in which you work" — that doesn't mean it's the OS of choice, with organizations and administrators usually calling the shots more often than not.

The developers we spoke with were divided evenly between the three major systems – Windows, macOS, and Linux — with some even using all three depending on the task. However, when we asked which OS they prefer to code on, none answered Windows.

The vast majority say they preferred using macOS when coding, including Mike McQuaid, project lead of Homebrew, the open source package manager. "Apple and the wider ecosystem seem to care more about design and building high-quality applications for free or a reasonable one-off price."

What's the trouble with Windows 11?

McQuaid tells ITPro that "Microsoft’s developer experience on their platforms has never been great", with critique among those we spoke with ranging from concerns with the tools available to the notion that Microsoft is simply less easy on the eye. Where developers use Windows, it's largely because "that's the corporate choice", as Egor Danilkov, global development director at Innowise, neatly summarized it.

The OS is, however, "cumbersome", according to Nikita Kuznetsov, founder and developer of GameAP, an open-source game server management panel, and "ships with tools I don't need"; "the ones I do need have to be installed and configured manually". Some tooling is built for POSIX systems (Linux and macOS) first and is then ported to Windows, so these versions don't always behave as expected.

Many complaints center on inconsistency, with the notion that different developers on identical Windows hardware may end up with environments that behave differently. Windows is also a massive target and attracts far more malicious attention.

There's also the question of how "managed" company machines are. That's something that Jessica Kerr, engineering manager of developer relations at Honeycomb, an observability platform, can attest to.

"Companies can put more restrictions on Windows machines, and these restrictions hamper developers. As a software engineer, I install software. I run unverified, unapproved apps (for instance, when I’m writing them)," she says. "I access the file system from the command line and write scripts and run ad-hoc programs. Windows computers can be locked down, and Macs… if they can be locked down like that, I’ve never seen a company do it."

Much of the feedback around Apple's flagship OS is around the Unix-based terminal, which feels more natural to use and can be very powerful, as well as the fact that shell scripting, SSH, and command-line tooling all behave as you'd expect. Some of the positive feedback also centers around the user interface, which is universally considered intuitive, clean, and well-designed – not that Windows 11 doesn't have its fans. An additional benefit for Danilkov is the way that Apple devices work so well together.

Windows has its problems – but is the criticism unfair?

Danilkov describes some of the criticism as "outdated", suggesting Windows 11 is "leaps and bounds better" than its predecessors and that "many reactions to Windows are based on a version of the platform used years ago". This is an idea that Jitesh Keswani, managing director at e intelligence, a digital marketing agency, expands on.

"In the past, developers found it difficult to get their development environments up and running," he explains. "This typically involved a plethora of command-line tools. In addition, many of the development environments set up on a developer’s Windows desktops would not work in the same way on the Linux-based production servers that they were deployed to. This is a legacy problem that Windows still has to overcome."

Windows does have its advantages – and that primarily comes in the form of Windows Subsystem for Linux (WSL), which lets developers run full Linux environments directly on Windows 11 platforms without the need for a dual-boot setup or virtual machine (VM). Dwellwell Analytics' data science engineer, Olga Kuzmich, humorously quips: "The best feature for developers on Windows is the one that lets you run Linux."

This system repeatedly came up in our conversations. Many of the compatibility issues simply aren't relevant anymore thanks to this platform. It also means developers can run Windows applications, Linux tools, Docker containers, and more, all on the same machine. The next iteration, WSL3, is also getting a major upgrade, with new features such as the ability to take full advantage of your machine's GPU and NPU without a "performance tax".

The other advantages come in the form of Visual Studio, which Danilkov and Taimur Ijlal, information security leader at Proxy Coupons, UK, both describe as one of the strongest Integrated development environments (IDEs) available. Ijlal also describes Windows Terminal as "top shelf". The advantages of coding on Windows also extend to certain development platforms. As Jiří Fabián, co-CEO & founder of TopMonks, put it: "I would choose Windows only if I were a .NET developer working on Windows desktop applications or a game developer."

Giving Windows a new lease of life for coding and programming

With so much hesitation and opposition to using Windows as a system for coding, barring the ability to run WSL, is there anything that Microsoft can do to tempt the developers that ITPro spoke with?

There isn't a clean fix, says Omari Wright, web development manager at digital marketing agency seoplus+. "A lot of what makes macOS work well for development teams is structural, and changing it would mean Microsoft moving away from the openness that Windows users value," he says, adding that the tech giant could push harder on WSL and "make it feel less like a workaround and more like a first-class development path".

Nothing, however, would pull Kuzmich back. "Linux is just too natural now, and I think a lot of developers feel the same. That's exactly why, in my opinion, Microsoft had to ship WSL in the first place, and this is very telling."

Doubling down on WSL and improving this as a feature is where the majority of developers we spoke with centered their feedback around. Microsoft could make the remaining gaps between Windows and Linux file systems less noticeable, for example, and improve performance when working with larger repositories, containers, and some tools.

Keswani also suggests that Microsoft should push Windows as close as possible to a native Linux environment without sacrificing the user-friendly elements. This focus on user-friendliness is great "for end-users who don't need to know much about what's going on under the hood," Fabián adds, but to win more developers over, "Microsoft would need to base the core of Windows on Unix, which will never happen".

He continues: "With the rise of AI and heavier terminal usage, I need all core Unix utilities bundled with the system, without having to install and maintain them myself — tools for file manipulation, SSH, search, and so on."

McQuaid, meanwhile, centers his criticism on the direction that Microsoft has been taking Windows in the last few years, lamenting: "Stop trying to overrule my preferences on how to use my computer". He tells ITPro: "I use Edge and Bing there now just because they keep overruling or pressing me to change my defaults.

"There are ads (or what feels like ads) and upselling all over the OS. It’s gross and feels bargain-basement compared to Apple. I'd love to see Microsoft make Windows feel like “spammy” and more of a cohesive, overall pleasant developer experience."

There are various reasons why developers prefer other systems over Windows 11, macOS especially, with the main benefit of Microsoft's flagship OS, according to the programmers that we interviewed, being the fact that it lets you run Linux and bypass Windows entirely.

Nobody, Microsoft included, would describe Windows 11 as perfect, hence why there's such an active Insider program with updates shipped frequently and continuously. There are some unrealistic demands on developers' wish list, like making Windows Unix-based, but more realistic seems to be giving WSL more love – making it streamlined, more functional, and more powerful so that developers feel more supported by their devices at work.

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Microsoft has announced that Copilot Cowork is now generally available for users globally, following a beta period via the tech giant’s Frontier program.

First announced in March this year, Copilot Cowork marks a significant milestone for Microsoft 365 Copilot users, integrating Anthropic’s highly popular tool within its flagship product.

According to Microsoft, Initial testing of the platform by a host of major companies, including Accenture, has proved highly successful.

In a blog post detailing the launch, Charles Lamanna, Microsoft’s EVP for Copilot, Agents, and Platform, said Cowork is the “fastest growing feature” in the history of the firm’s Frontier program.

“Cowork has among the highest user satisfaction of any Copilot or agent experience we have shipped,” he wrote.

“We learned from what we saw, engaged with you along the way, and used everything we heard to improve quality and add new features, including model choice, extensibility through plugins, and new cost management controls. Read more below and watch the full demo.”

Here’s what users can expect with Copilot Cowork.

What is Copilot Cowork?

Copilot Cowork is an integrated version of Anthropic’s Claude Cowork, which launched in January this year. The platform provides users with industry-specific AI capabilities to automate tasks across a range of professions.

Users can direct agents to carry out tasks on their behalf - such as file management or sending emails - by giving bots access to their files. The company described the new platform as essentially providing every worker with a “specialist” for their individual role.

Notably, the launch of the Cowork sparked a sell-off in the software market amid fears the AI tool could render dedicated software services obsolete.

Copilot Cowork features and capabilities

Users at Microsoft shops can expect all the typical capabilities offered by Cowork, albeit with a few new features, according to Lamanna.

Notably, users will be able to choose which model they use with the service. Copilot Cowork currently runs on Anthropic models such as Claude Opus 4.8 and Claude Sonnet 4.6.

Customers will also be able to use GPT-5.5 further down the line with the launch of Cowork 1, the company revealed. According to Microsoft, this will deliver “optimal” cost and quality, and is intended for “enterprise-grade use”.

The tech giant noted that tweaking has helped remove model bias.

“It’s designed to handle everyday Copilot tasks at a substantially lower cost, making it a strong option for cost-sensitive workloads,” Lamanna wrote.

New partner plugins have also been added to Copilot Cowork, according to Microsoft, with a host of partners such as Miro and Monday.com already available.

Other partner plugins include:

• Enosix
• Harvey
• LSEG
• Moodys
• Morningstar
• S&P Global Energy
• TeamsMaestro

Several more are coming soon, including plugins for Atlassian, Canva, Box, Databricks, and Adobe.

Microsoft also touted a number of security-focused features for Copilot Cowork, aimed at shoring up governance and compliance. Cowork, prompts, responses, and artifacts, for example, now flow through existing Microsoft 365 controls.

Copilot Cowork pricing

To use Copilot Cowork, users will need to go through the Microsoft 365 Copilot User Subscription License (USL). This means that users are billed on a usage-basis, and charges are based on what particular tasks they use these agents for.

In terms of costs, customers have two payment options: PayGo and P3 (Credit Pre-Purchase Plan). The former is aimed at customers aiming for flexibility in terms of how they use the service, with credits priced at $0.01.

P3, meanwhile, is for those who want to commit to a usage volume “in advance in exchange for a discount”.

The cost of Copilot Cowork comes at a tricky time for businesses globally, particularly since the rise of the ‘tokenmaxxing’ trend which has resulted in some firms racking up sizable AI bills.

Cost control features are available for customers, however, with Microsoft noting that customers can “decide when Cowork turns on, who gets access, and how much can be spent”.

Spending limits will be available at the tenant, group, and user levels, meaning admins can control costs and usage rates.

“Admins create scoped billing policies and define budgets, including user-level caps set inside group policies,” the company noted. “Admins set the thresholds that matter for their organization and groups, and choose who gets notified when spend crosses them.”

In the event that users exceed usage limits, credit requests can be made to complete tasks. These can be requested from inside Cowork.

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Cyber criminals are exploiting AI hype to impersonate the branding of AI platforms such as ChatGPT, Microsoft Copilot, DeepSeek, and Anthropic’s Claude, according to new research.

Microsoft Threat Intelligence said it's observed an uptick in phishing, malvertising, and search engine optimization (SEO)-driven attacks that ultimately lead to credential theft, financial fraud, or malware infection.

Campaigns focus on highly anticipated launches or emerging trends, using tried-and-tested tactics such as urgency-driven messaging, abuse of trusted services, and multi-stage redirection chains that require user interaction to evade detection.

"While traditional lures like invoices, payment notifications, or delivery alerts remain effective and continue to be widely used, AI-themed lures reflect a shift in social engineering that is likely to persist as a long-term tactic used by threat actors, from cyber criminal groups to nation states," the company warned.

ChatGPT users in the crosshairs

In one example, Microsoft said it had observed a ChatGPT-themed phishing attack delivering malicious URLs which led to phishing pages that collected credit card and personal information such as names and addresses.

The emails used the sender display name ChatGPT and the subject line: “To ensure your ChatGPT Plus continues to work – please update your payment method”.

This phishing activity, which consisted of 4,500 emails sent to targets in South Africa, was part of a broader campaign using similar themes and infrastructure that delivered as many as 100,000 emails on a single day to targets in Switzerland, Austria, and South Africa.

Microsoft noted the campaign affected a broad range of industries, including higher education and professional services.

Thousands targeted in a Claude-themed phishing attack

In another example, security experts spotted a phishing campaign impersonating Anthropic-branded services to target users with account-related lures tied to the Claude AI platform.

The campaign sent phishing emails to targets across more than 2,000 organizations, mainly in the US, UK, and India.

"The campaign used enforcement-themed messaging claiming that the recipient’s account was in violation of acceptable use policies and required immediate action," the company noted.

"The emails impersonated Anthropic’s popular AI service Claude using the display names Anthropic Teams and Anthropic PBC, masquerading as legitimate account-related communications. Subject lines followed a consistent structure of 'Claude Appeal Request' combined with date elements."

DeepSeek malvertising is a growing threat

Other examples included malvertising campaigns that use AI-themed terms such as 'Awesome AI Windows Plugin' and 'Flux Pro AI' in social engineering lures, and fake DeepSeek V4 installers on GitHub that delivered Vidar Stealer.

"Within hours of DeepSeek previewing their latest version, V4, attackers created a fake GitHub organization and repository. They copied real branding and benchmark data, added AI and SEO-search-friendly content, and pushed malicious archives that looked like installers," explained John Bruggeman, vCISO at CBTS.

"What the attacker did was not particularly exotic, but it was well timed and convincingly packaged. A user searching for the newest model could very easily end up in the wrong place, especially because the malicious repository showed up in GitHub, Google, Bing, or AI-assisted search results. The search results added legitimacy to the malware."

Remain vigilant

To counter these rising threats, Microsoft advised customers to configure automatic attack disruption in Microsoft Defender XDR, enforce multi-factor authentication (MFA) on all accounts, use the Microsoft Authenticator app for passkeys and MFA, and scope conditional access policies to strengthen privileged accounts with phishing-resistant MFA.

Other tips included:

• Enabling Zero-hour auto purge (ZAP) in Office 365
• Configuring Microsoft Defender for Office 365 Safe Links
• Invest in ‘advanced’ anti-phishing solutions

"The companies that have a handle on AI governance (policies and procedures) well will be the ones that make safe AI use easy, risky AI use visible, and malicious activity hard to ignore. That means publishing a clear list of approved tools, blocking obvious lookalike domains and very recently registered domains can help stop this kind of threat," said Bruggeman.

"Monitoring suspicious downloads and sign-ins, and training employees on the AI-themed lures should also be done right now - don't think that generic phishing examples from five years ago are going to cut it today."

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Microsoft has hailed a significant breakthrough with its Majorana 2 quantum chip, which it claims is vastly more powerful than its predecessor – and AI helped make it possible.

Developed with the help of Microsoft Discovery’s agentic AI, the Majorana 2 topological quantum chip's cubits can maintain their quantum state 1,000 times longer than the first generation.

It has a mean qubit lifetime of 20 seconds, with some instances lasting as long as a minute.

“We need to make improvements each year that will get us closer to delivering a computer that we believe will have massive commercial and societal value,” said Chetan Nayak, Microsoft technical fellow.

“We’ve got to keep marching to that roadmap to accomplish that, but where are we relative to last year? We’re 1,000 times better.”

While the original Majorana superconductor was based on aluminum, Majorana 2 uses lead, which has delivered marked efficiency improvements. By using lead, this helps shield fragile qubits from cosmic disturbances that can make them unstable.

“That was actually a fairly large change, and it led to big, big improvements in device quality,” Nayak said.

AI played a key role in Majorana 2 improvements

Microsoft specifically highlighted the use of Microsoft Discovery, designed to help organizations embrace Frontier R&D, in the project.

This combines specialized AI agents for scientific research and development with a Discovery Engine that drives research and reasoning workflows, along with enterprise-level security, governance, and transparency.

The system was used to manage workflows, automate measurements, optimize fabrication, pinpoint previously unnoticed flaws, and propose new solutions.

Critical parts of the Majorana quantum devices are designed atom by atom, the company noted. To keep each atom in the right spot, another material, an impurity, can be added to the crystalline structure.

Zulfi Alam, corporate vice president for quantum at Microsoft, said the system enabled the team to spot probable targets and fine-tune development processes.

Meanwhile, it also helped handle nearly two decades’ worth of data, in many different formats.

