Microsoft

42 State Attorneys General issued a letter to Microsoft (along with other large technology companies) about the rise in sycophantic and delusional outputs from generative AI software. The letter highlighted that generative AI software has been involved in at least six deaths in the United States, and other incidents of domestic violence, poisoning, and hospitalizations for psychosis.

The Australian Competition and Consumer Commission (ACCC) commenced Federal Court proceedings against Microsoft for allegedly misleading approximately 2.7 million Australian customers. Since October 2024, Microsoft told subscribers they must accept Copilot integration with higher prices ($109 to $159 AUD annually) or cancel, while failing to disclose a third option: Microsoft 365 Classic plans without Copilot at the original lower price.

Following the Guardian's investigation revealing mass Palestinian surveillance via Azure, Microsoft ceased and disabled specified Israel Ministry of Defense subscriptions including cloud storage and AI services. Microsoft President Brad Smith stated 'We do not provide technology to facilitate mass surveillance of civilians.' This was the first known case of a US tech company withdrawing services from the Israeli military since the Gaza war began. However, Microsoft's wider relationship with the IDF remained intact, and Unit 8200 reportedly migrated the surveillance data to Amazon Web Services.

In September 2025, Microsoft announced a mandatory return-to-office policy requiring employees within 50 miles of offices to work onsite three days per week starting February 23, 2026. The policy was announced by Chief HR Officer Amy Coleman amid 15,000 layoffs in 2025 (6,000 in May, 9,000 in July). Engineers and critics labeled the RTO mandate a 'soft layoff tool' designed to trigger voluntary resignations without formal severance payouts. An Azure engineer stated: 'There's a growing sense that the RTO mandate isn't about collaboration. They know that if they force everyone back to the office, a certain percentage will choose to leave on their own.' Despite Microsoft's denial that the policy aims to reduce headcount, the timing alongside massive layoffs and CEO Nadella's statements about needing to move faster suggest workforce reduction through attrition.

A joint Guardian/+972 Magazine/Local Call investigation revealed Microsoft provided customized Azure cloud infrastructure to Israel's Unit 8200 intelligence unit for storing recordings of millions of daily Palestinian phone calls. By July 2025, the surveillance system held 11,500 terabytes of military data stored on Azure servers in the Netherlands and Ireland. Microsoft CEO Satya Nadella met with Unit 8200's commander in late 2021 to discuss the collaboration. Sources within Unit 8200 said the data was used to research and identify bombing targets in Gaza and to blackmail Palestinians in the West Bank.

Microsoft laid off about 6,000 employees (3% of workforce) in May 2025 and approximately 9,000 more in July 2025. CEO Satya Nadella admitted AI writes up to 30% of the company's code. Internal estimates showed Microsoft saved over $500 million in operational costs by integrating AI into customer service and sales functions. After announcing the July layoffs, investors pushed Microsoft's stock above $500 for the first time. Total cumulative layoffs since early 2024 affected approximately 17,000 employees (7.5% of global workforce).

Microsoft has contributed over $17 million to organizations advancing LGBTQ+ equity, dignity, and human rights, including $1.3 million in the last year and a $100,000 Pride 2025 donation. The company was the first Fortune 500 company to provide same-sex domestic partnership benefits in 1993 and one of the first to include sexual orientation in its corporate non-discrimination policy. The GLEAM employee resource group drives LGBTQ+ inclusion across the organization.

Microsoft terminated multiple employees who protested the company's AI technology use by the Israeli military. In April 2025, software engineers Ibtihal Aboussad and Vaniya Agrawal were fired after disrupting Microsoft's 50th anniversary event, where one called AI CEO Mustafa Suleyman a 'war profiteer.' In August 2025, four more employees (Anna Hattle, Riki Fameli, Nisreen Jaradat, Julius Shan) were fired for on-premises protests. Allegations claim Israel's Unit 8200 uses Microsoft Azure to store and analyze Palestinian phone calls for surveillance.

In February 2025, Microsoft contributed $100,000 to oppose Proposition 1A, a ballot measure to fund Seattle's social housing authority through a 5% payroll tax on companies for salaries over $1 million. Microsoft joined Amazon and other corporate donors in spending $780,000 total against the measure. Despite the corporate opposition, the measure passed with 63% voter support.

Microsoft donated $1 million to Donald Trump's 2025 presidential inauguration fund, joining other major tech companies in contributing to the incoming administration.

