Today, I am pleased to announce that Azure Local now scales to support deployments of up to thousands of servers within a single sovereign environment, allowing organizations to run much larger workloads locally across large-footprint datacenters, industrial environments and edge locations while maintaining control within their sovereign boundary.

Organizations operating national infrastructure, regulated workloads or mission-critical services are navigating a fundamental shift in how cloud infrastructure must be deployed and managed. As digital sovereignty postures evolve and regulatory requirements tighten across regions, infrastructure strategies are increasingly shaped by the need to maintain jurisdictional control over data, operations and dependencies. At the same time, AI and data-intensive applications are moving closer to where data is generated, requiring infrastructure that can scale to support larger deployment footprints while maintaining operational control, compliance and data residency requirements within sovereign environments.

Azure Local is the foundation for Microsoft’s Sovereign Private Cloud, allowing organizations to run cloud-consistent infrastructure on hardware they own and operate within their sovereign boundary. It supports deployments across connected, intermittently connected or fully disconnected environments. With Azure Local disconnected operations, customers retain the ability to apply policy enforcement, role-based access control, auditing and compliance configuration locally, allowing them control over how infrastructure is configured, secured and updated regardless of public cloud connectivity.

Scaling Sovereign Private Cloud

Sovereign Private Cloud deployments must scale to support not only larger workloads, but also the operational requirements of national infrastructure and regulated industries. Azure Local allows organizations to grow deployments from hundreds up to thousands of servers within a single sovereign boundary, allowing infrastructure to expand alongside demand without requiring architectural redesign.

As deployment footprints grow, resiliency becomes essential to maintaining continuous operations for mission critical services. Expanded fault domains and infrastructure pools help prevent hardware failures from resulting in service outages, ensuring critical workloads remain operational across environments with varying levels of cloud connectivity.

At these larger scale points, organizations can run data-intensive AI inference and analytics workloads entirely within their own environment. With support for high-performance graphics processing unit (GPU) infrastructure, sensitive models and operational data remain within customer-controlled infrastructure, while access management, auditing and compliance controls are maintained within the sovereign deployment.

Built for challenging workloads 

Increased deployment scale unlocks new workload placement opportunities, from large sovereign private cloud deployments to distributed AI workloads, allowing organizations to run more data intensive and latency sensitive applications entirely within their sovereign boundary.

AT&T, one of the world’s largest telecommunications operators, is deploying Azure Local to run mission-critical infrastructure on hardware they own in their environment. The goal: full operational control while running at the scale the business demands.

“Azure Local provides the infrastructure foundation we need to run critical operations at scale, while ensuring control and governance across our environment. The consistency of the Azure operating model, delivered on our own infrastructure, is key as we continue to modernize while delivering reliable services to our customers.”

— Sherry McCaughan, Vice President – Mobility Core Services, AT&T

Kadaster, the Netherlands’ official land registry and mapping agency, is running Azure Local to keep sovereign control over some of the country’s most sensitive public data.

“As a government agency responsible for some of the Netherlands’ most sensitive data, we need infrastructure that gives us full control over where our data lives and how it’s governed. Azure Local has been a consistent foundation for that — and as our workloads grow in scale and complexity, the platform has grown with us.”

— Maarten van der Tol, General Manager, Kadaster

FiberCop, Italy’s most advanced and extensive digital network operator is deploying Azure Local across its edge locations to bring sovereign cloud and AI services to organizations throughout the country. Fabio Veronese, Chief Information & Technology Officer commented:

“FiberCop is better positioned than any other player on the Italian market to drive innovation and deliver cloud as well as AI services at national scale. Azure Local supports our mission to drive Italy’s digital future and brings Microsoft’s cloud capabilities to edge workloads across the country while keeping data sovereignty and compliance where they matter most.”

The infrastructure behind Sovereign Private Cloud

Azure Local is available today with validated compute and enterprise storage platforms from partners including DataON, Dell Technologies, Everpure, Hitachi Vantara, HPE, Lenovo and NetApp, allowing organizations to integrate existing Storage Area Networks (SAN) and preserve prior investments while allowing compute and storage resources to scale independently within their sovereign environment.

At the silicon level, Intel®  Xeon® 6 processors provide the compute foundation for the platform. Built for the density and performance demands of modern enterprise workloads, Xeon 6 also brings built-in AI acceleration with Intel® AMX, meaning organizations running inference or generative AI workloads within their sovereign environment do not need to introduce separate, specialized infrastructure to do so.

Together, Azure Local, validated compute and enterprise storage platforms, accelerated computing platforms and underlying silicon can provide a datacenter-scale stack that supports sovereign infrastructure deployments while helping ensure data, models and execution remain within customer-controlled environments.

Sovereign infrastructure built for your requirements

Azure Local was built to meet customers where their requirements are whether that means strict data residency, disconnected operations, regulated workloads or AI running close to where data is generated. As these requirements evolve across regulated industries and governments worldwide, Sovereign Private Cloud deployments can expand from a single node at the edge to large enterprise-scale datacenter environments, running on hardware organizations own and operate, with consistent lifecycle management through Azure.

Resources:

• Learn more about Azure Local
• Explore Microsoft’s Sovereign Cloud
• Read the Tech Community blog
• Visit the Azure Local solution catalog

Douglas Phillips leads global engineering efforts for Microsoft’s specialized, sovereign and private clouds. He is responsible for Microsoft’s global strategy, products and operations that bring Microsoft’s industry-leading solutions, including Azure, our adaptive cloud portfolio and Microsoft 365 collaboration suite, to customers with additional sovereignty, security, edge and compliance requirements.

The post Microsoft Sovereign Private Cloud scales to thousands of nodes with Azure Local appeared first on The Official Microsoft Blog.

Amended Agreement Provides Long-Term Clarity

The rapid pace of innovation requires us to continue to evolve our partnership to benefit our customers and both companies. Today, we are announcing an amended agreement to simplify our partnership and the way we work together, grounded in flexibility, certainty and a focus on delivering the benefits of AI broadly. The greater predictability in the amended agreement strengthens our joint ability to build and operate AI platforms at scale while providing both companies the flexibility to pursue new opportunities. The agreement spells out:

• Microsoft remains OpenAI’s primary cloud partner, and OpenAI products will ship first on Azure, unless Microsoft cannot and chooses not to support the necessary capabilities. OpenAI can now serve all its products to customers across any cloud provider.
• Microsoft will continue to have a license to OpenAI IP for models and products through 2032. Microsoft’s license will now be non-exclusive.
• Microsoft will no longer pay a revenue share to OpenAI.
• Revenue share payments from OpenAI to Microsoft continue through 2030, independent of OpenAI’s technology progress, at the same percentage but subject to a total cap.
• Microsoft continues to participate directly in OpenAI’s growth as a major shareholder.

While this amendment simplifies the partnership, the work we’re doing together remains ambitious. From scaling gigawatts of new datacenter capacity, to collaborating on next-generation silicon, to applying AI to advance cybersecurity, and more, we’re excited to keep partnering to advance and scale AI for people and organizations around the world.

The post The next phase of the Microsoft-OpenAI partnership appeared first on The Official Microsoft Blog.

AI has moved quickly from experimentation to production. Customers want measurable business outcomes, along with security, governance and responsible AI built in from day one. Microsoft partners are a meaningful differentiator to deliver these objectives. They turn ideas into deployable solutions by prioritizing the highest value use cases, building the right data and security foundations and establishing adoption and measurement capabilities so customers can run AI reliably in production.

Frontier Transformation is where AI becomes a repeatable, governed capability embedded into the flow of work, business processes and customer engagement. Customers are quickly moving from targeted pilots to operating AI at scale with a foundation built upon identity, data protection, compliance, monitoring and change management. As organizations expand from custom agents to agent-led processes, unified governance is essential so leaders can manage risk, track performance and scale with confidence.

Two essentials: Intelligence and Trust

Frontier Transformation depends on two essential elements: intelligence and trust. Customers want solutions grounded in their unique work intelligence, including their data, business context and operational realities. They also expect trust by design, with AI artifacts observable, managed and secured across the technology stack so they can deploy responsibly and scale with confidence.