“As you run AI agents on this data, they’re able to essentially resynthesize and make correlations that we as humans cannot see because no single individual has that much vision across that much data,” said Alam.

Supercharged development

Creating a topological state requires setting hundreds of parameters, a process that, when carried out by a human, takes weeks – but Microsoft said the use of agentic AI cut this by orders of magnitude.

Alongside this, AI’s pattern-recognition abilities helped with the difficult task of measuring what state the qubit is in and detecting whether there’s an even or odd number of billions of electrons on a semiconductor wire.

“Using agentic AI to automate the measurements was a game changer,” said Alam. “It goes through some math and starts saying, ‘Hey, where do I find the lowest point where everything sort of works?’ And it can do all these voltage adjustments in parallel, which a human cannot do. The way our minds work, we are more linear.”

Microsoft has now made Microsoft Discovery generally available, along with an app with core capabilities that individuals can download for free and run locally on their computers with a GitHub Copilot account.

“In the year since we launched, we’ve seen customers light up use cases across critical industries like life sciences, chemicals and materials, energy, manufacturing and consumer goods,” said Aseem Datar, corporate vice president, product innovation for Microsoft Discovery.

“With companies like Syensqo developing next-generation fluids for semiconductor manufacturing, the opportunities for impact are vast.”

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TD Synnex has invested in a new Microsoft Alliance Growth team in the UK as part of efforts to help channel partners accelerate the expansion of their cloud solution provider (CSP) practices.

The dedicated team will focus on mid-market and SMB partners that the distributor has identified as having strong growth ambitions and potential, equipping them with additional business development, training, and technical support across Microsoft 365, Azure, and security offerings.

In an announcement, TD Synnex said the move builds on its existing Microsoft CSP program as organizations continue to shift their workloads to the cloud, creating fresh revenue opportunities for partners.

"As small and medium-sized businesses continue their transformation and migrate more of their workloads to the cloud, there is a huge opportunity for UK partners to grow their Microsoft CSP business," said Darren Dixon, business unit director for business applications at TD Synnex's Advanced Solutions, UK and Ireland.

"Our investment in the Alliance Growth team will help partners that have a genuine desire to accelerate their plans and support them in taking their business to the next level by providing tailored sales and technical support in their chosen area of focus."

Partners participating in the program will gain access to a dedicated support team that can include a business development manager, customer success manager, and technical pre-sales consultant.

TD Synnex said the team will work closely with partners to understand their business objectives and capabilities before creating bespoke development plans that feature clear milestones and performance measures.

The initiative also offers specialist training, support resources, and a range of tools designed to help partners drive customer engagement and growth opportunities.

Among these is Channel Insights, a recently launched offering that enables Microsoft CSP partners to analyze customer licensing and usage in greater detail to better identify opportunities for additional services and solutions.

According to TD Synnex, the formation of its new Microsoft Growth Alliance team is part of an incremental series of planned investments across its CSP business as Microsoft's channel strategy and cloud priorities continue to evolve.

"This is a targeted, on top investment into our Microsoft CSP practice designed to accelerate growth and profitability," Dixon added. "It aligns directly with Microsoft's own goals and objectives for cloud solutions and will enable us to scale-up our support for CSP partners in driving increased customer satisfaction and retention."

The Pentagon has handed a $9.7 billion deal to Dell to provide – and sort out – Microsoft licenses.

The five-year deal – known as the Microsoft Department of War Enterprise Software Agreement II Core Enterprise Technology Agreement (CETA) – was awarded to Dell Federal Systems, and will see Dell as the main contractor providing Microsoft 365, cloud subscriptions, and software licensing for Microsoft products, which have long been in use by the defense agency and military.

"By providing enterprise access to Microsoft 365 advanced cloud subscriptions and critical on-premises licensing, this CETA acts as part of the digital connective tissue essential for Combined Joint All-Domain Command and Control, CJADC2," said Defense Department Chief Information Officer Kirsten Davies at a press briefing, according to reports.

She added: "This ensures our war fighters have the tools for just-in-time data sharing, supports our pivot to AI and data analytics, and undergirds uninterrupted operational continuity for our most sensitive and disconnected environments."

The aim is that the deal will give the Pentagon one supplier for Microsoft products, rather than multiple smaller contracts, helping to reduce redundancies in licensing. The agency believes that bringing together smaller IT budgets from across departments into one deal could save as much as $422 million each year.

"This second-generation blanket purchase agreement will streamline and consolidate critical Microsoft software and services across the Department of War, the intelligence community, and the US Coast Guard," said Defense Department Chief Information Officer Kirsten Davies at a press briefing, according to CNBC.

CETA will cover US intelligence agencies, the Coast Guard, and the military, including the Air Force, Army, Navy, Marines, and Space Force.

Previous deals

The CETA deal is the successor to the $1.76bn, five year Micrsoft Enterprise Services contract awarded in 2019, which was designed to give the intelligence community and defense agencies access to Microsoft technology and support as part of a pivot to the cloud.

That same year, the Pentagon awarded Microsoft a massive $10bn cloud deal known as JEDI, but two years later, it was scrapped following challenges by AWS that included accusations that then-President Trump had told the Department of Defense to "screw Amazon".

In 2022, Microsoft and AWS were both tapped by the Pentagon for a new joint cloud project worth $9bn.

Friendly relations

This time around, government representatives stressed the deal followed a competitive procurement process – but reports have been quick to point to Michael Dell's $6.25 billion pledge to fund so-called Trump accounts for children, as well as his wider support for Trump.

In return, Trump earlier this month said people should "go out and buy a Dell" – helping send the company's stocks soaring.

The officials announcing the deal said Dell beat out rivals in the procurement process. "The vendors were all evaluated based on competition, comparison to General Services Administration GSA schedule pricing, and overall chain of value to the department," said acting Navy Chief Information Officer Barry Tanner in a press briefing, according to reports. "Going through the process of evaluation, they came out on top."

Microsoft 365 Copilot is becoming widespread, as the go-to generative AI service at firms already invested in the M365 productivity suite. The AI tool is the first port of call many organizations will have with generative AI and in the right hands, can drive meaningful increases in productivity.

Some standout examples of benefits can be found in the public sector, where pioneering councils are already using Copilot to the benefit of their staff.

ITPro spoke to representatives to three such councils in Wales, who have led the charge on AI adoption in their respective roles: Mari Ropstad, head of service at Rhondda Cynon Taf County Borough Council; Ness Young, director of Corporate Service, City & County of Swansea; and Georgia Sweet, digital transformation project officer, Carmarthenshire County Council.

Concrete benefits

Microsoft figures show that across the councils are already saving time and improving processes using Copilot.

Swansea County Council estimates that it saved 5,400 staff hours in just four weeks, as a direct effect of AI usage.

In Rhondda Cynon Taf County Borough Council, leaders have noted marked improvements in core tasks such as assessments, which Copilot has allowed to be created almost four times faster. After adopting the tool, 75% of staff say they feel more positive about their role, with 86% also reporting the quality of their work has improved.

At Carmarthenshire County Council, Sweet explains her team has developed a Copilot agent that responds to customer enquiries with FAQs drawn from the website. The deployment has helped the council to meet its ten-day target for complaints.

In addition to improving the customer-facing experience for Carmarthenshire County Council, Copilot has also brought benefits for workers inside the organization.

“We've seen a lot of feedback from neurodiverse colleagues, particularly those with ADHD and dyslexia, where they're finding that Copilot is transforming the way that they work,” Sweet says.

“So they're finding it easy to process information, it's really helping with their written communication and the tools like rewrite or summarizing large documents, that's really helping them and improving their experience at work.”

Sweet adds that Copilot can be used without technical experience, with options to take it further depending on the user’s skill level.

Teething difficulties

Despite Copilot’s relative ease of access, users do need a basic understanding of Microsoft and AI systems to make the most of the tool – and for some staff, this was an initial stumbling block.

Young says that adoption of Copilot has revealed that some staff are less digitally literate than expected, necessitating additional time for training.

“We've got about 3,500 people using Copilot in Swansea, and some of the feedback that we've had from those providing training and engagement is that digital literacy can be an obstacle to initial use,” Young tells ITPro.

“Not necessarily just in a technical sense, but also in terms of confidence. And so we have invested heavily, we've got a support partner working with us to train people and we also have an engagement officer who provides one to one support particularly for those who have full licenses.”

Ropstad’s experience has been similar, with her team having found that users need “concrete use cases” for AI tools beyond basic training, including suggested prompts for generating forms or summarizing notes.

“So we use a lot of our own practitioners to teach other practitioners,” Ropstad explains. “And for us, it's always about trying to bring people into this middle band. You know, we are a council we can't afford for quality to be haphazard, it has to be a standard of quality. And so in order to get everybody to a middle band of Copilot use, we have to be able to bring everybody up to that level.”

All three councils benefited from first providing Copilot to a small group of ‘hero’ users, those most enthusiastic about AI and with the greatest technical experience, who helped to identify the most promising avenues for the technology and down the line to share their expertise with colleagues.

At Swansea Council, Young says 100 licenses were initially assigned, with 75 given to workers on pilot projects identified through discussions with Microsoft and other Welsh councils. The remaining 25 were assigned to the council’s senior leadership team, to make it a “leadership opportunity and really drive it from the top of the organization”, Young adds.

Carmarthenshire County Council started with a similarly small group, who later shared their learnings with the wider organization. Internally, employees are now sharing prompts via Teams, as well as ideas for AI use.

“I think people are so keen to share their learnings and if they found an amazing prompt, or if they've got a new process they're using Copilot for, and I think that's quite rare with new technology, to have that kind of buzz and excitement,” Sweet says.

“It’s as though the product sort of sells itself,” Young adds.

At Rhondda Cynon Taf County Borough Council, around 350 staff are now using Microsoft 365 Copilot. Initial concerns at the council centered around the ethical concerns of using AI for assessment, and whether it would affect workers’ registrations as social workers.

“So we kind of approached it very much in a sort of we'll have a volunteer from every team, and they are our champions for that team, knowing that social workers work very much in teams,” Ropstad says, adding that workers are now reassured that their jobs aren’t at risk because of Copilot.

All three councils are collaborating and continue to work with Microsoft on furthering their use of Copilot and getting the most out of the tool.

The UK Competition and Markets Authority (CMA) has launched a strategic market status (SMS) investigation into Microsoft’s software licensing practices.

The probe, which the regulator touted in late March, aims to establish whether the tech giant’s position in the market has a negative impact on competition and consumer flexibility.

In a statement announcing the move, the CMA said the probe will primarily focus on business software products used by organisations across the country, including:

• Productivity software
• Personal computer and server operating systems
• Database management systems
• Security software

Microsoft business products, which include Windows, Word, Excel, Teams, and Copilot, are used by hundreds of thousands of firms and public sector organizations across the country, the CMA noted, with more than 15 million commercial users.

The regulator highlighted concerns that UK customers “may not always be able to effectively combine software from Microsoft with that of other providers”. This, it said, could limit their ability to access preferred products at competitive prices.

“The CMA’s investigation will examine whether Microsoft has SMS in business software and consider whether it can use that position to limit customer choice,” the CMA said.

“It will assess whether bundling of products, limits in interoperability or default settings can prevent customers switching and weaken the competitive constraints Microsoft faces from rivals.”

Notably, the CMA said its decision to launch the probe comes in the wake of a previous investigation into the UK cloud services market.

The regulator’s lengthy probe found the dominance of hyperscalers including Microsoft and Amazon Web Services (AWS) had a negative impact on competition in the UK market.

Microsoft has repeatedly faced scrutiny over its software licensing practices. Slack, for example, filed an EU complaint in 2020 amid claims the company had engaged in anticompetitive behavior with Teams bundling practices.

EU-based trade group, Cloud Infrastructure Services Providers in Europe (CISPE), filed a similar complaint in 2022, alleging that Microsoft imposed higher charges for customers running software on rival cloud platforms.

Microsoft and CISPE agreed to a settlement in mid-2025, which was met with criticism by other industry groups.

CMA seeks business feedback

This latest probe into Microsoft practices must be completed within nine months, according to the regulator. A decision on whether to designate the tech giant with strategic market status is expected by February 2027.

In the meantime, the CMA said plans to gauge the thoughts of businesses across the country using Microsoft products, as well as challenger companies, over whether product choices may be limited.

This includes concerns surrounding product bundling, lack of interoperability, and default settings used by the company.

“Our aim is to understand how these markets are developing, Microsoft’s position within them and to consider what, if any, targeted action may be needed to ensure UK organizations can benefit from choice, innovation and competitive prices,” said Sarah Cardell, chief executive of the CMA.

A spokesperson for Microsoft told ITPro: "We are committed to working quickly and constructively with the CMA to facilitate its review of the business software market."

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AI providers keep telling us to hand off work to agents, but research from Microsoft suggests that might not be a wise move.

In a pre-print paper, a trio of Microsoft researchers found that large language models (LLMs) corrupt documents over the course of long, extensive workflows, resulting in data deletion and even hallucinations.

Top tier foundational models – including Gemini 3.1 Pro, Claude Opus 4.6, GPT 5.4 – corrupted an average of 25% of content in a document during the research, with other models more than half.

“Delegation requires trust – the expectation that the LLM will faithfully execute the task without introducing errors into documents," said researchers Philippe Laban, Tobias Schnabel, and Jennifer Neville.

"Our analysis shows that current LLMs are unreliable delegates: they introduce sparse but severe errors that silently corrupt documents, compounding over long interaction."

The work comes amid growing challenges with extensive AI use, with one study showing workers were wasting half a day each week fixing AI-made "workslop."

Even in coding, AI is fast but creates flaws in software, according to a study by CodeRabbit. The fact that half of software developers aren't checking AI-generated code is also compounding the issue, separate research shows.

Testing AI delegation

To test how well LLMs manage documents, the trio of researchers built a tool called DELEGATE-25 to simulate long workflows featuring in-depth document editing across 52 professional domains, including coding. They used that tool across 19 LLMs, including the aforementioned frontier models.

DELEGATE-25 tracked the changes made in text to documents as they were manipulated by the LLMs over five to ten complex editing tasks in each domain.

The team found that a quarter of document content was lost across frontier models, with that rising to half across the average of all models tested.

Degradation levels depended on the domain, with LLMs doing better in programming than natural language or niche settings, such as earning statements or music notation.

A model was deemed "ready" to be delegated tasks in a specific domain if it could score 98% accuracy after 20 interactions. Only one domain saw that score across most models: Python. Gemini 3.1 Pro had the best performance, scoring at least 98% in 11 of 52 domains.

Turning to agents doesn't help, either, with additional experiments showing agents don't improve performance. The degradation was the worst for larger documents over longer interaction periods.

Researchers said their work showed "that models are not ready for delegated workflows in the vast majority of domains, with models severely corrupting documents (at least -20% degradation) in 80% of our simulated conditions."

The results weren't down to consistently adding small errors with every step, the researchers noted. Instead, some of the time models worked perfectly, while other times they lost massive amounts of data in one go.

"Stronger models do not avoid small errors better; they delay critical failures and experience them in fewer Interactions," they said.

Unchecked errors

Because all of the models tested saw degradation in longer workflows – except when working in Python – researchers argued that longer interactions are necessary to benchmark LLM performance.

They did note improvement in systems by testing GPT-4o and GPT-5.4, with a leap in performance from 14.7% to 71.5%.

However, the study added that improvements to LLMs had led to workers supervising AI systems while they complete tasks, such as vibe coding.

"Crucially, users delegating work might lack the expertise or time to review changes implemented by the LLM, and must trust that the LLM does not introduce unchecked errors, such as hallucinations, or deletions," they noted.

For those working with AI, they advised caution, saying we shouldn't assume an AI that works well in one domain can manage the same in another.