Microsoft laid off its internal DEI team in July 2024 citing 'changing business needs.' Subsequently, the company removed the requirement for employees to create yearly DEI-focused objectives (previously called 'DEI Core Priority') and stopped evaluating DEI contributions in annual performance reviews. Microsoft also announced it would not publish its traditional annual diversity and inclusion report for 2025.

In April 2024, Microsoft announced a commitment to equip 2.5 million people across ASEAN countries (Indonesia, Malaysia, Philippines, Thailand, Vietnam) with AI skills by 2025. The initiative includes the AI Skills Coalition with 60+ organizations, free Generative AI Professional Certificate through LinkedIn Learning, AI Skills Navigator portal, and the Generative AI Skills Grant Challenge for nonprofits. Microsoft also committed to training 1 million South Africans by 2026 and 800,000 Malaysians by 2025.

In April 2024, Microsoft announced a $1.5 billion investment in G42, an Abu Dhabi-based AI company chaired by Sheikh Tahnoon bin Zayed Al Nahyan, UAE's National Security Advisor. G42's CEO Peng Xiao previously led Pegasus, a DarkMatter subsidiary involved in surveillance operations. Microsoft VP Brad Smith joined G42's board. Congressional investigators raised concerns about G42's China ties and links to human rights abuses. The deal followed a secret agreement where G42 divested from China to satisfy U.S. security concerns.

In January 2024, Microsoft laid off 1,900 employees from its gaming division, including roles at Activision Blizzard, ZeniMax, and Xbox Game Studios. The FTC argued these cuts violated assurances Microsoft made during the acquisition review, where the company claimed the merger would be vertical (not requiring layoffs). FTC lawyer Imad Abyad cited that layoffs to address 'areas of overlap' directly undermined Microsoft's vertical acquisition claims. Former FTC Chair Lina Khan stated the acquisition 'has been followed by significant price hikes and layoffs, harming both gamers and developers.'

Microsoft completed the acquisition of Activision Blizzard on October 13, 2023, for $75.4 billion — the largest acquisition in gaming history. The FTC challenged the deal in December 2022 alleging it would suppress competition, but a federal judge rejected the FTC's preliminary injunction in July 2023, finding more consumer access to Call of Duty was likely. Microsoft secured approvals from 40+ countries, offering 10-year commitments to keep Call of Duty on PlayStation and licensing cloud gaming rights to Ubisoft for the UK CMA. The FTC dropped its challenge in May 2025.

Microsoft announced a $2.1 billion investment in a cloud datacenter region in Saudi Arabia in February 2023. Human Rights Watch and 17 other human rights organizations called on Microsoft to suspend plans, citing Saudi Arabia's surveillance laws, targeting of dissidents, and use of spyware. Microsoft refused to make its human rights assessment public and proceeded with the project, completing construction in December 2024.

Between 2019 and 2023, Microsoft invested approximately $13 billion in OpenAI across multiple rounds ($1B in 2019, ~$2B in 2021, $10B in 2023), becoming its exclusive cloud provider via Azure and gaining rights to commercialize OpenAI's models. The partnership made Microsoft the dominant platform for frontier AI deployment. By October 2025, Microsoft's stake was valued at approximately $135 billion representing ~27% on a diluted basis.

In November 2022, developers filed a class-action lawsuit against GitHub, Microsoft, and OpenAI alleging that GitHub Copilot was trained on billions of lines of publicly available code from GitHub repositories without complying with open-source license terms (GPL, MIT, etc.) requiring attribution and copyright notices. The suit sought over $9 billion in statutory damages. By May 2023, a judge dismissed 20 of 22 claims but allowed breach of contract and DMCA claims to proceed. GitHub's FAQ acknowledged that about 1% of suggestions may match training data.

In June 2022, Microsoft entered a labor neutrality agreement with the Communications Workers of America (CWA), committing not to oppose unionization efforts at Activision Blizzard. This led to CWA successfully organizing workers at Raven Software, Blizzard Albany, and other studios. Microsoft became the first major US tech company to voluntarily recognize a union at a gaming subsidiary, in contrast to industry norms of opposing unionization.

In October 2021, Microsoft became the first major U.S. tech manufacturer to commit to right-to-repair following shareholder resolution pressure from As You Sow. The company agreed to complete a third-party study on repair impacts, expand availability of parts and repair documentation beyond authorized service providers for Surface devices and Xbox consoles, and provide new mechanisms to increase consumer access to repair by the end of 2022. Microsoft subsequently shifted to neutral and supportive positions on state right-to-repair legislation in Washington (2022-2023).