A success framework for Frontier Transformation

Microsoft has developed a powerful framework for success as partners enable AI transformation for customers across all segments, industries and geographies:

1. Enriching employee experiences: enabling businesses to empower employees with world-class tools and capabilities to activate a thriving, productive workforce
2. Reinventing customer engagement: applying AI and agentic solutions to break through with customers, accelerate revenue growth, become more efficient at customer acquisition and deliver more personalized solutions
3. Reshaping business processes: redesigning workflows across the business, enhanced by AI and agentic capability
4. Bending the curve on innovation: AI acceleration is a powerful catalyst for business transformation and for addressing society’s biggest challenges — curing disease, addressing climate change and famine and other meaningful advancements

The “what” matters, and so does the “how.” Organizations that scale successfully put AI where people already work, enable innovation close to the business challenge and build observability at every layer so leaders can measure quality, govern risk and manage AI like a production system.

More than 90% of the Fortune 500 use Microsoft 365 Copilot, reflecting how quickly AI is becoming part of everyday work.(1) IDC predicts 1.3 billion agents in circulation by 2028(2) and 80% of the Fortune 500 are already using Microsoft agents, led by operationally complex industries like manufacturing, financial services and retail.(3) As customers move from piloting AI to agents embedded in their flow of work, governance and security need to scale with them.

Microsoft’s approach is straightforward: Copilot drives action in the flow of work, agents orchestrate workflows across systems and Microsoft Agent 365 provides a unified control plane designed to govern and secure agents at scale, with the same tools businesses use for employee administration, such as Microsoft admin center, Defender, Entra and Purview.

Partners are creating impact right now in three areas. First, agentic workflows that remove operational friction and orchestrate end-to-end work across operations, finance, supply chain and service. Second, Customer Zero maturity. Partners who adopt Copilot and agents internally build credibility and move faster because they have meaningful, real-world experiences that they translate into their go-to-market plans. Third, security as the foundation. There is no AI at scale without secure identity, protected data and strong governance.

Microsoft 365 E7 and Agent 365: The Frontier Suite

In March, Microsoft introduced Wave 3 of Microsoft 365 Copilot and announced Microsoft 365 E7: The Frontier Suite, with general availability of Microsoft 365 E7 and Microsoft Agent 365 on May 1, 2026.

Microsoft 365 E7 brings together Microsoft 365 E5 for secure productivity, Entra Suite for identity and access control, Microsoft 365 Copilot for AI in the flow of work and Agent 365 as the control plane to govern and scale agents. It is grounded in shared intelligence from Work IQ, the layer that brings together signals from the Microsoft 365 environment, including content, context and activity, so AI can operate with the right business grounding and policy awareness.

Microsoft Agent 365 provides a unified control plane for agents, enabling IT, security and business teams to observe, govern and secure agents across the organization. This applies to any agents an organization uses, whether they are built on Microsoft AI platforms, delivered by ecosystem partners or introduced through other technology stacks. It also applies the same security and compliance capabilities teams already rely on, including Microsoft Defender, Microsoft Entra and Microsoft Purview.

Some customer scenarios require custom agents. Microsoft Agent Factory is designed to accelerate the move from experimentation to execution. The Microsoft Agent Factory Pre-purchase Plan (P3) adds licensing flexibility across Copilot Studio, Microsoft Foundry, Fabric and GitHub, with tiered discounts intended to support broader adoption rather than isolated pilots. It also enables inclusion of tailored, role-based skilling at no additional cost to the customer, reducing adoption friction and increasing delivered value.

The opportunity for partners is end-to-end, and this is where the partner’s strategy really matters. Shifting from transaction-first to outcome-first, partners who iterate quickly, establish clear guardrails and build an operating rhythm for adoption move customers from interest to impact.

Over time, every organization will employ people who can direct and govern agents as part of daily work. Partners can make that capability real through packaged offers, change management and managed operations. Publishing those packaged offers in the Microsoft Marketplace adds a scalable route to market, improving discoverability and enabling a more repeatable buy-and-deploy motion as customers expand agent usage.

Partner success: What governed scale looks like in practice

“AI is at the forefront of everything we do. Through our ‘learn, use, create’ methodology and our AI Academy, we really support partners with learning paths.”
— Nicole Clark, Global Alliance Manager, Arrow Electronics

Partners are embracing Frontier Transformation by modernizing foundations, driving adoption, designing security into delivery and building agents that automate repeatable work and orchestrate business processes.

• Cognizant treated legacy automation as a platform modernization effort. Using Microsoft Power Platform, Copilot agents and governance frameworks, Cognizant migrated and modernized automation and scaled it across teams, consolidating platforms, lowering costs and reducing manual work through agent-led workflows.
• EPAM’s work with their customer Albert Heijn demonstrates what agent-first execution looks like in frontline scenarios. By delivering an employee-facing virtual assistant inside the retailer’s staff app, EPAM supported scenarios like restocking, onboarding and faster access to product and inventory information, with enterprise governance and observability in mind.
• Insight’s Flight Academy shows what it looks like to treat adoption as a program, not an announcement. Through a structured approach, Insight enables teams to build AI fluency in daily work and reinforces usage with practical learning and internal momentum that can scale beyond early enthusiasts.
• aCloud demonstrated a repeatable security pattern with their customer Jurong Engineering Limited (JEL) by bringing together Microsoft Purview, Microsoft Sentinel, Microsoft Defender XDR and Microsoft Security Copilot, paired with co-design workshops and cross-team alignment to strengthen compliance readiness.
• Arrow Electronics showed how distributor-led enablement can accelerate partner execution by using ArrowSphere to streamline Cloud Solution Provider (CSP) lifecycle management and ArrowSphere Assistant to surface AI-driven insights for renewals, upsell opportunities and Copilot adoption, complemented by a security dashboard that strengthens posture visibility and supports trust-by-design conversations.

Find more stories of partners innovating and driving meaningful outcomes for customers with Microsoft technology.

This same disciplined approach is especially relevant in the small and medium business space (SMB), where Microsoft partners offer end-to-end capability through managed services offerings and solutions packaged into repeatable motions, tailored to this customer segment.

SMB momentum: Scaling work with Copilots and agents

As Microsoft 365 Copilot Business expands AI built for work to organizations with fewer than 300 users, SMBs have a practical path to adopt AI more broadly. CSP partners are well positioned to guide that journey with a motion that combines adoption, security and ongoing management.

New Omdia research illustrates that CSP is a durable growth model for partners. In a study of 267 CSP partners across 36 countries, 79% rated CSP authorization as good, very good or excellent, and 88% would recommend it to other partners.(4) Omdia also found that 60% of CSP partner revenue is now tied to value-added services, with licensing acting as the entry point to broader, services-led engagements.(6)

“We’re bringing customers resources that only a partner can deliver to them: our relationship with Microsoft, technical training and programs that push them further and faster to learn technologies like Microsoft Copilot Studio, Foundry and Fabric.”
— Chance Weaver, Global VP of AI Adoption, Pax8

SMB demand is also expanding. For CSP partners, the near-term opportunity is to standardize advancing Copilot and agents from conversation to consumption. Lead with a simple, repeatable motion: outcome selection, security baseline, deployment, adoption and optimization cadence. Renewal moments are often the easiest time to introduce change when paired with a clear business case and time-bound offers.

A simple, scalable approach is to roll out in stages:

1. Deploy Microsoft 365 Copilot Business broadly, paired with a strong foundation of identity, data protection and compliance.
2. Target high-propensity accounts with tools such as Microsoft CloudAscent and the AI Business Solutions & Security Insights dashboard to deepen adoption and standardize responsible prompting.
3. Extend with agents to take on repeatable tasks and support key business processes, with governance and security built in.

Microsoft provides CSP partners with a powerful set of tools to combine licensing, lifecycle management and optimization into one customer relationship. Omdia notes that partners value operational advantages such as monthly billing flexibility and managing licenses through Partner Center for real-time provisioning and 24/7 license management. Partners can review the CSP incentives guide to understand the latest CSP incentives and how they map to an SMB motion.

Microsoft supports SMB-focused partners by combining product, security and go-to-market resources that make it easy to deliver a repeatable motion. That includes tools to assess readiness, prioritize the right use cases and track adoption over time, plus role-based skilling to build sales and technical and delivery confidence across Copilot, security and agents. For partners building managed services offerings, Microsoft Marketplace also provides a scalable route to market, improving discoverability and enabling customers to buy through familiar procurement paths, while Partner Center brings licensing and lifecycle management into the same operational flow.