"Current LLMs are ready for delegated workflows in some domains such as Python coding, but not in other less common domains," the paper noted.

"In general, users still need to closely monitor LLM systems as they operate and complete tasks on their behalf."

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Microsoft, Google, and xAI have agreed to hand over their AI tools to the US Center for AI Standards and Innovation (CAISI) and the UK's AI Security Institute (AISI) for pre-deployment testing.

They will evaluate the firms' frontier models, assess safeguards, and help mitigate national security and large-scale public safety risks, Microsoft said.

"Well-constructed tests help us understand whether our systems are working as intended and delivering the benefits they are designed to provide. Testing also helps us stay ahead of risks, such as AI-driven cyber attacks and other criminal misuses of AI systems, that can emerge once advanced AI systems are deployed in the world," said Natasha Crampton, Microsoft’s chief responsible AI officer.

"While Microsoft regularly undertakes many types of AI testing on its own, testing for national security and large-scale public safety risks necessarily must be a collaborative endeavor with governments. This type of testing depends on deep technical, scientific, and national security expertise that is uniquely held by institutions like CAISI in the US and AISI in the UK and the government agencies they work with."

In the US, Microsoft and the National Institute of Standards and Technology (NIST) will collaborate with CAISI on improving methodologies for adversarial assessments.

It will mean testing AI systems by examining unexpected behaviors, misuse pathways, and failure modes. This includes developing more systematic and reproducible approaches to evaluation, including shared frameworks, datasets, and workflows for assessing safety, security, and robustness risks in advanced AI systems.

“Independent, rigorous measurement science is essential to understanding frontier AI and its national security implications,” said CAISI director Chris Fall. “These expanded industry collaborations help us scale our work in the public interest at a critical moment.”

Microsoft strikes agreement with UK researchers

In the UK, Microsoft will collaborate with AISI on research related to frontier safety and security, including ways of evaluating high-risk capabilities and the effectiveness of the safeguards used to address them

"The partnership will also include research into societal resilience, examining how conversational AI systems interact with users insensitive contexts," said AISI.

"As AI systems become increasingly capable, sustained two-way collaboration between government and companies developing and deploying frontier AI is essential to advance our joint understanding of large-scale risks to public safety and national security."

Microsoft said future plans include collaborating with other AI institutes around the world, sharing priorities and methodologies for testing through the International Network for AI Measurement, Evaluation and Science.

The company is also working with Frontier Model Forum (FMF), an initiative dedicated to advancing the science and practice of frontier AI safety and security, to support independent research and promote transparency around risk mitigation strategies.

It is also contributing to MLCommons, a multistakeholder non-profit that develops and operationalizes testing tools such as AILuminate, a family of safety and security benchmarks.

"As AI capabilities advance, so too must the rigor of the testing and safeguards that underpin them. We will apply what we learn from these partnerships directly into how we design, test, and deploy AI systems, ensuring that progress in evaluation science translates into safer, more secure products for our customers," said Crampton.

"As these partnerships progress, we will share what we learn and look for opportunities to apply insights and best practices to AI testing more broadly."

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Microsoft has issued an alert over a large-scale credential theft campaign that uses lures centered around corporate codes of conduct.

The emails were related to internal compliance or regulatory issues, with display names such as 'Internal Regulatory COC', 'Workforce Communications', and 'Team Conduct Report'.

Subject lines included 'Internal case log issued under conduct policy' and 'Reminder: employer opened a non-compliance case log'.

The emails were sent using a legitimate email delivery service, likely originating from a cloud-hosted Windows virtual machine (VM).

The accusations and repeated time-bound action prompts created a sense of urgency, Microsoft researchers said. Similarly, the emails were based on polished, enterprise-style HTML templates with structured layouts and authenticity statements, making them appear more credible than most phishing emails.

The bodies of the messages claimed that a code of conduct review had been initiated, referenced organization-specific names embedded within the text, and instructed recipients to open a PDF attachment to see the materials of the case.

When clicked, users were first directed to one of two attacker-controlled domains - acceptable-use-policy-calendly[.]de or compliance-protectionoutlook[.]de.

The landing pages displayed a Cloudflare CAPTCHA, presented as checking that the user was coming 'from a valid session', and that likely served as a gating mechanism to impede automated analysis and sandbox detonation.

According to Microsoft, the attack chain ultimately led to a legitimate sign-in experience that formed part of an adversary in the middle (AiTM) phishing flow.

Unlike traditional credential harvesting, AiTM attacks intercept authentication traffic in real time, bypassing multifactor authentication (MFA).

As a result, the attackers were able to proxy the authentication session and capture authentication tokens that could provide immediate account access.

"Phishing campaigns continue to improve sophistication and refinement in blending social engineering, delivery and hosting infrastructure, and authentication abuse to remain effective against evolving security controls," the researchers warned.

What industries are affected?

Between 14 and 16 April this year, the Microsoft Defender Research team said it spotted a series of campaigns targeting more than 35,000 users across over 13,000 organizations in 26 countries. Most targets - 92% - were located in the US.

The campaign didn't focus on a single vertical but instead impacted a broad range of industries, most notably healthcare and life sciences (19%), financial services (18%), professional services (11%), and technology and software (11%).

Microsoft said organizations should review the recommended settings for Exchange Online Protection and Microsoft Defender for Office 365 to check for essential defenses and the ability to monitor and respond to threat activity. They should also invest in user awareness training and phishing simulations.

Enabling Zero-hour auto purge (ZAP) in Defender for Office 365 is advised to quarantine sent mail in response to newly acquired threat intelligence. Users are also urged to retroactively neutralize malicious phishing, spam, or malware messages that have already been delivered to mailboxes.

It's also worth manually checking for, and purging, unwanted emails containing URLs and/or Subject fields that are similar, but not identical, to those of known bad messages.

Organizations should enable password-less authentication methods or use authenticator apps, researchers said, and strengthen privileged accounts with phishing resistant MFA.

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The conversation around enterprise AI is shifting. For much of the past two years, organizations have focused on pilots – testing generative AI tools, exploring use cases, and proving value. Now, the focus is turning to production.

As businesses begin to operationalise platforms such as Microsoft Azure AI, Azure OpenAI Service, and Copilot, a new set of challenges is emerging that goes far beyond experimentation.

“Our customers are no longer asking what AI can do,” Microsoft noted in a recent partner blog. “They are asking how to deploy it securely, govern it consistently, and generate measurable business outcomes.”

That shift is exposing structural gaps across the Microsoft partner ecosystem.

From pilots to production

For partners on the ground, the transition from proof of concept to production is proving far from straightforward.

“AI pilots work if you can demonstrate value to the users, the departments, the business, and ultimately the P&L,” said Rupert Davey, managing director at CTM IT. “Problems come in moving to production when security and governance controls are introduced, and these are seen as classic cybersecurity blockers.”.

This reflects a broader pattern seen by engineering-led partners. Prayaag Kasundra, CEO at Simform, said pilots often succeed in isolation but stall when exposed to real-world enterprise conditions. “It’s rarely the model that fails. It’s everything around it,”he said, pointing to data readiness, governance and scaling challenges as key barriers.

This experience is widely reflected in the market. Research from Omdia shows enterprises are running dozens of AI pilots simultaneously, but conversion to production remains inconsistent, with many organizations seeing only a small proportion progress beyond experimentation.

IDC research suggests up to 90% of AI pilots fail to reach production, highlighting a significant gap between experimentation and operational deployment..

While early pilots often operate in relatively unconstrained environments, production deployments must integrate with enterprise identity, compliance, and security frameworks, which introduces a new layer of operational complexity.

At software marketplace Pax8, Kristen Fehrenbach, vice president of global Microsoft alliance, said readiness varies across the MSP landscape.

“MSPs in the Pax8 ecosystem are moving quickly from experimentation to execution, but readiness varies – those making the most progress are the ones building repeatable, managed approaches rather than treating AI as a one-off project,” she said

Governance, cost, and control

As AI systems move into production, requirements around governance, lifecycle management, and cost control are becoming unavoidable.

“The biggest operational friction shows up in turning working demos into governed, secure, supportable services. Cost predictability is also a pressure point as AI usage grows,” said Fehrenbach.

Unlike traditional software deployments, AI workloads are typically consumption-based, introducing new financial dynamics and new challenges around cost management.

“The ramp up of adoption means closely monitored PAYG options are key, and once adoption plateaus, then review and look for prepaid options,” said Davey.

From an engineering perspective, governance challenges extend beyond policy into day-to-day operations. Simform CTO Hiren Dhaduk noted that once AI systems move into live workflows, they require structured evaluation, security controls and continuous monitoring, with clear ownership and operational processes becoming critical to sustaining AI in production.

A shift in the partner model

These requirements are forcing a rethink of the traditional Microsoft partner model. Historically, many partners have focused on licensing, migrations and implementation projects. But AI is pushing the channel toward ongoing operations.

“Users at businesses are quick to find their own gen AI tooling in the wild,” said Davey.

“So if Microsoft partners don’t get in front of this with managed services… businesses will organically move to an uncontrolled set of heterogeneous generative AI tooling, risking the farm on democratised technology selection.”

Fehrenbach believes AI is already shifting where value is created. “Partners who can run AI as an ongoing managed operation will be better positioned than those limited to resale or one-time projects,” she said.

Kasundra added this all represents a structural shift rather than a cyclical one.

“Enterprise AI does not have an endpoint – it has a continuous improvement cycle…that is inherently an operational and engineering relationship, not a project one,” he said.

New skills, new responsibilities

Supporting production AI environments requires new capabilities, many of which sit at the intersection of cloud and AI operations. These include governance by design, lifecycle management, and the ability to deploy and manage agentic workflows.

For smaller partners, the shift is particularly significant.

“For smaller, more agile Microsoft partners, like us, grassroots adoption and AI enablement services are going to be key to getting from pilot to production. This includes training and coaching with feedback loops from monitoring usage. This will be new to a lot of partners who’ve evolved from a break/fix mentality,” explained Davey.

Microsoft is also pushing partner skilling as a priority. “In an AI-first world, skilling is the new currency,” said the company.

Winners, losers, and agents

As the ecosystem evolves, a divide may be emerging between partners that can support AI in production and those that cannot.

“Partners who can run AI as an ongoing managed operation will be better positioned,” said Fehrenbach.

But Davey suggests the implications could go further. “If AI, specifically agents, replace bums-on-seats… who, or what, does the Microsoft partner support? The Microsoft partner ecosystem needs to embrace the idea that we support identities, not people. In the future, agent support will be as important as user support,” he said.

The road ahead

Looking ahead, AI is expected to reshape the Microsoft channel around ongoing operations, governance, and outcomes rather than one-off deployments.

“AI will push the Microsoft partner ecosystem toward partners delivering intelligence-driven outcomes, where governance, adoption, and lifecycle management become as central as licensing and security are today,” said Fehrenbach.

For partners, this means the era of AI experimentation is ending, and what comes next is operational. Ultimately, for a channel built on projects and resale, this represents both a challenge and a significant opportunity.

Microsoft CEO Satya Nadella appears to have extended an olive branch to Windows users after several months of backlash over the direction of the operating system.

During the company’s Q3 earnings call, Nadella highlighted ongoing efforts to improve experiences for Windows, Xbox, Bing, and Edge users.

“When it comes to our consumer business, we are doing the foundational work required to win back fans and strengthen engagement across Windows, Xbox, Bing, and Edge,” he told listeners.

“In the near term, we are focused on fundamentals, prioritizing quality and serving our core users better”.

Nadella pointed to improvements the tech giant has already made on this front, including performance boosts for lower-memory devices, as well as a more “streamlined” Windows Update process.

He added that it has “brought back focus to core features and fundamentals that matter most to our customers”.

Nadella’s comments come in the wake of long-running concerns about the future of the Windows operating system, particularly on the topic of AI integration.

In November last year, Windows chief Pavan Davuluri sparked controversy after outlining plans to transform Windows into an “agentic OS”.

Davuluri’s X post suggested the company aimed to offer a “multi-modal” experience for users, with an array of AI features baked into the operating system.

The post sparked a fierce backlash among users, with some questioning why the tech giant was focusing so heavily on integrating AI features while other areas like performance and reliability were being overlooked.

The furore appears to have resonated with the company, and in March this year Davuluri detailed plans to dial back "unnecessary" Copilot features within the operating system.

In a blog post at the time, Davuluri said the company will only integrate AI where it’s “most meaningful”.

“You will see us be more intentional about how and where Copilot integrates across Windows, focusing on experiences that are genuinely useful and well‑crafted,” he wrote.

That same move by the company also marked efforts to improve feedback from users - the “largest update to Feedback Hub yet” - which aimed to make it easier to submit feedback.

A looming Windows overhaul?

Efforts to build on Davuluri’s March pledges appear to be accelerating, according to recent reports from Windows Central.

Citing sources close to the matter, the publication noted an internal project dubbed ‘Windows K2’ is already underway and working on sweeping upgrades to performance, reliability, and user experience.

These efforts won’t come in the form of a dedicated update, but instead will be intermittent improvements on a rolling basis.

Performance, in particular, is a key focus of the initiative. Company documents viewed by the publication suggest the tech giant is aware that performance has been a recurring pain point for users, specifically in applications such as File Explorer.

Elsewhere, UI improvements aim to deliver a smoother experience for Windows 11 users, according to Windows Central.

The report tracks with the key focus areas identified by Davuluri in his March blog post, which included goals to deliver a “faster and more dependable File Explorer” as well as taskbar customization and "more control over widgets and feed experiences".

Nadella touts strong Windows uptake

Elsewhere in the earnings call, Nadella hailed strong user growth on Windows 11 – an area in which the company has faced an uphill battle.

Figures touted by the Microsoft chief now put monthly active users at over 1.6 billion.

Windows 11 uptake has been sluggish since its launch in 2021, largely due to the huge popularity of its predecessor. Indeed, Windows 11 only overtook Windows 10 in popularity last year, nearly four years after its official release.

As ITPro reported at the time, figures from Statcounter showed the newer OS finally edged into the lead in mid-July.

Nadella’s comments came as Microsoft announced strong quarterly earnings. Chief financial officer (CFO) Amy Hood said the company “delivered results that exceeded expectations across revenue, operating income, and earnings per share”.

Annual revenue run rate for Microsoft’s AI business surpassed $37 billion in the company’s third quarter, growing 123% year-over-year.

Business is also booming for Microsoft Cloud, Nadella noted, which exceeded $54 billion in revenue, marking a 29% increase year-over-year.

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Microsoft has published a review of how it's fulfilled the digital commitments it made to Europe last year – and the tech giant says there are further pledges on the horizon.

A year ago, the company said it would help build a broad AI and cloud ecosystem across Europe with a series of commitments, including:

• Upholding Europe’s digital resilience even when there is geopolitical volatility
• Protecting the privacy of European data
• Bolstering European cybersecurity capabilities
• Strengthening the region’s economic competitiveness, including in open source

"Together, they reflect a simple principle: Europe should be able to use global technology at scale, under European rules, with confidence that it will remain available, secure, and under customer control," said Samer Abu-Ltaif, president of Microsoft EMEA and Jeff Bullwinkel, VP and deputy general counsel, corporate external and legal Affairs, Microsoft EMEA.

Infrastructure expansion continues

In terms of infrastructure expansion, the company claims it’s made significant strides, particularly with the announcement of new multi-billion Euro investments in Portugal, Norway, and the UK.

This, the firm noted, is helping European organizations access cloud and AI capabilities closer to home - adding that it's committed to respecting the role that laws across Europe play in regulating its products and services.

Meanwhile, it's been supporting its customers’ operational continuity in extreme scenarios through a European resiliency partnership with Delos Cloud and a strategic partnership with Capgemini.