Program momentum and updates

The Microsoft AI Cloud Partner Program continues to be the primary way we invest in partners as they build, sell and deliver cloud and AI solutions. Our focus is simple: enable partners to build capability, accelerate demand, differentiate in the market and scale repeatable delivery.

In February 2026, Microsoft introduced a wealth of expanded benefits updates across Copilot, security, Azure credits and go-to-market resources. These updates are designed to strengthen how partners run their business and accelerate the ability to take solutions to market. We continue to evolve partner benefits packages as a practical growth lever, combining product, support and advisory benefits so partners can invest with confidence.

To enable AI Transformation, Microsoft is introducing program updates and offers in the coming months. These updates are intended to enable partners, including services partners, channel partners and software companies, to build and deliver agents across the Frontier product stack. 

• Differentiation via Frontier Partner specialization: The Frontier Badge is evolving into a Frontier Partner specialization. This specialization differentiates partners, including services partners and channel partners, who demonstrate capabilities to build or deliver agents across Microsoft’s Frontier product stack. It creates a clear way for customers and Microsoft field sales teams to identify partners with validated readiness for agentic AI scenarios.
• Updated Frontier Distributor designation: Microsoft is evolving the Frontier Distributor designation to reflect distributor capabilities that matter for scaling agentic AI across the channel. For partners, this will make it easier to identify distributors that can deliver repeatable skilling, enablement to build and manage agents and Marketplace-backed motions to transact and grow agent sales.
• Benefits for software companies building AI apps and agents via App Accelerate: App Accelerate supports software companies building AI apps and agents on the Microsoft agent stack, with benefits designed to bring agentic solutions to market with strong foundations for trust.

Investments in skilling

This year we are investing in partner skilling that connects certification readiness to project-ready execution, with role-based experiences like Project Ready Workshops that translate skills into repeatable delivery practices. These learning experiences are delivered through our Partner Skilling Hub.

We are also introducing the Frontier Engineer Badge, a new learning path delivered through Titan Academy that prepares Solution Engineers and Solution Architects within the partners’ organization to design, build and operate production-ready agentic AI solutions across the Frontier Transformation stack, including Microsoft Copilot, Copilot Studio, Azure AI Foundry, GitHub Copilot, Microsoft Fabric and Agent 365.

The journey is hands-on by design and follows a three-part model: earn required certifications to establish a shared technical baseline, demonstrate delivery capability through Project Ready (building and integrating agents with governance, security and compliance) and build advanced readiness for operating at scale through governance, velocity and industry solution patterns. The outcome is clear: delivery-ready engineers who can move customers from prototypes to trusted, governed deployments.

Capturing the Marketplace opportunity

Marketplaces matter more in 2026 as customers consolidate procurement and expect faster time to value, especially as AI moves from pilots to production. With over 5,000 AI solutions available, Microsoft Marketplace increases discoverability for partner-built AI solutions, including agents, and supports a more repeatable buy-and-deploy motion through familiar procurement. It also makes it easy for partners to package multiparty software and services offers, so customers can purchase what they need to implement, govern and scale AI in production.

Omdia projects Microsoft Marketplace as a nearly $300 billion partner services opportunity by 2030. In the same study, partners selling through Marketplace reported go-to-market benefits, including faster sales cycles and larger deals, with 75% of study participants reporting faster closes and 69% reporting larger deals through Microsoft Marketplace.(5)

To accelerate demand generation and make it easy to activate these motions, we recently introduced Partner Marketing Center Pro, an AI-powered experience for end-to-end campaign creation. It brings campaign discovery, customization and co-branding, intelligent localization and translation, automated publishing and built-in reporting into one workflow, with an AI assistant that provides coaching throughout the process.

Partner Marketing Center Pro is a benefit of the Microsoft AI Cloud Partner Program available to partners who have purchased at least one partner benefits package, who have attained a Solutions Partner designation or who are currently enrolled in ISV Success.

Ways to engage now

Here are a few practical next steps partners can take to maximize their Microsoft investment:

Start by joining the Microsoft AI Cloud Partner Program.

• Plan to attend our annual sales kickoff for partners, virtually on Wednesday, July 22, 2026, to learn more about FY27 priorities and execution motions.
• Explore partner benefits packages and select the option that aligns to their growth plan.
• Pursue a Solutions Partner designation or specialization that matches their solution plays and customer demand.
• Visit the Partner Skilling Hub to find role-based learning resources.
• Launch an FY26 campaign focused on SMB, security, Copilot adoption or marketplace growth using Partner Marketing Center Pro.

Making Frontier Transformation real

Frontier Transformation is about building AI-powered operating capability grounded in intelligence and trust, and delivered consistently across industries, geographies and market segments. Partners make that real for customers by turning strategy into production-ready solutions, with governance, security and adoption built in from day one.

Microsoft is committed to partner success. We will continue investing in the Microsoft AI Cloud Partner Program, with the incentives, the skilling and the go-to-market capabilities that enable partners to build repeatable offers, increase discoverability and deliver trusted AI outcomes for customers at scale.

Nicole Dezen leads the Microsoft partner ecosystem and the Global Channel Partner Sales organization in Small, Medium Enterprises and Channel (SME&C). As Chief Partner Officer, she has grown the Microsoft partner ecosystem to become the largest in the industry, enabling more than 500,000 partners to deliver AI transformation to millions of customers in each segment around the world.

 

Footnotes

¹ Microsoft FY25 Third Quarter Earnings Conference Call, Microsoft, April 2025.
² IDC Info Snapshot, sponsored by Microsoft, 1.3 Billion AI Agents by 2028, #US53361825, May 2025.
³ Based on Microsoft first party telemetry measuring agents built with Microsoft Copilot Studio or Microsoft Agent Builder that were in use during the last 28 days of November 2025.
⁴ Omdia, Unlocking Growth Potential: Partner Perspectives on Microsoft CSP, December 2025. Results are not an endorsement of Microsoft. Any reliance on these results is at the third party’s own risk.
⁵ Microsoft estimate based on IDC data (SMB TAM: $777B by FY26; $1T+ by 2030), as published on the Microsoft Partner Blog, “The Microsoft Marketplace opportunity for channel ecosystem,” November 20, 2025.
⁶ Omdia, Partner Ecosystem Multiplier – The Microsoft Marketplace Opportunity, commissioned research sponsored by Microsoft, December 2025. Results are not an endorsement of Microsoft. Any reliance on these results is at the third party’s own risk.

Throughout this document, $ refers to USD.

 

 

 

 

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Today is the day. Open to Work: How to Get Ahead in the Age of AI is officially available!

At a time when technology dominates the headlines, the conversation I see most often on LinkedIn is deeply human: what does AI mean for my job and my career?

And that makes sense. Careers once felt more predictable. Titles defined what you did. Progress looked like a ladder. That model has been evolving for years, but AI is accelerating the shift.

The most important truth about this moment is that the outcome isn’t written yet. The new world of work is being assembled right now, task by task, policy by policy, business by business. It will reflect the choices of the people who show up to build it.

That’s why Aneesh Raman and I wrote this book.

Open to Work is a practical guide informed by what we see across the global labor market and insight into the tools millions of people use every day. It’s for every person asking what comes next for their job, their career, their company or their community.

With help from experts and everyday LinkedIn members, it shows you how to engage with AI before you have to, how to adapt by focusing on what you can control and how to become irreplaceable by leaning into what makes you uniquely you.

And those ideas don’t just apply to individuals, they guide how we as Microsoft and LinkedIn are building for this moment. At the intersection of how work gets done and how careers get built, our shared goal is to connect people to opportunity and turn the tools they use every day into a canvas for human and AI collaboration at scale. Done right, that’s how AI expands opportunity and helps people build confidence and momentum in their careers.

We’ve always believed technology should serve people. AI should help humans. Not the other way around. That doesn’t happen by accident. It happens when we all decide to make it true.

If you want to go deeper on Open to Work, listen to my conversation with Microsoft President and Vice Chair Brad Smith on his Tools and Weapons podcast.

Open to Work is available now at linkedin.com/opentowork.

Ryan Roslansky is the CEO of LinkedIn and Executive Vice President of Microsoft Office, where he leads engineering for products like Word, Excel, PowerPoint and Copilot. Through these roles, Ryan is shaping where work goes next to unleash greater economic opportunity for the global workforce.