These aim to provide managed sovereign cloud services for European enterprises, while a similar deal with Accenture is also providing support for the design and implementation of sovereign cloud and AI solutions.

Microsoft hails data privacy boosts

On the thorny issue of European data privacy, Microsoft cited a series of initiatives aimed at shoring up protections for European consumers and businesses.

These include the launch of the Defending Your Data Initiative, as well as adherence to the EU Data Boundary which covers the storage and processing of European customer data.

Meanwhile, the Data Guardian initiative now ensures that remote access by Microsoft engineers to European customer data is approved and monitored by personnel residing in Europe.

"Over the past year, we have strengthened our sovereign solutions through new contractual assurances, closer partnerships with European providers, and expanded customer support,” the company noted in its blog post.

Cybersecurity focus

When it comes to cybersecurity, Microsoft pointed to its free European Security Program (ESP), available for governments across the UK, EU, EFTA, and EU accession countries.

"We have provided cybersecurity support to NATO, Ukraine, and other European governments, including threat intelligence, election protection, and disrupting attacks targeting European governments, companies, and citizens," said Abu-Ltaif and Bullwinkel.

"Since the start of Russia’s full-scale invasion of Ukraine in 2022, when we helped move critical data and services to secure data centers across Europe and defend against sustained cyber attacks and eventual kinetic attacks."

Open source the “North Star” in Europe

Support for the open source ecosystem has been a key focus over the last year, according to the firm.

Almost 25 million European software developers are now active on GitHub, for example, while Microsoft Foundry expansions have opened access to roughly 11,000 AI models.

"These commitments are our North Star for how we engage in Europe, grounded in European law and values, shaped by European priorities, and designed to progress over time," said Abu-Ltaif and Bullwinkel.

"As Europe’s digital and geopolitical context continues to evolve, we will keep engaging with policymakers, regulators, customers, and partners to test whether what we are delivering matches what Europe needs. Where it does not, we will adapt."

Taking Microsoft at face value

While Microsoft is keen to emphasize the work it’s doing across Europe, the company’s activities in areas such as cloud computing and software have been subject to criticism.

The tech giant has been embroiled in a series of high-profile legal battles over its software licensing schemes in Europe, with software bundling proving controversial.

Alongside competitors, the tech giant has rolled out a series of new sovereignty-focused services for European organizations, but questions have been raised over whether or not these are truly ‘sovereign’.

During a court hearing last year, Microsoft said it “cannot guarantee” data sovereignty for French customers in the event that the US administration demands access under the Cloud Act.

Under the legislation, the US administration has the legal authority to demand American providers provide data regardless of whether it is stored in-country or abroad.

The Cloud Act has become a recurring flashpoint in the digital sovereignty debate, while similar frameworks in the European Union have also been criticised for continuing reliance on US hyperscalers.

Earlier this month, the European Commission awarded a series of digital sovereignty contracts to European organizations, but this scheme also included involvement from Google Cloud.

CISPE recently launched a new framework for European enterprises to validate whether the services they’re paying for meet ‘sovereign’ requirements.

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Hyperscaler cloud revenues are still surging, according to recent earnings reports, but questions still remain about how much longer they can continue investing massive sums in AI infrastructure.

Alphabet, AWS, Meta, and Microsoft have all posted positive results this quarter with overall revenue in the hundreds of billions of dollars, helped in part by booming demand for data center capacity amid the AI roll-out.

However, analysts have questioned whether spending on AI is sustainable and will deliver a return on investment (ROI).

The current estimate is for tech's leading companies to invest $600 billion in infrastructure to power AI this year alone, with some tech giants already upping their predicted spends as part of their quarterly results.

"The public cloud platform earnings numbers are big as usual — but the capital investment to achieve them are getting big faster," said Forrester’s principal analyst Lee Sustar. "That's why questions will persist about the sustainability of hyperscaler AI data center buildouts."

"Together, the public cloud revenue numbers and the capital expense figures will raise questions about the sustainability of the AI boom," he added. "But with the potential payoff of AI leadership seemingly so high, the companies continue to make those bets, forcing investors and customers alike to assess how their interests are impacted."

According to LSEG data shared by Reuters, Amazon stock is up 13%, Alphabet's is up just shy of 12%, and Meta is up 3% – but Microsoft has slid 12%.

Alphabet's cloud success

Google-owner Alphabet saw overall revenue leap 22% to $109.9 billion for its first quarter, topping estimates, with income climbing to $39.7 billion.

Google Cloud climbed 63% to $20 billion, marking the best growth rate for the cloud company in more than six years, though still below Alphabet's other revenue sources, including Services at $89.6 billion and Search at $60.3 billion.

Google Cloud income climbed from $2.2 billion in the first quarter in 2025 to $6.6 billion this year, underlining significant growth over the last 12 months. Sustar said the figures show the cloud division "can significantly contribute to the wider Alphabet portfolio after years of big operating losses".

In an investor call, Sundar Pichai said that capacity constraints prevented even higher growth, with Google Cloud's backlog doubling to $460 billion.

"Our enterprise AI solutions have become our primary growth driver for cloud for the first time," he said.

In a statement, Pichai added: "Our first-party models, like Gemini, are now processing more than 16 billion tokens per minute via direct API use by our customers, up 60% from last quarter. It’s really exciting to see how our AI investments are delivering value for our users, customers and business."

CFO Anat Ashkenazi said Google would increase its capital expenditure forecast by $5 billion to somewhere between $180 billion and 190 billion. Last year, the tech giant’s capital expenditure reached $91.45 billion, with much of this focused on AI-related spending.

That huge cloud backlog and leap in revenue suggests that Google's capex spending isn't wildly out of place, Thomas Monteiro, a senior analyst at Investing.com, told Reuters.

"Perhaps even more importantly than Alphabet's massive cloud growth pace is the broader justification that the $180 billion capex plan — that surprised the market last quarter — is well within the company’s spending power, considering the durability and quality of the revenue curve shown today," he said.

But concerns remain, according to Sustar, who pointed to the quarterly figures. He noted that "the capital expenditure of $35.7 billion — which Alphabet attributes largely to AI — is much bigger" than the $20 billion in quarterly revenue from the cloud unit.

AWS leaps ahead, but not quite as much

Amazon's overall revenue climbed 17% to $181.5 billion in the first quarter, while revenue at Amazon Web Services (AWS) climbed 28% to $37.6 billion in the first quarter. AWS operating income climbed to $14.2 billion from $11.5 billion in the same quarter last year.

While AWS’ revenue growth rate wasn't as high as Google Cloud's, it's still significant coming from the market leader. Andy Jassy, CEO of Amazon, said in a statement that it was AWS' "fastest growth in 15 quarters."

Jesse Cohen, senior analyst at Investing.com, said that the "reacceleration" in AWS sales was a positive sign, adding that the hyperscaler’s customer base is "fully embracing new workloads, especially in AI."

Amazon has projected $200 billion in capex this year, with $44.2 billion spent in this quarter.

"AWS bagged $37.59 billion in revenue in the first quarter but data center buildouts accounted for a big part of the $44.2 billion capital investment in the same period, even though AWS had an operating income of $14.2 billion," said Sustar.

"That puts pressure on AWS to keep up its historic role of keeping Amazon as a whole in the black from quarter to quarter.

Social media props up Meta

Facebook owner Meta posted revenue of $56.3 billion, up 33% from $42.3 billion the same quarter last year, with income of $22.8 billion, up about 30%.

Meta raised its expected capital expenditure forecast from between $115 billion-$135 billion to $125 billion-$145 billion, which sent stocks sliding 6%.

In a statement, Meta said: "This reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity."

In a conference call, Meta's chief financial officer Susan Li said that such spending was necessary to catch up, as Meta has previously "underestimated our compute needs".

CEO Mark Zuckerberg said it was unclear how the increased spending would pay off.

"I don't think we have a very precise plan for exactly how each product is going to scale or anything like that," he said, per reports from the BBC.

"But I think we have a sense of the shape of where these things should be... and I'm quite comfortable that the lab we're building is on track to be a leading lab in the world."

In the meantime, social media continues to pay Meta's bills.

“The irony is that Meta’s future‑facing AI ambitions are being underwritten almost entirely by the company’s legacy business: advertising inside social media apps," said Forrester’s VP research director Mike Proulx. "There’s no material AI revenue yet. Reality Labs remains a loss. Muse Spark has momentum, but not monetization."

“The question is whether Meta’s core can continue to act as a cash cow while the company reduces headcount and diverts focus toward AI," he added.

"If Meta’s ad engine slows, the market’s margin for patience shrinks fast. Meta’s slight dip in daily active users is already beginning to raise eyebrows. Q2 will tell us if it’s really just a blip or the start of a trend."

Microsoft says margins are strong

Microsoft said its quarterly revenue was up 18% to $82.9 billion, with operating income up 20% to $31.8 billion, though AI spending helped cash flow slip by $6 billion to $15.8 billion.

"We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era," said Satya Nadella, Microsoft CEO.

"Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year."

Microsoft Cloud revenue climbed 29% to $54.5 billion, with Azure and other cloud services up 40%.

"For its part, Microsoft claims an upswing of 40% growth in Azure and $54.5 billion in revenue for the wider Microsoft Cloud category," said Forrester's Sustar.

"The company does not break out Azure operating revenue, but with its AI-focused capital investments of $31.9 billion, the cloud revenue is clearly expensive to obtain."

Microsoft's spending on AI has raised concerns, but the company pushed back saying income remains strong. "The margins have been and remain better in our AI business than when we were in our cloud transition," said CFO Amy Hood.

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Partner accreditation didn’t used to mean that much. Badges signaled little more than alignment with a particular vendor. But the landscape has changed.

Today, accreditation from Microsoft isn’t just about positioning, but rather a meaningful indicator of capability. It shows not just that you work with a brand, but you are invested in and trusted by it. So, when you earn Microsoft Modern Work, Azure Infrastructure, and Security designations, it’s something worth talking about. It requires operational, technical, and commercial buy-in, and few people really understand what goes into the process.

The shift from accreditation to differentiation

Microsoft’s partner model has evolved enormously in recent years. It began as something that was at least theoretically accessible to all Managed Service Providers (MSPs), but has become closer to an elitist framework.

Certification is performance-driven. It prioritizes measurable outcomes over theoretical expertise. And this is entirely in keeping with wider changes within the wider tech environment. Customers are no longer interested in credentials; demonstrable results matter more.

So, while Microsoft solution partner accreditation used to be awarded based on headcount - the number of team members who had passed Microsoft exams - a lot more is now required. Instead, businesses must exhibit a blend of technical skilling, customer adoption metrics, and verified project success. And that makes accreditation significantly harder. But, on the plus side, it also lets customers know that the accreditation is worth having. Which for MSPs, makes it into a competitive differentiation.

Holding one designation may indicate competence in a specific domain. Holding all three suggests an ability to deliver more. Integrated, end-to-end solutions that span productivity, infrastructure, and security.

So when an MSP can claim triple Microsoft designation, they stop being a simple service provider and can claim the role of strategic partner. A company able to support its clients through complete digital transformation, and every associated challenge.

The real cost of capability

Achieving triple designation demands substantial internal investment across people, processes, and platforms.

The first step is a commitment to continuous skilling. All members of the team - engineers, architects, and consultants - must maintain up-to-date certifications across multiple Microsoft technologies. And this must be further supported through the development of robust operational frameworks that live up to Microsoft’s expectations around compliance, governance, and security.

The security designation can be particularly challenging. Businesses must be able to demonstrate capabilities in a whole range of areas, from identity management and endpoint protection to threat detection and response. This can mean a lot of investment for many MSPs, ensuring that they not only have the security operations capabilities, but also the tools and teams to manage them.

Commercial alignment also has to be considered. Microsoft’s model is intended to reward partners who drive customer consumption of its cloud services. That’s the whole point of the system. So for businesses seeking accreditation, that can mean a complete change of go-to-market strategies, including pricing and customer engagement.

Ultimately, all of this is a significant commitment for any company.

Metrics that matter

The focus on performance metrics has come to define Microsoft’s partner program in recent years. MSPs must meet specific thresholds across skilling, customer success, and performance to attain and maintain partnership status.

While skilling metrics are relatively straightforward, focusing on the number and level of certified professionals within the organization, customer success metrics are more nuanced. They require partners to demonstrate real-world impact through customer deployments and usage.

Performance metrics tie these elements together by measuring overall business growth within Microsoft’s ecosystem. What makes this more difficult to achieve is that Microsoft regularly updates its criteria to reflect market trends and strategic priorities. This means that achieving designation requires ongoing optimization and improvement.

Beyond the badget

For MSPs willing to invest, the benefits of triple designation are manifold. Internally, the process drives greater discipline, consistency, and alignment, helping businesses to initiate and maintain best practices. While externally, it enhances trust. Customers increasingly look for partners who can demonstrate proven expertise across multiple domains. Triple designation provides a clear signal that an MSP has met rigorous standards and delivered measurable outcomes.

Perhaps most importantly, it positions MSPs to compete in a market that is becoming more demanding. Customers want and expect more. In meeting the exacting standards of Microsoft, businesses are positioning themselves to be able to deliver it.

The rise of triple Microsoft designation as a benchmark reflects a broader development of the managed services industry. Customers expect more, technologies are more complex, and the stakes are higher. In this environment, superficial credentials are no longer enough.

By tying accreditation to real-world performance, Microsoft has effectively raised standards for all MSPs. It’s down to the individual companies whether they wish to accept that challenge and maximize the potential of the business, or to take the easy path and consistently underachieve.

Microsoft has revealed Accenture will equip its entire workforce with Copilot in a deal that marks its biggest to date.

The professional services company ranks among one of the early adopters of Microsoft’s flagship AI service, having slowly rolled out its use across the consultancy over the last three years.

The roll-out initially saw just a few hundred select employees and senior leaders given access to Copilot, the company noted in a blog post.

That was then scaled up to around 20,000 users, with Accenture focusing on data strategy, governance, and access controls, as well as understanding how staff actually made use of the tools.

“We were fine-tuning our adoption strategy and developing a blueprint for how it would be used in daily work,” said Tony Leraris, Accenture’s chief information officer (CIO).

“You can’t take a one-size-fits-all message into adoption. We really had to demonstrate to certain people, especially leaders, how to use the tool and what the value would be specifically for them,” he added.

As the company scaled up to 200,000 by the end of last year, it focused on change management, including making use of Viva Engage, a social networking app built into Microsoft 365.

Now, Accenture aims to cover the vast majority of its workforce, some 743,000 people across 120 countries – equivalent to the population of Denver, Colorado.

Accenture touts Copilot gains

In a company survey last year, 97% of Accenture employees said they completed routine tasks 15 times faster thanks to the AI tool, with 53% reporting significant productivity and efficiency improvements.

Accenture said one set of 200,000 licenses had monthly usage of 89%, with a survey showing 84% of staff would "deeply miss" the tool if it was removed.

"If Microsoft 365 Copilot weren’t delivering real value, our people simply wouldn’t be using it – our high adoption rate is what shows us that there is value," Leraris said. “That’s what led us to continue deploying Copilot to more people."

The Accenture deal marks a significant milestone for Microsoft as it ramps up efforts to roll-out AI tools to a wider audience – a strategy that some reports last year suggested was floundering.

Reports from The Information in December noted that the tech giant lowered sales growth targets for agentic AI products after salespeople missed quotas.

Microsoft has also announced a number of deals aimed at attracting wider appeal for core product ranges, including agreements to integrate Anthropic’s Claude AI within Copilot, and most recently with Claude Cowork features.

In March, the tech giant unveiled Copilot Cowork, a fusion of Anthropic’s agentic AI offering with its own in-house chatbot.