The post Open to Work: How to Get Ahead in the Age of AI appeared first on The Official Microsoft Blog.

Satya Nadella, Chairman and CEO, and Mustafa Suleyman, Executive Vice President and CEO of Microsoft AI, shared the below communications with Microsoft employees this morning.

SATYA NADELLA MESSAGE

I want to share two org changes we’re making to our Copilot org and superintelligence effort.

It’s clear a new era of productivity is emerging as AI experiences rapidly evolve from answering questions and suggesting code, to executing multi-step tasks with clear user control points. You see this in our announcements over the last couple of weeks, like Copilot Tasks and Copilot Cowork, agentic capabilities in Office, and Agent 365. As these experiences connect more naturally across agents, apps, and workflows, we have an opportunity to help customers spend more time on higher-value work and reduce manual coordination, while providing people with more agency and empowerment and organizations with the governance and security controls they need.

To that end, we are bringing the Copilot system across commercial and consumer together as one unified effort. This will span four connected pillars: Copilot experience, Copilot platform, Microsoft 365 apps, and AI models. This is how we move from a collection of great products to a truly integrated system, one that is simpler and more powerful for customers.

Jacob Andreou will lead the Copilot experience across consumer and commercial, driving design, product, growth, and engineering, as EVP, Copilot, reporting to me. As CVP of Product and Growth at Microsoft AI, Jacob has accelerated our user-focused AI-first product making and growth framework. Prior to that, he was SVP at Snap, where he helped scale the company from its early days.

Progress at the AI model layer is more critical than ever to our success as a company over the next decade and is foundational to everything we build above it. We are doubling down on our superintelligence mission with the talent and compute to build models that have real product impact, in terms of evals, COGS reduction, as well as advancing the frontier when it comes to meeting enterprise needs and achieving the next set of research breakthroughs. Mustafa Suleyman and I have been working towards this plan for some time, and he will continue to lead this high ambition work, reporting to me. Mustafa is uniquely qualified to drive this forward, with his deep focus and commitment to advancing the frontiers of model science, while also ensuring that human control, agency, and economic opportunity remain at the center of these advancements.

Ryan Roslansky, Perry Clarke, and Charles Lamanna will lead M365 apps and the Copilot platform. Together, Jacob, Ryan, Charles, Perry, and Mustafa make up the Copilot LT and over the next few weeks they’ll work to align the teams.

Our org boundaries will simply reflect system architecture and product shape such that we can deliver more coherent and competitive experiences that continue to evolve with model capabilities. And I am looking forward to how together we apply all of this to empower people, organizations, and the world.

MUSTAFA SULEYMAN MESSAGE

Subject: A new structure for Microsoft AI

Technology and the future of our industry will be defined by two things: frontier models, and the products through which they are experienced. For some time, I’ve been thinking about how we best tackle these huge challenges, and today I’m excited to be evolving our structure at Microsoft AI, ensuring we’re positioned to succeed in both.

I came to Microsoft with an overriding mission: to create Superintelligence that delivers a transformative, positive impact for millions of people. This requires us to build frontier models, at scale, pushing the boundaries of what’s possible. Everything else follows from this. It’s the foundation for our future as a company. With our ambitious, long-term frontier scale compute roadmap locked, we now have everything we need to build truly SOTA models.

As you will have just heard from Satya, the next phase of this plan is to restructure our organization to enable me to focus all my energy on our Superintelligence efforts and be able to deliver world class models for Microsoft over the next 5 years. These models will enable us to build enterprise tuned lineages that help improve all our products across the company. They’ll also enable us to deliver the COGS efficiencies necessary to be able to serve AI workloads at the immense scale required in the coming years. Achieving all this will be a huge challenge, and I’m committing everything we have – and I have personally – to make it happen.

To that end, I’ve been working hard with other leaders in the background for a while now to define a strategy to unify Copilot by bringing together the Consumer and Commercial efforts as one. We all know this makes sense. Every user – whether at home or at work – will be able to enjoy the full benefit of what we are all building. Today, we’re combining these organizations into a single, unified Copilot org. Jacob has demonstrated himself to be an outstanding leader for the product experience and clearly has the product instincts, the operational range, and the conviction to make Copilot a great success.

Jacob will retain a dotted line to me, and I’ll stay directly involved in much of the day-to-day operation of MAI, attending Meetups, MMMs, LT, and supporting Jacob to drive all areas of product strategy. To ensure that the models we build and the products we ship are mutually reinforcing, we are establishing a Copilot Leadership Team that includes me, Jacob, Charles Lamanna, Perry Clarke, and Ryan Roslansky. This will enable us to focus our brand strategy, our product roadmap, our models and our core infrastructure as one to deliver the best experiences possible for all our users.

Thank you for everything you’ve done over the last few years. I know how hard everyone has been pushing and the sacrifices many of you have made to help the company adapt to this new era.

We really do have an incredible opportunity to redefine Microsoft for this agentic revolution.

Mustafa’s mail has been edited slightly for external use.

The post Announcing Copilot leadership update appeared first on The Official Microsoft Blog.

Microsoft combines accelerated computing with cloud scale engineering to bring advanced AI capabilities to our customers. For years, we’ve worked with NVIDIA to integrate hardware, software and infrastructure to power many of today’s most important AI breakthroughs.

What’s new at NVIDIA GTC

• Expanded Microsoft Foundry capabilities to build, deploy and operate production-ready AI agents on NVIDIA accelerators and open NVIDIA Nemotron models
• New Azure AI infrastructure optimized for inference-heavy, reasoning-based workloads, including the first hyperscale cloud to power on next-generation NVIDIA Vera Rubin NVL72 systems
• Deeper integration across Microsoft Foundry, Microsoft Fabric and NVIDIA Omniverse libraries and open frameworks to support Physical AI systems from simulation to real‑world operations

From Frontier models to production-ready agents

At the foundation of this system is Microsoft Foundry: serving as the operating system for building, deploying and operating AI at enterprise scale. Foundry builds on Azure to bring together models, tools, data and observability into a single system designed for production agents. Today we’re expanding those capabilities across Foundry Agent Service and NVIDIA Nemotron models.

The next-generation Foundry Agent Service and Observability in Foundry Control Plane are now generally available, enabling organizations to build and operate AI agents at production scale. Foundry Agent Service allows teams to quickly develop agents that reason, plan and act across tools, data and workflows. Once created, Foundry Control Plane provides the developer end-to-end visibility into agent behavior, unlocking both developer productivity as well as enterprise trust. Companies such as Corvus Energy are already using Foundry to replace manual inspection workflows with agent-driven operational intelligence across their global fleet.

We are further simplifying the path from prototype to production with the availability of Voice Live API integration with Foundry Agent Service, in public preview, which enables developers to build voice-first, multimodal, real-time agentic experiences. This pairs with the general availability of a refreshed Microsoft Foundry portal and expanded integrations for Palo Alto Networks’ Prisma AIRS and Zenity, delivering deeper builder experiences and runtime security across the entire agent lifecycle.

NVIDIA Nemotron models are also now available through Microsoft Foundry, joining the widest selection of models on any cloud, including the latest reasoning, frontier and open models. This bolsters our recent partnership announcement bringing Fireworks AI to Microsoft Foundry, enabling customers to fine-tune open-weight models like NVIDIA Nemotron into low-latency assets that can be distributed to the edge.

Scaling AI infrastructure for the world’s most demanding workloads

Inference AI workloads are reshaping cost, performance and system design requirements. To operationalize agentic AI at scale, customers need purpose-built infrastructure for inference‑heavy, reasoning‑based workloads that can be deployed and operated consistently across global and regulated environments.

Microsoft’s AI infrastructure approach is engineered to seamlessly bring next-generation NVIDIA systems into Azure datacenters that are designed for power, cooling networking and rapid generational upgrades. This allows our customers to move with speed and agility and stay at the leading edge from generation to generation.

In less than a year, we’ve deployed hundreds of thousands of liquid-cooled Grace Blackwell GPUs across our global datacenter footprint, and now we are excited to be the first hyperscale cloud to power on NVIDIA’s newest Vera Rubin NVL72 in our labs. Over the next few months, Vera Rubin NVL72 will be rolled out into our modern, liquid-cooled Azure datacenters.

Microsoft’s infrastructure innovation with NVIDIA also extends to sovereign and regulated environments to give customers control of both where AI runs and how it evolves over time. Recently, we announced Foundry Local support for modern infrastructure and large AI models, and today we now have initial support for NVIDIA Vera Rubin platform on Azure Local, extending accelerated AI capabilities to customer-controlled environments. This approach allows organizations to plan for next-generation AI workloads, including reasoning-based and agentic systems, while maintaining Azure-consistent operations, governance and security through our unified software layer with Azure Arc and Foundry Local.

Bringing AI into the physical world

As AI moves beyond digital experiences, Microsoft and NVIDIA are collaborating to support the next wave of Physical AI. At GTC, this work centers on NVIDIA Physical AI Data Factory Blueprint, with Microsoft Foundry as the platform for hosting and operating Physical AI systems on Azure at cloud scale.

By integrating this blueprint with Azure services as part of a Physical AI Toolchain, Microsoft enables developers to build, train and operate physical AI and robotics workflows that connect physical assets, simulation and cloud training environments into repeatable, enterprise-grade pipelines. To support, we are introducing a public Azure Physical AI Toolchain GitHub repository integrated with the Nvidia Physical AI Data Factory and with core Azure services.

To further the impact of AI in real‑world, physical environments, today Microsoft and NVIDIA are deepening the integration between Microsoft Fabric and NVIDIA Omniverse libraries, connecting live operational data with physically accurate digital twins and simulation. This allows organizations to see what’s happening across their physical systems, understand it in real time and use AI to decide what to do next. In practice, customers in manufacturing and operations and beyond are using this approach to move beyond dashboards and alerts to coordinated, AI‑driven action across machines, facilities and workflows.

From innovation to impact

Microsoft is delivering reliable, production‑scale AI by bringing together its global AI infrastructure, platforms and real‑world systems with the latest innovation from NVIDIA. For customers, this means the ability to operate intelligence continuously, running inference-heavy, reasoning-based and physical AI workloads with the performance, security and governance required for real businesses and regulated industries.

Whether powering always-on agents, scaling next-generation AI infrastructure or deploying intelligent systems in factories, energy facilities and sovereign environments, Microsoft and Nvidia are helping customers move faster from insight to action.

Yina Arenas leads product strategy and execution for Microsoft Foundry, overseeing the end–to–end AI product portfolio, infrastructure, developer experiences and foundation model integration across OpenAI, Anthropic, Mistral, DeepSeek and others. She delivers an enterprise ready, production grade AI platform trusted by global customers for secure, reliable and scalable AI.

The post Microsoft at NVIDIA GTC: New solutions for Microsoft Foundry, Azure AI infrastructure and Physical AI appeared first on The Official Microsoft Blog.

Rajesh Jha, Executive Vice President, Experiences + Devices, and Satya Nadella, Chairman and CEO, shared the below communications with Microsoft employees this morning.

RAJESH JHA MESSAGE 

Subject: Organizing for the future and my transition

Dear Team,

After 35+ years at Microsoft, I am moving into retirement. I will transition out on July 1st and then stay in an advisory role.

Satya and I have been working on succession for some time. I am incredibly confident and excited about the future with Perry Clarke, Charles Lamanna, Pavan Davuluri, and Ryan Roslansky as EVP direct reports to Satya.

I am also excited to announce the promotions of Jeff Teper to EVP, and Sumit Chauhan and Kirk Koenigsbauer to President.

Please join me in congratulating these leaders on this well-deserved recognition.

We’re announcing these top-level changes today, and between now and June, my leadership team and I will work together to finalize the full cascade of details needed in this kind of transition. This includes aligning operating rhythms, decision ownership, and details on the future org structure, all so we’ll be fully aligned and ready to run at the start of FY27. Our intent in taking this approach is to minimize changes and not lose the great momentum we have.

Our priorities around SFI, QEI, and Copilot remain unchanged – let’s keep the intensity here.

I want to add that working with you all over the years, in the service of customers, has been an incredible privilege for me. I am deeply grateful.

Best regards,

Rajesh

SATYA NADELLA MESSAGE

Rajesh has been a constant throughout my entire life at Microsoft. From our earliest days working together, I have admired his unwavering commitment to his team, to our customers, to the products we build, and to the company. I have always been struck by his operational rigor, his ability to make the hard strategic calls, lead through the grind, and emerge stronger on the other side. That, to me, is what true leadership looks like.

When I think about the pantheon of leaders who have truly shaped this company, Rajesh stands firmly among them. He embodies the commitment that helped build and transform Microsoft into the company it is today, and it is on the strength of that foundation that we will continue to move forward. 

And as we look to the future, the opportunity ahead is expansive. We have the depth of talent, the product ethos, and a clear sense of purpose as a company to ensure our technology advancements accrue to our mission of empowerment.

Rajesh – I am deeply grateful for all you have done for Microsoft and our customers and for all you have taught me personally. On behalf of all of us – Thank You.

Satya

 

The post Microsoft announces Experiences + Devices leadership changes appeared first on The Official Microsoft Blog.

Today Microsoft is announcing:

• Wave 3 of Microsoft 365 Copilot
• Expanded model diversity with Claude and next-gen OpenAI models available today
• General availability of Agent 365 on May 1 for $15 per user
• General availability of the new Microsoft 365 E7: The Frontier Suite on May 1 for $99 per user¹

Frontier Transformation is a holistic reimagining of business, aligning AI with human ambition to achieve an organization’s highest aspirations. It is the next evolution of AI Transformation — not only do we need to deliver efficiency and productivity, but we need to democratize intelligence and do more for humanity. Companies do not want or need more AI experimentation. They need AI that delivers real business outcomes and growth.

In my daily conversations with customers and partners, they typically question what the most important components of an AI solution are. Is it the model? Is it silicon? At Microsoft, we believe the two most essential elements of Frontier Transformation are Intelligence + Trust. Organizations need to harness their own unique work intelligence as they build agents and solutions and all AI artifacts across their technology stack must be observed, managed and secured to ensure they are delivering value responsibly. 

Intelligence that shows up in real work 

I often say that zero-shot artifact creation is nothing more than a parlor trick. Models can reason over data, produce draft documents, presentations and spreadsheets, but they do not understand work. Real differentiation comes from intelligence — deep work context, embedded in the tools people already use. AI should amplify your intelligence but do so in a manner that protects your differentiation and unique value.

Work IQ amplifies an individual’s IQ by tapping into your organization’s IQ. It is the intelligence layer that enables Microsoft 365 Copilot and agents to know how you work, with whom you work and the content upon which you collaborate. That is why Copilot is faster, more accurate and more trusted than solutions built on models and connectors alone.

This month, we are unleashing Work IQ with our next generation of agentic experiences in Wave 3 of Microsoft 365 Copilot in Word, Excel, PowerPoint and Outlook. Employees will have an enhanced chat experience in Copilot with the ability to create and augment artifacts, and the power to build their own agents within the canvas they work in every day.

Microsoft 365 Copilot is model diverse by design. Rather than betting on a single model, we built a system that makes every model useful at work. Customers get the choice, performance and flexibility in an open, heterogenous environment.  Copilot leverages leading models from OpenAI and Anthropic, operating openly across clouds and data services without locking customers in. Claude is now available in mainline chat in Copilot via the Frontier program, alongside the latest generation of OpenAI models.

Microsoft 365 Copilot Wave 3 is not just a singular release of new capabilities but rather a commitment to continuous innovation. We will bring frontier capabilities with enterprise promises for our customers in an open and model diverse manner. Another great example of this is Copilot Cowork, which is in research preview. Built in close collaboration with Anthropic, we are bringing the technology that powers Claude Cowork into Microsoft 365 Copilot to enable long-running, multi-step work that unfolds over time.  Learn about our Wave 3 news.

These announcements come as our customers across industries are already seeing the value of Microsoft 365 Copilot. Microsoft recently delivered its strongest quarter yet with Copilot, with paid seats growing more than 160% year over year and daily active usage up ten times, as customers increasingly make Copilot a core part of everyday work. Expansion is also accelerating as the number of customers deploying Copilot at significant scale — more than 35,000 seats — tripled year over year. Just last week, Mercedes Benz announced a global rollout of Microsoft 365 Copilot, following recent investments from NASA, Fiserv, ING, the University of Kentucky, the University of Manchester, the U.S. Department of the Interior and Westpac. This is in addition to the 90 percent of the Fortune 500 who now use Copilot.