Not everyone is sold on AI

While Accenture has recorded marked success with Copilot, not everyone has seen similarly positive results. A survey by the National Bureau of Economic Research, for example, revealed AI's impact remains limited in terms of productivity.

Notably, Accenture’s own recent Generating Impact report highlighted a “widening gap” in terms of AI’s effectiveness in enterprise settings.

Many staff are using the technology for basic tasks, but its broader impact on organizational change and performance is often limited.

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Microsoft's facing a £2 billion lawsuit in the UK over its cloud computing and software licensing practices.

A lawsuit brought by competition lawyer Maria Luisa Stasi on behalf of nearly 60,000 businesses alleges that the company has been overcharging UK organizations that use its Windows Server on rival cloud services.

And the Competition Appeal Tribunal (CAT) has now ruled that the case can go ahead, dismissing Microsoft's arguments and saying that the case 'comfortably crosses the hurdle of having a real prospect of success'. It's granted a Collective Proceedings Order (CPO) on an opt-out basis.

"Today's ruling is an important moment for the thousands of organizations impacted by Microsoft's conduct and in ensuring that a critical sector of the economy is innovative and open," said Stasi.

"For years, Microsoft's practices have had real financial impact on both public and private organizations. I'm now looking forward to preparing for trial and getting their money back on their behalf."

The lawsuit alleges that customers using Amazon Web Services (AWS), Google Cloud Platform (GCP) or Alibaba Cloud, rather than Microsoft Azure, were charged higher licensing fees for Windows Server.

The Services Provider License Agreement (SPLA), it said, also offers lower quality services than the Microsoft Azure licensing deal.

"We are very pleased with the Tribunal's decision, including its confirmation that Dr Stasi's action should proceed on an opt-out basis, as sought in her application," said James Hain-Cole, partner at law firm Scott+Scott, which is leading the case.

"Certification of this claim is a pivotal step in securing compensation for thousands of businesses and organisations. The decision illustrates the importance of the regime for UK businesses who, like consumers, require and deserve the access to justice that it was designed to offer."

Microsoft, which has claimed that its business model improves competition, said it planned to appeal against the CAT's decision.

This case is one of many challenging Microsoft's licensing practices. Last month, the UK Competition and Markets Authority (CMA) said it planned to open a strategic market status investigation in May, covering the firm's licensing practices in relation to Microsoft 365.

In November last year, the European Commission announced another investigation to assess whether Microsoft should be designated as a 'gatekeeper' for its cloud computing services under the Digital Markets Act (DMA), despite not technically meeting the DMA gatekeeper thresholds for size, user number, and market position.

And last summer, the firm settled a $22 million case with cloud industry group Cloud Infrastructure Service Providers in Europe (CISPE) that claimed customers on non-Azure platforms were paying a 20% surcharge on Microsoft software. Other investigations have been launched over the last year in Brazil, Switzerland, the US, and Japan.

One week after announcing it’s putting its UK Stargate plans on ice, another facility that was expected to rent capacity to OpenAI has instead found itself an alternative customer.

According to an announcement from neocloud provider Nscale, which owns both the data centers in question, it will add more than 30,000 Nvidia Rubin GPUs to its 230MW campus in Narvik, northern Norway. These will then be rented by Microsoft, starting in 2027.

This is a far cry from the original plans for the data center, however.

In July 2025, Nscale, OpenAI, and Aker announced they would be creating the first AI gigafactory in Europe and the first European facility in the OpenAI for Countries program, in the form of Stargate Norway.

It was reported at the time that there would be an initial 100,000 Nvidia Rubin GPUs installed by the end of 2026 for the project, with an initial 230MW of capacity. This was anticipated to scale to 520MW over time with the numbers of GPUs also increasing.

OpenAI CEO Sam Altman said: “I've always said we'd love to bring Stargate to Europe if the conditions are right, and we think we've found that in Narvik with clean, affordable energy, ideal climate, and great partners in Nscale and Aker. Stargate Norway will help provide the compute power to drive the next wave of AI breakthroughs and economic progress for Europe, in Europe.”

A statement from OpenAI to ITPro today, however, indicated that OpenAI’s involvement is rather less direct than it appeared in July.

An OpenAI spokesperson told this publication: “We are moving ahead with our plans in Norway. Microsoft is an important partner in our network and we will work with them to access compute in Norway just as we already do in other parts of the world.”

Microsoft’s involvement wasn’t mentioned in the original Stargate Norway announcement, however, and there have been other changes in the set-up, too. In March 2026 it was announced Aker and Nscale would be rolling up the joint venture that established the Narvik facility fully into the neocloud provider. At the same time, Aker became the largest shareholder in Nscale.

The news that OpenAI won’t be directly renting capacity from Nscale in Norway – with the Stargate Norway branding seemingly being dropped at the same time – comes only one week after a similar move in the UK.

On 9 April, a spokesperson told ITPro that it was pausing its Stargate UK plans – which also revolved around renting Nvidia GPUs from Nscale – due to the regulatory environment and energy prices in the country. OpenAI declined to comment on whether similar considerations are in play with Stargate Norway, although energy prices are notably lower in the nordics.

In the meantime, Nscale may have found another tenant for the London facility. According to Bloomberg, Google will rent the capacity left open by OpenAI’s decision to put the brakes on its investment.

Turning to gas to power data centers means Microsoft's carbon footprint from such infrastructure will more than double.

That's according to an analysis from Stand.earth Research Group (SRG), which argues that three methane gas projects announced in the last month to power AI data centers for the company will send its carbon footprint skyrocketing 160%.

“Microsoft makes great claims about its climate credentials, and has shown real leadership in the past, which makes it even more disappointing to see the company so wholeheartedly turn toward fossil fuels – proposing nearly 5GW of new fossil fuel power in just the first few months of 2026 – while still promising to be on track for its climate goals," said Rachel Kitchin, senior corporate climate campaigner at Stand.earth.

"The gap between what Microsoft says, and what Microsoft does, seems to grow wider by the day."

The analysis comes amid a boom in data center construction driven by AI, which is already driving up energy demand. The rush has caused some tech companies to turn to alternative fuel sources, including nuclear, but also led to an increase in gas-powered data centers.

In recent years, increased generation of data center power using fossil fuels has sharply increased tech emissions.

Indeed, back in 2024, Microsoft's emissions surged 29% off the back of data center building, while Google admitted its emissions were up 50% due to AI energy demand. Despite such concerns, Google-owner Alphabet last month called for more power generation to feed AI.

In response, campaigners have demanded the UK government enforce stricter emissions rules for data centers.

Gas-powered AI

The SRG analysis points to a trio of data center projects powered by methane gas. The first is an exclusive agreement with Microsoft and Chevron for 2.5GW of power for a data center, while the second involves Microsoft leasing a 900MW facility in Abilene, Texas, which applications reveal has plans for methane gas powered turbines.

SRG calculates that those three projects alone will emit 15.52 million metric tons of carbon dioxide emissions – despite Microsoft's own plans to become carbon negative, including with data centers, by 2030.

ITPro contacted Microsoft for comment, but had not yet received a response at the time of publishing.

On-site power

Last month, Big Tech players in the US signed an agreement with the government to "build, bring or buy" their own power to data centers, in the hopes that would keep electricity prices down. However the agreement didn’t include any provisions to use renewable sources.

That, alongside dated electrical grid infrastructure, has led some data center companies to generate energy on site. In some cases that's achieved by co-locating with existing power stations such as nuclear facilities, but in others that's involved turning to gas.

SRG notes that at the end of 2024, data centers made up 5% of demand for methane gas power, but just a year later, that has leapt to 39%.

"Proponents of these fossil fuel-powered hyperscaler projects may, for example, point to the opportunity to leverage methane that would otherwise be burned off as part of the conventional extraction process, which is a convenient perspective to hold if you’re an oil-and-gas giant seeking to entrench new dependents," said Kitchin.

"However, if you’re one of the world’s leading technology companies that has for years proudly touted its decarbonization goals, the visions don’t line up."

"Renewables are the cheapest form of energy to build, aren’t subject to the massive price volatility compared to fossil fuels, and don’t drive up people’s utility bills," she added. "Microsoft has shown that it knows how to build renewables quickly and at scale, so to get back on track, it needs to cancel these pollution-producing contracts and recommit to around-the-clock clean energy."

Microsoft has announced plans to cut prices for its Windows 365 Cloud PC service next month.

The 20% rate cut, which comes into effect from 1 May, is aimed primarily at small businesses, according to the tech giant. The firm said the reduction will make cloud personal computers “more cost effective”.

It’s worth noting that the 20% reduction appears to apply to new customers only, with existing subscriptions receiving updated pricing at their next renewal and “subject to purchase channel and terms”.

Regardless, the update comes amid rising hardware prices for businesses of all sizes due to surging RAM costs. Combined with device refresh cycles and the shift to Windows 11, SMBs are expected to be among those worst hit by the surge.

Last month, Omdia recorded a 60% rise in prices for PCs across Q1 of 2026 while Gartner projects a 130% surge in combined DRAM and SSD prices by the end of the year.

As ITPro previously reported, low-budget devices are expected to be the hardest hit due to skyrocketing prices, with manufacturers prioritizing higher-end options to absorb costs.

Microsoft touts on-demand benefits

In addition to the price cut, Microsoft said the update will introduce an “on-demand start experience” that aims to deliver better performance.

From May, cloud PCs will stay powered on for one hour after sign-out/disconnect, the company said. Reconnects within a period of one hour will remain unchanged.

“Reconnects after more than an hour might take slightly longer as the Cloud PC resumes from hibernation (with the same performance once connected),” the company said in a blog post.

What to expect with Windows cloud PCs

Windows cloud PCs come in a range of separate packages, all of which support desktop versions of Microsoft 365 apps.

The basic package, which includes two vCPUs, 4GB RAM, and 128GB storage comes in at £26.90 per user, per month (£32.28 including VAT).

Meanwhile, the standard package, which will set you back £35.60 per user, per month, includes two vCPUs, 8GB RAM, and 128GB storage. Each package has a maximum of up to 300 seats.

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Microsoft has confirmed that terms describing Copilot as for “entertainment purposes only" need to be updated.

The terms of use for Copilot have raised eyebrows, sparking bemusement online and coming amid wider concerns that the use of AI in businesses is leading to "workslop" that employees spend half their day fixing.

The terms state: "Copilot is for entertainment purposes only. It can make mistakes, and it may not work as intended. Don’t rely on Copilot for important advice. Use Copilot at your own risk."

That document was last updated back in October, when they were "rewritten and reorganized."

Previous versions of the terms stretching back to 2023 didn't include that exact same line, but did note: "The Online Services are for entertainment purposes; the Online Services are not error-free, may not work as expected and may generate incorrect information."

Microsoft confirms T&Cs changes

Though the language isn't entirely new, it was spotted by users and posted to social media at a time when Microsoft is facing some backlash to how heavily it's embedding Copilot into Windows.

Last month Microsoft announced plans to dial back some AI features in Windows amid a growing backlash against Copilot, and in January revealed plans to allow admins to remove the Copilot app completely if it wasn't being used.

The tech giant has also recorded its worst quarter since the 2008 financial crisis, with one analyst suggesting the firm is "in a pickle" over issues with Copilot, particularly adoption rates.

Microsoft said it would update the disclaimer as the terms are now out of date.

"The ‘entertainment purposes’ phrasing is legacy language from when Copilot originally launched as a search companion service in Bing," a Microsoft spokesperson told PCMag.

"As the product has evolved, that language is no longer reflective of how Copilot is used today and will be altered with our next update."

ITPro approached Microsoft for comment, but did not receive a response by time of publication.

AI warnings

While reports noted social media users laughing that Microsoft's language echoes the legalese used by psychics and ghost hunters, such disclaimers are also common among AI developers — though they warn about potential risks rather than declaring their products "entertainment".

The terms for xAI state that its service "may contain errors, defects, bugs or inaccuracies that could fail or cause corruption or loss of data and information”.

These particular terms request users agree not to "rely on output as the sole source of truth or factual information, or as professional advice."

OpenAI features the same language, also warning the service may not be "error free" while Anthropic warned that Claude outputs “may not always be accurate" and "actions may not be error free".

Microsoft also adds in its terms: "always use your judgment and check the information you get from Copilot before you make decisions or act."

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Microsoft and Amazon have announced changes to cloud practices following a lengthy probe by the Competitions and Markets Authority (CMA), provoking mixed reactions from industry stakeholders.

While the regulator concluded in 2025 that both hold “positions of significant market power”, neither were given a Strategic Market Status (SMS) designation.

This is a label given to organizations that hold a disproportionate influence on markets and allows the CMA to impose “conduct requirements or introduce pro-competition interventions” under the Digital Markets, Competition, and Consumer Act (DMCC).

In the wake of the investigation, both hyperscalers have agreed to take action on key issues such as cloud egress fees, interoperability, and the ability of customers to switch providers.

In a statement, the CMA said this will “support greater choice” for businesses and public sector organizations across the country.

“These changes will reduce expense and effort for UK customers when using more than one cloud provider,” the regulator said.

As part of the announcement, the CMA revealed plans to launch a separate SMS probe into Microsoft’s software practices due to competition concerns. Expected to begin in May, the investigation will see the regulator examine the firm’s business software licensing practices.

In a blog post reacting to the cloud market decision, Microsoft president Brad Smith said the company is committed to working “quickly and constructively” to address the CMA’s concerns.

“We appreciate the opportunity we have had for direct and constructive conversations with the CMA and its staff and look forward to an ongoing dialogue in relation to relevant cloud issues in the future,” he wrote.

Amazon said it is working toward a “new UK Addendum that formalizes our commitment to customer choice through clear, comprehensive rights around multicloud adoption, data portability, and switching processes”.

Industry stakeholders aren’t sold

Experts have mixed reactions to Amazon and Microsoft’s moves to address issues flagged in the cloud market probe.

CCIA senior director Matthew Sinclair said the decision will avoid “overly broad and prescriptive interventions” that could harm UK cloud innovation.

“The regulator can focus its efforts on action to address specific issues, particularly restrictive software licensing terms for legacy software, which are costing UK users a fortune,” Sinclair noted.

Nicky Stewart, senior advisor at the Open Cloud Coalition, urged the regulator to take “swift action” against both organizations if they fail to meet commitments on egress fees and interoperability.

“Slow progress on these issues continues to hamper growth, innovation, and resilience in the UK cloud marketplace,” Stewart commented. “Decisive action will set a benchmark for competition authorities across Europe and beyond.”

In contrast, Mark Boost, CEO at UK-based cloud provider Civo, questioned whether the voluntary actions by both firms will deliver changes called for by industry stakeholders.

“Voluntary arrangements made with parties outside of the SMS framework will not provide real impact, and by delaying its final decision regarding Microsoft and excluding AWS altogether, there is a risk for CMA to unnecessarily prolong uncertainty and miss an opportunity to future-proof the UK’s digital infrastructure,” he said.

Boost added that the CMA’s decision does not provide “adequate solutions” to solve lingering concerns over the dominance of both hyperscalers in the UK market. Last year, the regulator found Amazon and Microsoft controlled a share of the market ranging between 30-40%.

“There needs to be a fair digital market in which domestic innovation is encouraged, alongside continuing to help build opportunities for international collaboration and trade,” he said.

“If the CMA is serious about delivering on this, it will need to adopt an integrated approach as opposed to only partially regulating these hyperscalers. If the same standards are not applied to both parties, the UK will jeopardize its objectives related to digital sovereignty and economic stability.”

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Microsoft's retirement of a key OS deployment (OSD) tool is forcing admins into a scramble to find new tools – and the cloud might not offer all the answers.

That's according to a survey of IT professionals from Recast Software, which found that although 99% say OS deployment is important, 18% are still relying on Windows Deployment Services (WDS) or the now-retired Microsoft Deployment Toolkit (MDT).

The survey highlights the urgency of finding alternatives or replacements, according to David Segura, Senior Software Engineer at Recast.

Part of the drive to find alternatives is down to Microsoft retiring MDT in January, with WDS losing significant features and being partly deprecated.

Segura noted that once the VBScript component is removed from Windows 11 releases – expected to happen next year – MDT will no longer be able to deploy new versions of the OS.

"The organizations that are managing this transition well aren't waiting for MDT to break," Segura said in a blog post. "They're planning now."

The shift to cloud hasn't changed the importance of bare-metal deployment, thanks to ransomware recovery, hardware upgrades, and production imaging at scale, which involves deploying OS builds across large fleets with a custom image, he said.

"With 81% of respondents rating bare-metal or disaster recovery OSD as having a high or critical importance, the urgency is real," Segura said. "Organizations leaning on a retired tool for a critical workflow face compounding risk the longer they wait."

Finding a better way

The results of the poll suggest that teams are moving to more modern management options, with 48% Intune-only and 40% hybrid.

Key pain points remain, however, including maintenance overheads (28%), driver management (25%), speed (20%), and costs (11%) all highlighted in the survey.

"These aren't new problems, but they're persistent ones," Segura said. "The common thread: SysAdmins want OSD to be less work, not more, especially as environments grow more complex."

While companies are shifting to Intune, or a mix of ConfigMgr and Intune, Segura noted that isn't always enough.

"The challenge is that OSD and imaging workflows don't map 1:1 from ConfigMgr to Intune," he said.

"Autopilot handles provisioning for new devices in Intune, but it wasn't designed for bare-metal rebuild or disaster recovery scenarios. Organizations moving to cloud management still need a way to handle those cases."

Next steps for admins

Segura warned that action was needed now, regardless of what alternative your company chooses.

"If your organization is still running MDT, the window to plan a replacement is narrowing," he said.

The first step is to audit your bare-metal OSD dependency to understand which workflows continue to rely on MDT or WDS.

For those switching to cloud management, it's time to audit OS deployment to see anywhere that lacks coverage from existing tools.

"Those are your risk areas," he said.

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The Competition and Markets Authority (CMA) has launched an investigation into Microsoft’s software licensing practices due to competition concerns.

A strategic market status (SMS) investigation will begin in May and see the regulator examine the tech giant’s licensing practices in relation to Microsoft 365.

The business software suite includes a host of popular applications, including Word, Excel, and Teams.

Sarah Cardell, chief executive of the CMA, said an SMS designation would allow the regulator to “tackle remaining concerns around Microsoft’s licensing practices” and “ensure a level playing field as AI is rapidly embedded into everyday business software tools”.

An SMS designation is a label applied by the regulator to technology providers that hold a disproportionate influence on certain markets - in this case, business software.

AI interoperability in the crosshairs

Notably, the regulator specifically highlighted the emergence – and interoperability – of AI tools such as Copilot as a key focus of the probe.

This aspect of the investigation comes amid the rapid adoption of AI tools by public and private sector organizations across the UK. Microsoft, in particular, has positioned its Copilot services as a core application in its business software estate.

“The implications are significant for UK productivity, competitiveness, and value for money across the private and public sector,” the CMA said in a statement.

“The UK will benefit most where a broad range of competitors can integrate with Microsoft’s business software, so that businesses and public sector organizations can mix-and-match AI software across suppliers to best suit their needs.”

Microsoft, Amazon cloud licensing changes

The launch of the probe comes after Microsoft and Amazon both agreed to address competition concerns surrounding cloud services.

The two hyperscalers have been subject to a long-running investigation by the regulator over their dominant positions in the UK cloud computing market.

Key issues such as interoperability and “egress fees” – which place high costs on customers transferring data to other services – were highlighted in the probe.

Last year, the CMA concluded the duo’s dominance actively harmed competition in the country’s cloud computing market – a ruling that prompted a fierce reaction.

“Both firms are taking material steps to lower egress fees and improve interoperability, including as reflected in announcements the firms are issuing today,” the CMA said in a statement.

“These actions create benefits for UK businesses, enabling greater scope for multi-homing to support customer choice and the resilience of UK tech stacks.”

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A preview of a major Windows 11 update has been paused by Microsoft after users reported installation errors.

The update, KB5079391, is a preview of non-security features for Windows 11, so it won't have gone out to all users. The preview was first released last week, and paused a day later.

While spotting a flaw in an update is rather the point of previews – it's better than the update going out to a wider user base – the error comes hot on the heels of a pledge to improve Windows, in particular updates.

"Across the operating system, we will focus on improving the baseline reliability of areas such as the Windows Insider Program, drivers and apps, updates and Windows Hello," the company said in a March blog post.

That promise followed a series of security patches and other updates featuring bugs that caused chaos for users by starting reboot loops, breaking reset and recovery loops, and even possibly bricking some SSDs.

Why did Microsoft pause the Windows update preview?

In this instance, the update is a non-security feature preview, so isn't a requirement to roll out quickly. The flaw appears to block users from installing the preview at all.

Reports from Tom's Hardware suggested an error message shown to users said that update files were missing or had flaws, with the system promising to download the update again later.

On Microsoft's support site, the company said: "Rollout of this update is temporarily paused due to installation error."

"To prevent additional impact while the issue is investigated, Microsoft has temporarily limited the availability of this update," the company reportedly added. "As a result, the update temporarily might not be offered through Windows Update."

Microsoft is yet to reply to ITPro's request for further comment. The update was initially released on 26 March, and was paused the following evening; as yet, Microsoft has not reissued the update.

What was in the Windows update?

The update for Windows 11 applied to versions 25H2 and 24H2 and was labelled as KB5079391. Microsoft noted the update primarily targets "production-quality improvements" for the operating system.

When the preview is fixed, the update will include new features for Windows 11 – with the company specifically highlighting new "AI powered capabilities".

That includes a tool called Narrator, which uses Copilot to describe images. This is being expanded from Copilot-only devices to all running Windows 11. Another feature is the ability to enable or disable Smart App Control without a clean install.

Alongside those, Microsoft is rolling out updates to Display reliability and a few usability tweaks to Account Settings and File Explorer.

"You can more reliably unblock files downloaded from the internet in order to preview them in File Explorer," the company noted, adding files can be renamed using Voice Typing.

"You can now sort the permissions entries in the Advanced Security Settings window for a folder in File Explorer by Principal."

Other improvements are coming to Windows Hello fingerprint reliability, Voice access tools, and loading taskbar components in safe mode, according to the support document.

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Microsoft is consolidating data management and data ontology to support the expansion of agentic AI, with new tools intended to make data analytics, labelling, and context sharing easier than ever.

At FabCon and SQLCon 2026, held in Atlanta, the tech giant unveiled two new expansions for its SaaS analytics platform Microsoft Fabric.

Database Hub is a new unified database management plane for Microsoft Fabric, with built-in AI agents and Microsoft Copilot allowing for natural language exploration of enterprise data across Azure SQL, Azure Cosmos DB, Azure Database for PostgreSQL, and others.

Microsoft is also expanding the extent to which enterprises can ground AI in business context through Fabric IQ, with new semantic and ontological controls supported through a new model context protocol (MCP) server in preview.

ITPro spoke to Amir Netz, CTO of Microsoft Fabric, to understand the context for the announcements and the problems Microsoft is looking to solve at the data layer.

Netz is one of the original creators of the data analytics and visualization suite Power BI, which started life as Power Pivot and Power Query within Microsoft Excel.

He told ITPro he is “incredibly happy” with the uptake in the years since, and that his team has now turned its attention to further consolidating and easing the process of data retrieval and analytics.

The goal, he noted, is to do for data what Microsoft Office did for productivity, by rolling multiple products into one.

“You would never think about buying Google Sheets and using it with Word, that seems kind of ludicrous, because the power of integration is amazing and people really appreciate integration over almost any other feature you can have in a suite.

“And the world of data is so complex, and so fragmented, that when we came with Fabric we said, ‘we want to really do what Office did for productivity, we want to do with data’.”

This involved taking approximately 20 distinct data services at Microsoft and integrating them into a single product to meet enterprise data workload needs, Netz explained. It includes batch data, streaming data, data warehousing, business intelligence, machine learning, Internet of Things (IoT), and data lakes.

Netz added that 90% of the Fortune 500 now uses Fabric, with revenue and users on the rise.

Fabric, IQ, and OneLake

In 2023, Microsoft launched Fabric in preview along with OneLake, a new unified SaaS data lake that Netz dubs “the OneDrive for data”.

Within OneLake, organizations can use ‘shortcuts’ to point to external data without duplicating it. Another solution, Mirroring in Fabric, allows users to replicate data sources such as Azure SQL, Google BigQuery, Oracle, SAP, or Snowflake directly within OneLake with low latency.

“It doesn't really matter where it's physically sitting, and that's super, super important, because fragmentation is poison, it's so hard to work with data that is fragmented,” Netz said.

Data is often named and labelled poorly, Netz said, which can lead even the most qualified experts to struggle to use it to its full potential.

“If I took the smartest person in the world, IQ 180, just graduated from MIT, and I brought them in front of the data lake with 100,000 tables, and I gave them a business question, they will struggle,” Netz told ITPro.

Microsoft is looking to Power BI to solve this problem with semantic models, which help to describe, define, and act as a “reference manual” for dense data, Netz explained.

On top of this foundation, AI can begin to process and reason through institutional knowledge, beyond basic functions such as analytics or reporting.

At launch, the natural language function within Database Hub is powered by Microsoft’s default OpenAI models, but Netz added that in the near future customers will be able to pick their own including those by Anthropic or others.

“I think the world of BI is moving to the same place,” Netz said.

“Instead of the human users going report by report, page by page, visual by visual, we are going to see the humans going to the Copilot and asking the question, and letting the AI be the one who is visiting the reports, reading what’s on the pages, the visualization, synthesizing the answers, and giving the answer back.”

Using Ontology for reliable agentic AI

Throughout his conversation with ITPro, Netz stressed the importance of institutional knowledge for making sure AI agents act in a similar manner to human workers.

He gave the example of an airline, which has data like any other organization but will also have unique organizational processes that need insider knowledge to run properly.

“I can imagine how British Airways works, but I don't really know how British Airways works,” he said.

“When a British Airways employee is joining British Airways, they're getting orientation, somebody explains how the organization is working. And there's a lot to know, like how do you assign flight crews to the plane? How do you make sure that the baggage is offloaded online and getting the right carousel? There is a process.”

This is where ontology comes in, providing machine-readable mapping of an organization’s data, its properties, and the relationships between entities within databases in the context of the organization.

Microsoft uses Ontology in Fabric IQ for this functionality, as Netz explained.

“The ontology is describing your business in the most operational aspect of the business. How are things related? What are the rules? What are the policies? What are the actions you can take? What can I do with a plane? I can assign a crew to a plane. I can divert the plane. I can ground a plane. I can load the plane with luggage.”

An understanding of organizational ontology is essential for agentic AI, Netz added. Microsoft expects 1.3 billion agents to go live by 2028 and leaders will need to implement organizational guardrails to prevent them from misbehaving.

Open source standards such as MCP and agent to agent (A2A) can impose specific behavioral limits for agents, as well as set ethical constraints such as how tools can be used and who is allowed to access specific data.

But because these rules are invoked at the execution stage, they aren’t a comprehensive method for keeping AI agents predictable.

Netz told ITPro that Microsoft thinks agents will have human managers and lower-level work carried out by database administrators will be automated to an increasing extent.

As organizations deploy AI agents such as OpenClaw, they will need to clearly map out business goals and values through ontology to ensure tasks are completed in line with all expectations.

“Think back to British Airways: they want to be profitable, but they also want to have customer satisfaction and they also want to take off and land the plane safely.

“Which one takes precedence over which? How much are you willing to sacrifice in safety to get more profitability? These are things that MCP tools don't tell you, because these are the things that we expect employees to understand… you don’t do these things, you don’t take risks with planes not landing safely just to make a few more dollars. But AI may not know that.”

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Microsoft has announced that Copilot Cowork will now be available for customers via the tech giant’s Frontier program.

The move comes hot on the heels of Copilot Cowork’s unveiling last month, which will see Anthropic’s highly popular tool integrated with the flagship AI service.

In a blog post confirming the launch, Jared Spataro, Microsoft’s chief marketing officer for AI at Work, said Copilot Cowork will help teams automate a range of tasks and boost productivity.

“Copilot Cowork makes it easy to delegate and complete work,” he said. “Describe the outcome you want, and Copilot Cowork creates a plan, reasons across your tools and files, and carries work forward with visible progress and opportunities to steer.”

Launched in January this year, Claude Cowork is a workflow orchestration tool that allows users to automate tasks using AI agents.

The popular service comes equipped with plugins for a range of business domains, helping to automate tasks in marketing, legal and data analysis settings.

So far, integration of Cowork with Copilot has been limited to a select pool of customers. This expansion will give a wider range of enterprises early access to the service.

Upon full release, Copilot Cowork will be accessible through Microsoft 365’s E7 AI subscription tier.

What to expect with Copilot Cowork

According to Spataro, Copilot Cowork comes with built-in “skills”, which are essentially plugins aimed at automating specific tasks.

This includes skills designed for calendar management or providing users with daily briefings on tasks.

“Copilot Cowork can handle everything from one off tasks to repeatable workflows like a monthly budget review,” Spataro explained.

Early testing of Copilot Cowork among select customers has helped deliver significant productivity improvements, according to the tech giant.

Barton Warner, SVP of enterprise technology at Capital Group, said Copilot has helped the investment management firm automate a range of tasks.

“We have been using Copilot since its launch in 2024, and the new capabilities in Cowork will help us automate and scale the Copilot ecosystem,” he said.

“This isn’t about generating content or answers. It’s about taking real action - connecting steps, coordinating tasks, and following through across everyday workflows,” Warner added.

“Because Cowork operates on our enterprise data and within our security and risk boundaries, we can experiment, learn, and scale with confidence. That allows us to move faster and focus AI in places where it actually delivers value.”

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It’s not often that I feel bad for the chief executive of a multinational, multi-trillion dollar company. Well, when Satya Nadella, CEO at Microsoft, wrote a LinkedIn post in late 2025 all but begging the public to “...get beyond the arguments of slop vs sophistication and develop a new equilibrium in terms of our ‘theory of the mind’”, I’m happy to say he kept my streak alive.

He also doubled down, like most tech leaders are want to do these days, at the World Economic Forum in Davos where he said AI needed broader adoption because of a possible loss of “social permission” to use natural resources if it fails and gave a fairly dire definition of an AI bubble.

“I mean I think a telltale sign of if it's a bubble would be if all we're talking about are the tech firms,” Nadella added.

I take some solace in the fact that the same company quasi-demanding that the Copilot key on your keyboard be mandatory is entering the spring of their discontent. Two massive branding problems and we’re not even halfway through the year.

You see, Nadella failed to heed the lessons of what is commonly known as the Streisand Effect. This is the phenomenon in the court of public opinion, so often broadcast on social media, where trying to actively get people to ignore something you’ve done will actually cause the reverse to happen. As ITPro’s managing editor, Jane McCallion, put it on Bluesky: “I can't quite put my finger on why, but Nadella requesting we stop saying AI slop reminds me of Jeb Bush asking the audience to ‘please clap’.”

While Nadella’s approach wasn’t quite as meme-tastic as Bush’s faux pas – at least Bush didn’t try to dress up his wording as C-Suite style optimism – the underlying intent is rooted in the same thing: an undying belief that those with the biggest budgets can make magic in public. His blog post is the first crack in this AI-powered armor.