Trust: from agent experimentation and sprawl to enterprise control 

The speed of agent development and proliferation tells us customers see value, but without guardrails the pace of adoption turns into blind spots, diminished ROI and real security risk. As AI agents become more capable and autonomous, trust is nonnegotiable. IDC predicts 1.3B agents in circulation by 2028, and 80% of the Fortune 500 are already using Microsoft agents, led by operationally complex industries like manufacturing, financial services and retail.

That is why I am excited to announce the May 1 general availability of Microsoft Agent 365, the control-plane for AI agents. Priced at $15 per user, Agent 365 gives IT and security leaders a single place to observe, govern, manage and secure agents across the organization — using the same infrastructure, applications and protections they rely on to manage people today.

We are seeing tremendous momentum with our preview customers. In just two months, tens of millions of agents have appeared in the Agent 365 Registry. We have tens of thousands of customers that are already adopting Agent 365 to securely govern and scale AI agents across enterprise workflows.

At Microsoft, we are also using Agent 365 as Customer Zero and the early signals are clear. We now have visibility into more than 500,000 agents across the company with the most widely used focused on research, coding, sales intelligence, customer triage and HR self-service. That adoption is translating into real work. Over the past 28 days alone, agents have been generating more than 65,000 responses every day for employees. This is evidence that we are not simply experimenting, we are embedding agents in the flow of everyday work and empowering human ambition.

Introducing the Frontier Suite

To meet this demand, I am thrilled to announce we are bringing Intelligence + Trust together with Microsoft 365 E7: The Frontier Suite. Microsoft 365 E7 unifies Microsoft 365 E5, Microsoft 365 Copilot and Agent 365 into a single solution powered by Work IQ and integrated with the apps and security stack customers already rely on. It includes Microsoft Entra Suite and advanced Defender, Intune and Purview security capabilities, delivering comprehensive protection across agents and employees.

Customers have told us E5 alone is no longer enough; they do not want multiple tools stitched together, they want one trusted solution. At $99 per user, E7 is priced below purchasing these capabilities à la carte, giving customers a simpler, more cost-effective way to deploy enterprise AI at scale.

With the general availability of Agent 365 and the latest agentic experiences in Microsoft 365 Copilot offered as one Frontier suite, AI moves from experimentation to durable, enterprise-wide value, built on a foundation of Intelligence + Trust. This is how we make Frontier Transformation real. Microsoft is not just imagining the future of AI, we are empowering organizations across industries and around the world to build it.

¹Microsoft 365 E7 is available with and without Teams.

The post Introducing the First Frontier Suite built on Intelligence + Trust appeared first on The Official Microsoft Blog.

Since 2019, Microsoft and OpenAI have worked together to advance artificial intelligence responsibly and make its benefits broadly accessible. What began as a research partnership has grown into one of the most consequential collaborations in technology — grounded in mutual trust, deep technical integration, and a long‑term commitment to innovation. 

As conversations around AI investments and partnerships grow and as OAI announces new funding and new partners as they did today, we want to ensure these announcements are understood within the existing construct of our partnership. Nothing about today’s announcements in any way changes the terms of the Microsoft and OpenAI relationship that have been previously shared in our joint blog in October 2025. 

The partnership remains strong and central. Microsoft and OpenAI continue to work closely across research, engineering, and product development, building on years of deep collaboration and shared success. 

Our IP relationship continues unchanged. Microsoft maintains its exclusive license and access to intellectual property across OpenAI models and products. Collaborations like the partnership between OpenAI and Amazon were always contemplated under our agreements and Microsoft is excited to see what they build together. 

Our commercial and revenue share relationship remains unchanged. The ongoing revenue share arrangement remains unchanged and has always included sharing revenue from partnerships between OpenAI and other cloud providers. 

Azure remains the exclusive cloud provider of stateless OpenAI APIs. Microsoft is the exclusive cloud provider for stateless APIs that provide access to OpenAI’s models and IP. These APIs can be purchased from Microsoft or directly from OpenAI. Customers and developers benefit from Azure’s global infrastructure, security, and enterprise-grade capabilities at scale. Any stateless API calls to OpenAI models that result from a collaboration between OpenAI and any third party – including Amazon – would be hosted on Azure. 

OpenAI’s first party products, including Frontier, will continue to be hosted on Azure.  

AGI definition and processes are unchanged. The contractual definition of AGI and the process for determining if it has been achieved remains the same.

The partnership supports OpenAI’s growth. As OpenAI scales, it continues to have flexibility to commit to additional compute elsewhere, including through large-scale infrastructure initiatives such as the Stargate project.  

The partnership was designed to give Microsoft and OpenAI room to pursue new opportunities independently, while continuing to collaborate, which each company is doing, together and independently. 

We remain committed to our partnership and to the shared mission that brought us together. We continue to work side‑by‑side to deliver powerful AI tools, advance responsible development, and ensure that AI benefits people and organizations everywhere.

The post Microsoft and OpenAI joint statement on continuing partnership appeared first on The Official Microsoft Blog.

As digital sovereignty becomes a strategic requirement, organizations are rethinking how they deploy critical infrastructure and AI capabilities under tighter regulatory expectations and higher risk conditions. Microsoft’s approach to sovereignty is grounded in enabling enterprises, public sectors and regulated industries to participate in the digital economy securely, independently and on their own terms. The Microsoft Sovereign Cloud brings together productivity, security and cloud workloads to span both public and private environments. Customers can choose the right control posture for each workload, through a continuum of sovereign options protecting against fragmenting their architecture or increasing operational risk. Trust is built on confidence: confidence that data stays protected, controls are enforceable and operations can continue under real-world conditions.  

To support these confidential environments, Microsoft offers full stack capabilities that support customers across connected, intermittently connected and fully disconnected modes. Today’s expansion of capabilities includes three major updates:

• Azure Local disconnected operations (now available) – Organizations can now run mission-critical infrastructure with Azure governance and policy control, with no cloud connectivity, optimizing continuity for sovereign, classified or isolated environments. 

• Microsoft 365 Local disconnected (now available) – Core productivity workloads, Exchange Server, SharePoint Server and Skype for Business Server can run fully inside the customer’s sovereign operational boundary on Azure Local, keeping teams productive even when disconnected from the cloud. 

• Foundry Local adds modern infrastructure capabilities and support for large AI models – Organizations can now bring large AI models into fully disconnected, sovereign environments with Foundry Local. Using modern infrastructure from partners like NVIDIA, customers with sovereign needs will now be able to run multimodal models locally on their own hardware, inside strict sovereign boundaries enabling powerful, local AI inferencing in fully disconnected environments. 

This delivers a truly localized full stack experience built on Azure Local infrastructure and Microsoft 365 Local workloads, designed to stay resilient across any connectivity condition, with large models being part of Foundry Local extending the stack to run advanced multimodal models locally, securely, even when fully disconnected. Customers can now help maintain uninterrupted operations, keep mission critical workloads protected and apply consistent governance and policy enforcement, while keeping data, identities and operations within their sovereign boundaries.

Azure Local runs critical infrastructure locally, even when disconnected 

For workloads with specialized requirements, Azure Local provides the on-premises foundation with consistent Azure governance and policy controls. With Azure Local disconnected operations, management, policy and workload execution stay within the customer-operated environments, so services continue running securely even when environments must be isolated or connectivity is not available. Using familiar Azure experiences and consistent policies, organizations can deploy and govern workloads locally without depending on continuous connection to public cloud services. Azure Local is designed to scale with mission-critical needs from smaller deployments to larger footprints that support data-intensive and AI-driven workloads. Customers can start fast, expand over time and maintain a unified operational model, all within their sovereign boundary.

Operating in disconnected environments surfaces constraints that go beyond traditional cloud assumptions: External dependencies may be unacceptable, connectivity may be intentionally restricted and operational continuity is a business imperative. 

“The availability of Azure Local disconnected operations represents a breakthrough for organizations that need control over their data without sacrificing the power of the Microsoft Cloud. For Luxembourg, where digital sovereignty is not just a principle but a strategic necessity, this model offers the resilience, autonomy and trust our market expects. By combining Microsoft’s technological leadership with Proximus NXT’s sovereign cloud expertise, we are enabling our customers to innovate confidently — even in fully disconnected mode,” said Gerard Hoffmann, CEO Proximus Luxembourg. 

Microsoft 365 Local keeps productivity and collaboration available in fully disconnected environments 

As sovereign environments move into disconnected environments, keeping people productive becomes just as critical as keeping infrastructure online. Building on more than a decade of delivering and supporting these services, Microsoft 365 Local disconnected brings that continuity to the productivity layer, delivering Microsoft’s core server workloads — Exchange Server, SharePoint Server and Skype for Business Server supported through at least 2035 — directly into the customer’s sovereign private cloud.  

With Microsoft 365 Local, teams can communicate, share information and collaborate securely within the same controlled boundary as their infrastructure and AI workloads. Everything runs locally, under customer-owned policies, with full control of data resiliency, access and compliance. By operating with Azure-consistent management and governance, customers get the productivity experience they rely on, designed to stay resilient and secure even when offline. 

Bringing large models and modern infrastructure to Foundry Local 

With the availability of larger models and modern infrastructure as part of the Foundry Local portfolio, Microsoft is enabling customers with highly secure environments the ability to run multimodal, large models directly inside their sovereign private cloud environments. This brings the richness of Microsoft’s enterprise AI capabilities to on-premises systems, complete with local inferencing and APIs that operate completely within customer-controlled data boundaries.  

Expanding beyond small models, the integration of Foundry Local with Azure Local is specifically designed to support large-scale models utilizing the latest GPUs from partners such as NVIDIA. Microsoft will provide comprehensive support for deployments, updates and operational health. Even as inferencing demands increase over time, customers retain complete control over their data and hardware.  

Choice and control without added complexity 

Customers facing strict sovereignty and regulatory requirements are clear that a fully disconnected sovereign private cloud is a key business need. Microsoft Sovereign Private Cloud is designed to meet these needs head-on, enabling secure, compliant operations even in environments with no external connectivity. At the same time, we recognize that disconnected environments are not one-size-fits-all; some customers operate across connected, hybrid and disconnected modes based on mission, risk and regulation. Our approach helps customers to meet strict sovereign requirements in fully disconnected scenarios without compromising simplicity, while retaining flexibility where connectivity is possible. Together, Azure Local disconnected operations, Microsoft 365 Local and Foundry Local help organizations choose where workloads run and how environments are managed, while standardizing governance and operational practices across connected and disconnected deployments. 

Get started 

• Azure Local disconnected operations and Microsoft 365 Local disconnected are now available worldwide, and large models on Foundry Local are available to qualified customers. 

• Explore the Microsoft Sovereign Cloud  

• Learn more about Azure Local disconnected operations 

Douglas Phillips leads global engineering efforts for Microsoft’s specialized, sovereign, and private clouds. He is responsible for Microsoft’s global strategy, products and operations that bring Microsoft’s industry-leading solutions, including Azure, our adaptive cloud portfolio and Microsoft 365 collaboration suite, to customers with additional sovereignty, security, edge and compliance requirements. 

The post Microsoft Sovereign Cloud adds governance, productivity and support for large AI models securely running even when completely disconnected  appeared first on The Official Microsoft Blog.

Satya Nadella, Chairman and CEO, and members of his executive team shared the following communications with employees today.

SATYA NADELLA MESSAGE

Gaming has been part of Microsoft from the start. Flight Simulator shipped before Windows, and you can practically ray‑trace a line from DirectX in the ’90s to the accelerated‑compute era we’re in today.

As we celebrate Xbox’s 25^th year, the opportunity and innovation agenda in front of us is expansive. Today we reach over 500 million monthly active users, are a top publisher across all platforms, and continue to innovate across gaming hardware, content, and community, in service of creators and players everywhere.

I am long on gaming and its role at the center of our consumer ambition, and as we look ahead, I’m excited to share that Asha Sharma will become Executive Vice President and CEO, Microsoft Gaming, reporting to me. Over the last two years at Microsoft, and previously as Chief Operating Officer at Instacart and a Vice President at Meta, Asha has helped build and scale services that reach billions of people and support thriving consumer and developer ecosystems. She brings deep experience building and growing platforms, aligning business models to long-term value, and operating at global scale, which will be critical in leading our gaming business into its next era of growth.

Matt Booty will become Executive Vice President and Chief Content Officer, reporting to Asha. Matt’s career reflects a lifelong commitment to games and to the people who make them. Under his leadership, Microsoft Gaming has grown to span nearly 40 studios across Xbox, Bethesda, Activision Blizzard, and King, which are home to beloved franchises including Halo, The Elder Scrolls, Call of Duty, World of Warcraft, Diablo, Candy Crush, and Fallout.

Together, Asha and Matt have the right combination of consumer product leadership and gaming depth to push our platform innovation and content pipeline forward. Last year, Phil Spencer made the decision to retire from the company, and since then we’ve been talking about succession planning. I want to thank Phil for his extraordinary leadership and partnership. Over 38 years at Microsoft, including 12 years leading Gaming, Phil helped transform what we do and how we do it. He expanded our reach across PC, mobile, and cloud; nearly tripled the size of the business; helped shape our strategy through the acquisitions of Activision Blizzard, ZeniMax, and Minecraft; and strengthened our culture across our studios and platforms.  I’ve long admired Phil’s unwavering commitment to players, creators, and his team, and I am personally grateful for his leadership and counsel. He will continue working closely with Asha to ensure a smooth transition.

We have extraordinary creative talent across our studios and a global platform that is second to none. I’m excited for how we will capture the opportunity ahead and define what comes next, while staying grounded in what players and creators value.

Please join me in congratulating Asha and Matt on their new roles, and in thanking Phil for everything he has done for Microsoft and for our industry.

PHIL SPENCER MESSAGE

When I walked through Microsoft’s doors as an intern in June of 1988, I could never have imagined the products I’d help build, the players and customers we’d serve, or the extraordinary teams I’d be lucky enough to join. It’s been an epic ride and truly the privilege of a lifetime.

Last fall, I shared with Satya that I was thinking about stepping back and starting the next chapter of my life. From that moment, we aligned on approaching this transition with intention, ensuring stability, and strengthening the foundation we’ve built. Xbox has always been more than a business. It’s a vibrant community of players, creators, and teams who care deeply about what we build and how we build it. And it deserves a thoughtful, deliberate plan for the road ahead.

Today marks an exciting new chapter for Microsoft Gaming as Asha Sharma steps into the role of CEO, and I want to be the first to welcome her to this incredible team. Working with her over the past several months has given me tremendous confidence. She brings genuine curiosity, clarity and a deep commitment to understanding players, creators, and the decisions that shape our future. We know this is an important moment for our fans, partners, and team, and we’re committed to getting it right. I’ll remain in an advisory role through the summer to support a smooth handoff.

I’m also grateful for the strength of our studios organization. Matt Booty and our studios teams continue to build an incredible portfolio, and I have full confidence in the leadership and creative momentum across our global studios.  I want to congratulate Matt on his promotion to EVP and Chief Content Officer.

As part of this transition, Sarah Bond has decided to leave Microsoft to begin a new chapter. Sarah has been instrumental during a defining period for Xbox, shaping our platform strategy, expanding Game Pass and cloud gaming, supporting new hardware launches, and guiding some of the most significant moments in our history. I’m grateful for her partnership and the impact she’s had, and I wish her the very best in what comes next.

Most of all, to everyone in Microsoft Gaming, I want to say “thank you.” I’ve learned so much from this team and community, grown alongside you, and been continually inspired by the creativity, courage, and care you bring to players, creators, and to one another every day.

I’m incredibly proud of what we’ve built together over the last 25 years, and I have complete confidence in all of you and in the opportunities ahead. I’ll be cheering you on in this next chapter as Xbox’s proudest fan and player.

Phil

XBL: P3

ASHA SHARMA MESSAGE

Dear team,

Today I begin my role as CEO of Microsoft Gaming.

I feel two things at once: humility and urgency.

Humility because this team has built something extraordinary over decades. Urgency because gaming is in a period of rapid change, and we need to move with clarity and conviction.

I am stepping into work shaped by generations of artists, engineers, designers, writers, musicians, operators and more who create worlds that have brought joy and deep personal meaning to hundreds of millions of players. The level of craft here is exceptional, and it is amplified by Xbox, which was founded in the belief that the power of games connects people and pushes the industry forward.