What Nadella and his colleagues have failed to understand is rule number one of public relations: don’t fan the flames. One can just imagine the seismic amount of headslapping that went on in Microsoft’s PR offices.

The good news for Nadella is that he’s far from the first tech CEO to stick his foot in his mouth in this fashion. Hell, there were leaders at CES in January that made similarly dubious announcements. It’s hard to defend, for example, companies appearing at the convention while simultaneously pulling out of the consumer vertical for their own products and nothing quite says AI slop as valiantly as Razer’s AI anime companion.

So, allow me to take a few lessons from that theatre degree, focused on disability, identity, and solo performance, and impart them to tech leadership who only see the arts as a good charitable write off.

First, take a breath. It should surprise no one that upper level executives at massive tech companies could be out of touch with the general public, but I think the root of the issue is they don’t take more than a few seconds in those very public moments to remember who their audience is.

On stage at Davos, BlackRock CEO Larry Fink was a friendly interviewer for Nadella and no doubt the audience was similarly inclined. The key difference is that messages at the World Economic Forum have a different audience than shareholders meetings. These comments will break containment. The everyday person Nadella kept talking about is not, as he posits, the knowledge worker or healthcare administrator crying out for efficiency; they are people with growing distrust of the content these AI models are spitting out.

Second, go back to basics. Regardless of whether we’re talking about art, sports, or tech, when you start to lose the thread, it’s time to come back to your foundation.

Not some self indulgent mantra of CEO first principles but a grounded process, aimed at key people in your user base. If a basketball player is in a shooting slump, they’ll often use a deconstructed form to get back in rhythm; a singer has a really specific warm up and cool down; and even someone on Nadella’s scale could use going back to these simple reps. Ditch the giant corporate case studies and look at what “social permission” actually means.

Lastly, come up for air. When you’re in a theatre show it can often be really easy to stay within your bubble. There’s this sort of post-performance malaise you can fall into once a show is over, as you come out of this creative cocoon and enter back into the real world.

Now, I’m not insinuating that the bear pit of multinational corporations is anything like an indie theatre rehearsal environment. What I can tell you is this: both situations require the fresh air of a reset. Nadella and his compatriots could use a dose of time away from these self indulgent spaces like the World Economic Forum or a self-penned blog post.

Otherwise, we’ll keep seeing these headlines. But hey, at least the Reddit content is good for a laugh.

Microsoft has announced plans to dial back AI features in Windows 11 as the company looks to counter growing customer pushback.

The tech giant revealed it will integrate AI “where it’s most meaningful” across the operating system.

In a blog post on Friday 20 March, Pavan Davuluri, EVP of Windows and Devices, said the company plans to reduce “unnecessary Copilot entry points” for certain applications.

These initially include Notepad, Snipping Tool, and various widgets, Davuluri said.

“You will see us be more intentional about how and where Copilot integrates across Windows, focusing on experiences that are genuinely useful and well‑crafted,” he wrote.

“As part of this, we are reducing unnecessary Copilot entry points, starting with apps like Snipping Tool, Photos, Widgets and Notepad.”

The announcement from Microsoft marks the second roll-back on integrated AI features in the space of a month. According to recent reports from Windows Central, the company put plans to roll out new AI features in Windows 11 on the back burner.

The publication noted that AI features were planned for File Explorer, the settings app, and other core functions.

Customer pushback

Microsoft has faced criticism over its persistent integration of Copilot features across the operating system, a strategy it has pursued for over 18 months now.

As ITPro reported in November last year, Davuluri outlined plans to transform Windows into an “agentic” operating system with more AI-infused capabilities.

In a post on X ahead of the company’s 2025 Ignite conference, Davuluri said Windows is “evolving into an agentic OS, connecting devices, cloud, and AI to unlock intelligent productivity and secure work anywhere”.

The post prompted significant pushback at the time, with users questioning the need for increased AI features rather than a sharpened focus on performance and reliability.

Gergely Orosz, software engineer and curator of the Pragmatic Engineer newsletter, noted a growing sense of frustration among developers due to the Windows AI shift.

In his recent blog post, Davuluri said the company hopes to improve communication with Windows users through the Insiders program, as well as a new feedback hub.

“Your feedback is essential to improving Windows, and it should be easy to share and see what others are saying,” he wrote.

“Today, we’re rolling out the largest update to Feedback Hub yet to our Insiders, with a redesigned experience that makes it faster and easier to submit feedback and engage with the community.”

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A host of big tech firms have handed over $12.5 million in funding to advance open source security and try to eliminate "AI slop" bug reports.

Firms including OpenAI, Anthropic, AWS, Google, Microsoft, and GitHub have pledged funding for Alpha-Omega and the Open Source Security Foundation (OpenSSF), both security initiatives within the Linux Foundation.

The aim is to develop long-term, sustainable security solutions that support open source communities worldwide.

The move comes as open source maintainers contend with an unprecedented number of security reports, many of which are generated by automated systems.

Mark Ryland, director of the Office of the CISO for AWS, said these AI-generated reports are overwhelming their ability to review them.

"Many of the reports are of very low quality — a reality given rise to the new industry term 'AI slop'," he said. "Many projects have already elected to put guidelines in place for AI submissions, while others have shut down upstream contributions entirely to prevent a flood of AI-generated pull requests."

Closer ties with open source maintainers

The new investment will allow Alpha-Omega and OpenSSF to work directly with maintainers and their communities to make emerging security capabilities accessible, practical, and aligned with existing project workflows.

“Grant funding alone is not going to help solve the problem that AI tools are causing today on open source security teams,” said Greg Kroah-Hartman of the Linux kernel project.

“OpenSSF has the active resources needed to support numerous projects that will help these overworked maintainers with the triage and processing of the increased AI-generated security reports they are currently receiving.”

The GitHub Secure Open Source Fund is adding an additional $5.5 million in Azure credits and funding to provide training and expertise.

GitHub Security Lab, meanwhile, is improving the security advisory experience on GitHub and Private Vulnerability Reporting (PVR) features, with an eye on reducing the burden of low-quality reports and helping maintainers manage increased volume.

Google, meanwhile, will provide AI-powered tools like Big Sleep and CodeMender from Google DeepMind – already used to protect the company's own systems. It's also extending research initiatives like Sec-Gemini to open source projects.

“Our commitment remains focused: to sustainably secure the entire lifecycle of open source software,” said Steve Fernandez, general manager of OpenSSF.

“By directly empowering the maintainers, we have an extraordinary opportunity to ensure that those at the front lines of software security have the tools and standards to take preventative measures to stay ahead of issues and build a more resilient ecosystem for everyone.”

AI slop reports are skyrocketing

Concerns about AI slop bug reports have been voiced by a number of organizations, including the Python Software Foundation.

Developers behind cURL, an open source command line interface (CLI) tool which allows developers to transfer data, recently shut down its bug bounty scheme in response to a growing number of slop reports.

As ITPro reported at the time, lead maintainer Daniel Stenberg said the current volume of submissions is placing a “high load” on the security team.

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Microsoft’s cooling relations with OpenAI have been well documented over the last 18 months. While the duo were initially lockstep in leading the generative AI boom, they’ve been slowly drifting apart – and it seems Microsoft has a new poster child in Anthropic.

With the launch of Cowork for Copilot, the integration of Anthropic’s popular Claude Cowork tool with the tech giant’s flagship AI service, Microsoft is finally divesting itself – at least in some capacity – from OpenAI and looking to pastures new.

This latest development is but one in a number of signs indicating it’s been on the lookout for a new leading partner in the AI space.

As ITPro previously reported, Microsoft was exploring the possibility of integrating third-party alternatives to power Microsoft 365 Copilot as far back as January 2025.

The tech giant insisted at the time that OpenAI would continue to be a leading partner on frontier models, but in hindsight this was the first major crack in the duo’s happy family veneer.

September saw Microsoft finally rip off the bandaid in this regard, signing a deal with Anthropic to use its Claude AI models alongside OpenAI’s.

OpenAI has become a liability

It’s hardly surprising Microsoft has been looking elsewhere given the aggravation OpenAI has caused over the last two years. The first clear signs of strain came with the farcical leadership debacle which saw Sam Altman ousted and then return within a matter of days.

That situation was a PR nightmare for Microsoft, and CEO Satya Nadella was reportedly furious at the events.

That should have been – and very well might have been – the first signs for Microsoft that OpenAI was something of a liability. The company’s activities since then haven’t exactly been reassuring, either.

As I’ve mentioned in previous columns for ITPro, the company doesn’t appear to have a clear cut idea of what it wants to be.

Acquisitions aimed at making a charge into the hardware domain highlighted this lack of cohesion and the company’s seemingly endless balancing act catering to both the consumer and enterprise markets has been exhausting.

And that’s before you get into the array of circular deals and lavish spending plans OpenAI has committed to, which based on recent reports appear to be cracking at the seams.

Simply put, OpenAI has been so deeply integrated across Microsoft’s core product ranges that if the company even so much as wobbles in its ambitious plans over the next five years, it could spell disaster for the tech giant. Having a backup option – and an industry leading one at that – makes perfect sense.

Anthropic has proven it’s more than capable of going toe-to-toe with OpenAI over the last two years, consistently outperforming its great rival on model performance across repeated upgrades.

Microsoft’s key industry competitors, AWS and Google Cloud, both saw the value of Anthropic early on, investing heavily in the company in their own attempt to keep pace with the dominance of the Microsoft-OpenAI partnership during the early stages of the generative AI race.

Nobody wants a walled garden

Crucially, Microsoft cozying up to Anthropic makes more sense when one considers the demands of enterprise customers. Nobody wants a return to walled gardens like the early days of the cloud.

Many businesses are now working on a hybrid or multi-cloud setup, for example, meaning they’ve grown accustomed to flexibility and choice.

Admittedly, these are two areas in which Microsoft doesn’t have a squeaky clean record. European regulators and trade groups alike would probably have a meltdown seeing “choice”, “flexibility”, and “Microsoft” uttered in the same sentence.

Regardless, giving users another option when using its Copilot service adds to the allure for enterprises – and it comes at a crucial time. In the company’s Q2 FY2026 earnings call, Microsoft hailed record momentum with Microsoft 365 Copilot, which it claims now boasts over 15 million paid users.

Deeper integration of Anthropic models across core products just gives prospective customers more to think about.

Microsoft has announced the launch of Copilot Cowork, a fusion of Anthropic’s popular agentic AI tool with its own in-house chatbot.

The new tool is currently in preview with a “limited set of customers” and will be made available through the tech giant’s Frontier program in late March.

Unveiled by Anthropic in January, Claude Cowork is an agentic AI workflow orchestration tool which essentially acts as a digital assistant. Users can allocate agents to automate specific tasks, such as file management or sending emails, and the solution works in tandem with other tools such as Claude Code.

Cowork has proved highly popular since launching, with sector-specific plugins aimed at automating tasks spanning areas such as data analysis, marketing, and legal

With Copilot Cowork, Microsoft appears keen to capitalize on the automated workflow gains reported by users of the tool.

In a blog post announcing the integration, Charles Lamanna, Microsoft president for business applications and agents, said Copilot Cowork “makes it easy to delegate work”.

“Over the last year, we have been pushing Copilot toward taking action. That means completing tasks, running workflows, and doing work on your behalf,” he said.

“Copilot Cowork is built for that: it helps Copilot take action, not just chat.”

Copilot Cowork in action

According to Lamanna, Copilot Cowork is in preview with a “limited set of customers”, but so far, testing of the tool has allowed users to speed up administrative tasks such as meeting preparation and market research.

Notably, with Copilot Cowork, users can “triage” time management, allowing the tool to review Outlook schedules and identify scheduled clashes or “low-value meetings”.

Elsewhere, the tool is also being used to support meeting preparation for users, helping generate slide decks and documents.

“Preparing for a customer meeting can consume your afternoon”, Lamanna noted. “With Cowork, you can hand off the effort from start to finish.”

Lamanna added that Cowork can pull "relevant inputs” from email communications, meetings, and files to generate briefing documents and various documentation for users.

These are automatically saved to Microsoft 365, meaning teams can go back and fact check and refine documents.

How to get your hands on Copilot Cowork

The Copilot Cowork reveal coincides with the launch of a new AI-focused Microsoft 365 tier.

As ITPro reported last week, speculation about the launch of a new dedicated AI subscription has been mounting.

Customers hoping to use Copilot Cowork can get their hands on the tool through the newly announced E7 tier for Microsoft 365, also announced by the tech giant today.

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North Korean threat groups are using AI to ramp up efforts to infiltrate western companies with fake employees, according to new research.

Analysis from Microsoft’s Threat Intelligence Team shows three groups – Jasper Sleet, Sapphire Sleet, and Coral Sleet (formerly Storm-1877) – are using voice-changing software during remote interviews to disguise their accents and make their cover stories more convincing.

They're also using the AI app Face Swap to place their faces in stolen identity documents and generate convincing headshots for CVs.

"Threat actors are using AI to shortcut the reconnaissance process that informs the development of convincing digital personas tailored to specific job markets and roles," Microsoft warned in a blog post.

"Jasper Sleet leverages generative AI platforms to streamline the development of fraudulent digital personas. For example, Jasper Sleet actors have prompted AI platforms to generate culturally appropriate name lists and email address formats to match specific identity profiles."

The groups are also using AI to search job postings on jobs platforms such as Upwork, then using AI to make their applications meet the jobs' skill requirements.

This includes generating realistic names, email formats, and social media handles using AI prompts, writing AI-assisted resumes and cover letters, creating fake developer portfolios using AI-generated content, and using AI-enhanced images to create professional-looking profile photos and forged identity documents.

Microsoft noted that these personas are used across multiple job applications and platforms.

Voice cloning and agentic AI are in vogue

Elsewhere, Microsoft warned threat groups are using AI-generated voice cloning to impersonate executives or trusted individuals in vishing and business email compromise (BEC) scams

Once the fake workers are inside an organization, they use AI-enabled communications to support daily tasks and fit in with role expectations.

"For example, Jasper Sleet uses AI to help sustain long-term employment by reducing language barriers, improving responsiveness, and enabling workers to meet day-to-day performance expectations in legitimate corporate environments," Microsoft noted.

"Threat actors are leveraging generative AI in a way that many employees are using it in their daily work, with prompts such as 'help me respond to this email', but the intent behind their use of these platforms is to deceive the recipient into believing that a fake identity is real."

With the advent of agentic AI, Microsoft warned threat actors are also flocking to powerful new tools.

The tech giant’s threat intelligence team observed groups using agents to create semi‑autonomous workflows that help refine phishing campaigns, test and adapt infrastructure, maintain persistence, or monitor open source intelligence for new opportunities.

North Korean hackers are prolific

The problem of North Korean fake workers just won't seem to go away. While this trend primarily affected US companies, Google warned last summer that threat groups are now expanding campaigns to target European organizations.

Last month, Security Alliance (SEAL) warned that North Korean hackers are hijacking genuine LinkedIn profiles to apply for remote jobs and infiltrate enterprises.

Hackers typically use real identities, leveraging verified workplace emails and identity badges, and constructing credible employment histories to pass background checks.

Organizations are advised to tighten up their identity verification processes, including document checks and, wherever possible, in-person interviews.

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Microsoft CEO Satya Nadella believes “anyone can be a software developer” thanks to AI, but that doesn’t mean it’s the end of the road for skilled developers..

Speaking on the OMR Podcast on 1 March, the Microsoft chief said advances in AI have driven a transformational shift in development, helping to lower the barrier of entry for those outside the profession.

Indeed, practices like “vibe coding” have taken off over the last 18 months, allowing non-technical workers to build their own applications using natural language prompts.

That doesn’t mean any individual can walk into an engineering or development role, though, according to Nadella.

While the technology is lowering barriers in some areas, it’s also redefining roles, changing skills expectations, and thereby creating new challenges for enterprises, he said.

“Now anyone can be a software developer, but it's also raising the ceiling on what is this new sophistication you need in order to be productive with these new tools, so that these codebases that are getting generated are not black boxes,” Nadella claimed.

“That’s going to be what all of us will have to re-skill ourselves on,” he added.

Simply put, AI is a vital productivity tool for development teams, but it’s not a silver bullet. Teams and individual developers will have to change to accommodate new processes, adapt to new workflows, and fine-tune their skills to use these tools.

AI is driving change for developers

Nadella’s comments align with a slew of studies on how developers are adapting – or being forced to adapt – due to the influx of AI tools in the profession.

Research from Gartner in late 2024, for example, warned that developers and engineers across the industry will be forced to re-skill and upskill to compensate for the integration of AI tools.

Concerns about the need for reskilling have been compounded by simmering tensions about the potential for the technology to render developers obsolete.

A host of big tech figures have made bold claims on this front, with the impact of the technology on entry-level roles being key a focus point.

With regard to the impact on jobs, Nadella said there may be a degree of “displacement”, but this once again comes down to the ability of enterprises and engineers to redefine roles and reskill.

“I’m not saying that there is not going to be displacement,” he said. “We have to be clear eyed about it. What’s the best protection against displacement?”

“It’s to understand the new medium, the new tool, the new skills required, and transform yourself in-job,” he said. “That is what’s happening in software development.”

When pushed further on the topic of job losses, Nadella compared changes in development to the rise of early knowledge work, suggesting that current concerns bear similarities to that period.

“If somebody in the early 80s had come to us and said three billion, four billion people are going to get up every morning and type, we would have said why, we have a typist pool.”

“Why would four billion people type? We invented this entire thing called knowledge work. And so I think at some level, I'm not being [a Pollyanna] about this, but I'm saying let's at least have a bit of optimism in our ability as humans and human societies and as political economies, right? One thing that is discounted is like we have control.”

Nadella's claims about job "displacement" tracks with a November 2025 study from Gartner on the topic.

The consultancy projected that around 32 million jobs a year will be “reconfigured, redesigned, or fused” by AI from 2028 onwards.

Gartner once again highlighted the need for widespread reskilling across a range of industries, although one analyst warned this could be easier said than done.

A natural evolution for developers

Ultimately, Nadella seemed convinced AI represents the next evolutionary step in the history of software development. Reflecting on the course of his career, he noted that the profession has changed drastically over that time.

“If you look at the history of software development…I started learning with Assembly, and then compilers came, and then we went to higher-level languages,” he said.

“We [then] went to interpreted languages, and we’ve had many tool changes and levels of abstraction that made us more productive,” Nadella added.

“This one is another big leap forward in making it possible for both reducing the flow and raising the ceiling for anyone who is a software developer.”

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Microsoft has announced a new premium AI bundle for Microsoft 365 as the company continues to drive customers to its Copilot tool.

'Microsoft 365 E7: The Frontier Suite' combines Microsoft 365 E5 with Microsoft 365 Copilot and Agent 365. It's underpinned by Work IQ, the intelligence layer that connects enterprise data and organization-specific information with AI tools.

Customers will also be given access to Microsoft's advanced security tools including Defender, Entra, and Purview, which it updated last year with AI agent management in mind.

Work IQ is bringing new features to the productivity suite as part of 'Wave 3' of Microsoft 365 Copilot, which includes enhanced chat experiences and the new Anthropic-powered Copilot Cowork.

Indeed, Microsoft 365 Copilot is also getting a refresh under the hood, with the newest releases from Anthropic and OpenAI now included as model options. This includes support for Claude in mainline chat for customers in the Frontier program.

Enterprises can expect to pay more for Microsoft 365 E7, with costs of $99 (£73.65) per user, per month. However, Microsoft stated that this is a lower overall cost than businesses would face buying all the included features separately.

To date, the tech giant has offered two distinct tiers for enterprise users, E3 and E5.

E3 users get all the staple applications and features one can find in Microsoft 365 - Word, Excel, PowerPoint, and OneDrive storage capabilities. E5, meanwhile, boasts advanced security features and a few new applications such as Power BI Pro.

Microsoft 365 E3 is $36 (£27) per user, per month, while the E5 upper tier will set you back $57 (42.80).

Microsoft 365 E7: The Frontier Suite and Agent 365 will be made generally available on 1 May. At launch, Agent 365 can be purchased as a standalone extra for $15 (£11.20) per user, per month.

Microsoft eyes Copilot gains

The launch of the new bundle comes as Microsoft looks to continue driving enterprise adoption of its flagship Copilot tool.

Microsoft 365 Copilot launched in late 2023, and the company has since rolled out a host of new features, integrating AI capabilities within core product ranges and, more recently, launching agentic AI features.

In its 2025 Annual Report, Microsoft claimed Copilot had reached more than 100 million monthly active users. It’s worth noting, however, that these figures include both enterprise and consumer metrics.

In January this year, Microsoft CEO Satya Nadella also boasted that Copilot use was surging, growing “nearly 3x year-over-year” during an investor call.

Despite an apparent optimistic outlook for the firm, reports over the last year have pointed to sluggish uptake and usage. In early February, it was suggested that just over 3% of Microsoft 365 and Office 365 users who use Copilot Chat pay for it.

Meanwhile, reports from The Information in December 2025 claimed Microsoft sales personnel were struggling to meet growth targets due to lackluster demand. The publication noted this had prompted cuts to quotas of up to 50% across the year.

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Microsoft has expanded its Sovereign Cloud for AI and regulated environments, as CEO Satya Nadella hypes up the full extent of AI support the firm now offers.

Azure Local disconnected and Microsoft 365 Local disconnected are now generally available, allowing organizations to run critical infrastructure and productivity apps with Azure governance and policy controls, without the need for cloud connections.

Used via Microsoft 365 Local, customers get full control of their data, access, and compliance across the productivity suite, with core server workloads such as Exchange Server, SharePoint Server, and Skype for Business Server supported until at least 2035.

For the first time, qualified customers will also be able to use Foundry Local to run multimodal LLMs inside their on-premises, private cloud environments.

Speaking to assembled media at the Microsoft AI Tour in London, Alistair Speirs, GM for AI Infrastructure at Microsoft, said Foundry now covers “workstation class” infrastructure, including edge and air-gapped hardware, in addition to locally-hosted small language models (SLMs) on IoT devices, desktops, and laptops.

This includes tailored support for racks with AMD and Nvidia chips. Speirs added that there are currently no plans for Foundry Local to support Maia 200, with Microsoft primarily focused on AMD and Nvidia hardware.

“We’ve built the Maia chip so that it’s so focused on Azure it knows exactly where it’s running in the data center,” Speirs said.

He noted that this allows Microsoft’s global infrastructure to leverage an “unprecedented” amount of control over the chip.

Microsoft is doubling down on sovereign cloud

In the event keynote Microsoft CEO Satya Nadella said the firm is committed to sovereignty and aims to meet growing customer demands on this front.

"As you build out the data center, the requirement that now is absolutely front and center for everybody is how to ensure that in every region and every country you have sovereign controls," he said.

Nadella added that sovereign workloads form a “portfolio” for organizations to meet data residency and confidentiality requirements, across Sovereign Public Cloud, Sovereign Private Cloud, and Microsoft’s Sovereign Partner Ecosystem.

Speirs told assembled media that Microsoft is seeing new regulations targeting AI, cybersecurity, or data privacy introduced every four days.

To date, he added, over 1,000 global policy initiatives have been introduced across 69 countries – making compliance very complex.

Microsoft has positioned Azure Local disconnected as a key continuity option for sovereign environments, as well as classified and isolated workloads.

This is because it allows businesses to maintain ownership and control over their core environments, regardless of supply chain disruptions or geopolitical uncertainties.

“If you were to build some sovereign cloud infrastructure five years ago you would have made some assumptions,” said Speirs.

“But policies change, regulations change, geopolitics change. And so the ability to be able to flex and change that infrastructure is something we're really looking to build out so that as customers’ needs change, we help match that infrastructure as well.”

Nadella warned that organizations must ensure increased sovereignty doesn’t itself lead to increased risk and data exposure.

“Cyber resilience is a signals game – cyber resilience, fundamentally, is about having global intelligence to help you with your cyber resilience,”

“And so this is something that you want to think about which is, whenever you have a sovereign operation, how do you ensure that the sovereign operation does not lead to some cyber exposure?”

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UK organizations are deploying AI more strategically than ever before according to new Microsoft research – which also found leaders are increasingly concerned they won’t be able to keep up with competitor AI adoption.

The majority (84%) of organizations surveyed by Microsoft said they are now leveraging AI for competitive advantages, up from just 40% in 2025.

At the same time, almost a quarter of leaders reported worries that competitor organizations are adopting AI faster than their own. Approximately the same percentage stated that upskilling efforts will fall short of those needed to make best use of AI and plug this gap.

To date, a major sticking point for businesses looking to increase productivity through AI has been a lack of widely agreed-upon benchmarks for measuring success.

But Microsoft’s research found 90% of surveyed UK leaders are now confident their firm can properly assess the business value of their AI investments. This is a sizable jump from the 33% who said the same in 2023 and a marked improvement on the 49% who did in 2025.

“This research shows that AI is now a primary engine driving real business transformation,” said Darren Hardman, CEO at Microsoft UK & Ireland.

“The days of isolated projects are behind us and leaders are weaving AI into the very fabric of their organizations. But ambition alone isn’t enough. Lasting impact demands skills, robust data, and strong governance. Ultimately, the winners will be those organizations who make AI central to their growth strategies.”

AI front and center in business strategy

The research, conducted by Censuswide on behalf of Microsoft, drew on responses from 1,000 senior decision-makers based in the UK throughout January 2026. It included responses from leaders spanning the public and private sector, as well as from a range of organization sizes.

It found that AI has become a central plank of business strategies, with 83% of leaders stating the technology is an essential part of their organizational success strategy and 62% stating they’ve now deployed AI agents.

In addition to growing confidence and optimism in AI at the leadership level, respondents reported AI business value beyond productivity improvements.

For example, 35% of leaders said AI was improving their employee engagement and retention, while 34% cited improved customer experience and product innovation as clear benefits.

The growing normality of enterprise AI

Microsoft’s latest findings add to growing evidence that for better or worse, generative AI is becoming an increasingly normal part of the workplace.

In August, Microsoft researchers concluded the technology is finally positively impacting developers, with a majority of respondents indicating they use and benefit from AI coding tools in their daily work.

At the same time, there’s growing pressure from some board members to achieve greater ROI on AI tools, with nearly three-in-ten CEO, CTO, and COO respondents in a recent Emergn study having said the technology still isn’t living up to expectations.

The difference could be explained as an organization-by-organization variance.

Analysis by SAP published in October 2025 found that UK businesses are benefitting from AI, but that without a comprehensive plan for AI adoption rather than fragmented implementation, leaders won’t unlock the technology’s full potential.

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Microsoft has revealed all of its global electricity consumption is now matched by renewable energy generation.

In 2020, the firm said it aimed to be carbon negative by 2030, setting a target of “renewable matching” by 2025, whereby consumption is offset by production of renewable energy.

"Since our carbon negative announcement in 2020, we have contracted 40 gigawatts of new renewable energy supply across 26 countries, working with more than 95 utilities and developers across 400-plus contracts and counting," the company confirmed in a blog post penned by chief sustainability officer Melanie Nakagawa and Noelle Walsh, president of cloud operations and innovation.

"To put that amount in perspective — that’s enough energy to power about 10 million US homes. Of that contracted volume, 19 GW are now online, delivering new clean energy supply to the power grid, while the remainder are slated to come online over the next five years."

From its first 110 MW renewable power purchase agreement in 2013, Microsoft has grown to become one of the world's largest corporate purchasers of renewable energy.

The tech giant has now contracted 40 GW of renewable energy, with 19 GW currently online and operational. The remaining 21 GW is scheduled to become available within the next five years.

According to Microsoft, environmental benefits include the reduction of its reported Scope 2 carbon dioxide emissions by an estimated 25 million tons.

How Microsoft sources renewable energy

Microsoft has sourced its clean energy through multiple requests for proposal or information, bilateral engagements, and clean tariffs to evaluate over 5,000 unique carbon-free energy projects around the world.

"Today, Microsoft has six energy company partners with which we have over 1 GW of contracted renewable energy capacity, and more than 20 energy supplier partners where each partner has at least five separate renewable energy projects with Microsoft — evidence of the durable, repeatable relationships necessary to scale clean energy," said Nakagawa and Walsh.

"Our renewable energy procurement has mobilized billions of dollars in private investment, supported thousands of jobs across the communities where we operate and delivered meaningful co-benefits."

The company said it will continue with its carbon reduction strategies, adding to its portfolio of renewable energy resources. This, it said, will include nuclear energy, next-generation grid infrastructure, and carbon capture technology.

Microsoft revealed it also plans to build and leverage new AI-driven tools to design, permit, and deploy new power technologies. The company recently announced collaborations with Idaho National Laboratory and the Midcontinental System Operator.

According to data from the International Energy Agency (IEA) data, renewable energy generation has expanded nearly four-fold since 2000. In many markets around the world, clean energy is one of the fastest-growing sources of power and often the one with the fastest time-to-market.

"Corporate buyers like Microsoft continue to serve as an important catalyst in driving commercial demand for innovation and infrastructure across the power industry," said Nakagawa and Walsh.

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Microsoft's Copilot has been found reading and summarizing email messages despite "confidential" labels that should prevent the AI system from accessing the data.

The tech giant issued a warning about a bug in the Microsoft 365 Copilot "work tab" Chat which allows the AI to incorrectly process messages that should be skipped due to sensitivity labels.

In a message shared to affected users, Microsoft said a code issue meant emails in the sent items and draft folders were being picked up despite policies in place that meant messages with confidential labels shouldn't be read.

"We identified and addressed an issue where Microsoft 365 Copilot Chat could return content from emails labeled confidential authored by a user and stored within their Draft and Sent Items in Outlook desktop," a spokesperson told ITPro.

"This did not provide anyone access to information they weren’t already authorized to see. While our access controls and data protection policies remained intact, this behavior did not meet our intended Copilot experience, which is designed to exclude protected content from Copilot access".

The spokesperson added that a "configuration update" has been deployed for customers globally.

The issue was first spotted on 21 January, and tracked by Microsoft as CW1226324.

Microsoft Copilot Chat rules

Copilot Chat is Microsoft's tool for interacting with an AI agent directly from Word and other productivity software. It first rolled out in September.

Microsoft 365 Copilot reads through data such as emails, documents, chats, and more to help dig information out for users.

With privacy in mind, Microsoft built in administrative controls that let companies keep AI away from sensitive material — but this bug meant those rules were not applied in Sent Items and Drafts folders in email, letting Copilot access all emails for summarization despite being labelled confidential.

AI security risks

The rise of generative AI use in businesses has sparked concerns about the security risks, be it breaching confidentiality guidelines in sensitive industries, leaking private data, or offering a new attack vector via prompt injections or other hacking techniques.

Researchers have already spotted thousands of corporate secrets in one popular AI training dataset, suggesting industry is struggling to keep up with the realities of data security in the AI era.

The risk is exacerbated by shadow AI, when employees use AI chatbots or other tools without official approval or IT department support, meaning data-protection guidelines aren't in place to protect private or sensitive information.

That's already causing a huge surge in data policy violations, according to a report from Netskope, with almost a third of workers already using AI covertly at work.

There have been previous issues with Copilot. Back in 2024, academic researchers spotted security vulnerabilities in retrieval augmented generation (RAG) systems used by Microsoft Copilot that could lead to such tools committing confidentiality violations.

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