Thank you to Phil for his leadership, and to every studio, platform, and operations team that built this foundation. We are stewards of some of the most loved stories and characters in entertainment and bring players and creators together around the fun and community of gaming in entirely new ways.

My first job is simple: understand what makes this work and protect it.

That starts with three commitments.

First, great games.

Everything begins here. We must have great games beloved by players before we do anything.  Unforgettable characters, stories that make us feel, innovative game play, and creative excellence. We will empower our studios, invest in iconic franchises, and back bold new ideas. We will take risks. We will enter new categories and markets where we can add real value, grounded in what players care about most.

I promoted Matt Booty in honor of this commitment. He understands the craft and the challenges of building great games, has led teams that deliver award-winning work, and has earned the trust of game developers across the industry.

Second, the return of Xbox.

We will recommit to our core Xbox fans and players, those who have invested with us for the past 25 years, and to the developers who build the expansive universes and experiences that are embraced by players across the world.

We will celebrate our roots with a renewed commitment to Xbox starting with console which has shaped who we are. It connects us to the players and fans who invest in Xbox, and to the developers who build ambitious experiences for it.

Gaming now lives across devices, not within the limits of any single piece of hardware. As we expand across PC, mobile, and cloud, Xbox should feel seamless, instant, and worthy of the communities we serve. We will break down barriers so developers can build once and reach players everywhere without compromise.

Third, future of play.

We are witnessing the reinvention of play.

To meet the moment, we will invent new business models and new ways to play by leaning into what we already have: iconic teams, characters, and worlds that people love. But we will not treat those worlds as static IP to milk and monetize. We will build a shared platform and tools that empower developers and players to create and share their own stories.

As monetization and AI evolve and influence this future, we will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us.

The next 25 years belong to the teams who dare to build something surprising, something no one else is willing to try, and have the patience to see it through. We have done this before, and I am here to help us do it again. I want to return to the renegade spirit that built Xbox in the first place. It will require us to relentlessly question everything, revisit processes, protect what works, and be brave enough to change what does not.

Thank you for welcoming me into this journey.

Asha

MATT BOOTY MESSAGE

I read Phil’s note with much gratitude. He has been a steady champion for game creators and our studio teams, and I’ve learned so much from his leadership over the years. All our games have benefited from his foundational support. I’m also grateful to Satya for his ongoing commitment to gaming and holding a vision of how it can connect back to the larger company.

Looking forward, I’m excited to partner with Asha as our next CEO. Our first conversations centered on her commitment to making great games and the role that plays in our overall success. She asks questions, pushes for clarity, and wants our choices grounded in player and developer needs. That mindset matters as the industry around us is changing quickly: how players engage, how games are made, and how business models and platforms evolve.

We have good reasons to believe in what’s ahead. This organization and its franchises have navigated change for decades, and our strength comes from teams who know how to adapt and keep delivering. That confidence is grounded in a strong pipeline of established franchises, new bets we believe in, and clear player demand for what we are building.

My focus is on supporting the teams and leaders we have in place and creating the conditions for them to do their best work. To be clear, there are no organizational changes underway for our studios.

Thanks for everything you do for players and for each other.

Matt

 

 

The post Asha Sharma named EVP and CEO, Microsoft Gaming appeared first on The Official Microsoft Blog.

In 2020, Microsoft announced a moonshot commitment to become carbon negative by 2030 — accelerating work across our company to advance the partnerships and technologies needed to advance sustainability for our businesses, our customers and the world. A key milestone on this journey was our aim to match 100% of our annual global electricity consumption with renewable energy(1) by 2025. Today, we are pleased to share that Microsoft has achieved this milestone(2). This progress helps drive investment into the power systems where we operate, expand clean energy supply and advance broader energy innovation.

Over a decade of investment: 40 gigawatts of new renewable energy contracted

What began in 2013 with a single 110 megawatt (MW) power purchase agreement (PPA) in Texas — a small first step to demonstrate how corporate procurement could scale clean energy(3) — has evolved into one of the largest clean energy portfolios in the world. This first deal not only supported Microsoft’s early cloud services but also set in motion a decade of commercial partnerships and learning-by-doing that served to demonstrate how corporate demand for advanced energy solutions can help to achieve a more affordable and sustainable power system, while supporting reliability for customers.

Since our carbon negative announcement in 2020, we have contracted 40 gigawatts (GW) of new renewable energy supply across 26 countries, working with more than 95 utilities and developers across 400+ contracts and counting. 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.

Our new renewable energy procurement continues to deliver significant environmental benefits, including the reduction of Microsoft’s reported Scope 2 carbon dioxide emissions by an estimated 25 million tons(4) and the mobilization of billions of dollars’ worth of private investment in regions where we operate.

Catalyzing market investment through bankable, repeatable models

Microsoft is among the early pioneers in developing technical and commercial practices that help advance bankable, repeatable and scalable procurement tools suitable for each market. Our clean energy purchasing navigates a global patchwork of power market designs, requiring creativity in how we balance cost, time to market and project sizing in our portfolio across planning, contracting and management.

Our work has benefited from a broad coalition of partners helping to build this market together. According to Bloomberg New Energy Finance, more than 200 global corporations collectively purchased nearly 200 GW of clean energy around the world since 2008. Working alongside other clean energy buyers — as well as hundreds of utilities, manufacturers, financiers, developers and engineers — we have helped reduce transaction costs, expand developer access to financing and streamline procurement approaches that other buyers can adopt.

This global flywheel of partnership, investment, technology and policy innovation is expected to continue to facilitate billions of dollars’ worth of investment into infrastructure and jobs. And as we’ve seen repeatedly, when Microsoft sends a clear market signal for world-class, first-of-a-kind technologies and infrastructure, the power sector rises to the challenge. Our procurement over the past decade has demonstrated that partnerships, communities and innovation are essential ingredients that help to accelerate first-of-a-kind technologies and infrastructure at scale.

Scaling partnerships to scale infrastructure

Critical to Microsoft’s success in expanding digital infrastructure and supporting our local communities is our ability to build trusted partnerships with the over 95 global energy suppliers that support our clean energy portfolio. We have sourced 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. Combining scale with speed, Microsoft’s landmark 10.5 GW framework agreement with Brookfield sends a long-term, 2030 demand signal to the market that enables developers to raise funding more efficiently, bolster supply chains, hire engineers and construct world-class energy infrastructure.

Putting communities first

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. Through partnerships with developers and nonprofit organizations, we’ve worked to embed community-driven benefits into our energy portfolio. These benefits include robust infrastructure, economic inclusion and support for community-focused organizations.

Our support for communities shows up in projects like our 500 MW PPA with Sol Systems, or our 250 MW PPA with Volt Energy Utility that provided local training and jobs, as well as grants to community nonprofit organizations and habitat restoration. We’ve also signed over 1.5 GW of distributed solar, bringing clean energy directly into hundreds of communities around the world. Landmark agreements like our 500 MW offtake with Pivot Energy, or our 270 MW offtake with PowerTrust are expected to foster employment, energy cost savings and grid resilience in communities across the United States, Mexico and Brazil. More details on the above examples and our approach to community benefits in clean energy agreements can be found in a dedicated Microsoft whitepaper.

Innovation unlocks new markets and pathways

Microsoft’s clean energy procurement continues to play an important role in catalyzing technical, commercial and regulatory innovation. Our commercial efforts have helped lower barriers to entry into new markets and expand access into multi-technology contracts that accelerate decarbonization.

In Japan, Microsoft signed one of the first corporate PPAs in the country’s restructured power market. Our 25 MW, 20-year agreement with Shizen represents the first single-asset virtual PPA executed in the country, which helped pave the way to over 2GWs of corporate procurement since 2024, according to Bloomberg New Energy Finance. Alongside opening new markets, we have structured several multi-technology offtakes in nascent markets for corporate procurement. In India, Microsoft purchased a combined 437 MW solar/wind hybrid offtake from Renew, where our projects will support energy access and rural electrification. In Microsoft’s home state of Washington, our datacenters in Douglas County are supplied by 100% carbon-free energy, as we leverage a creative blend of new wind power and hydropower storage to deliver around-the-clock clean energy.

Looking forward to 2030 and beyond

In 2025, the International Energy Agency (IEA) described a new “Age of Electricity,” marked by accelerating electricity demand from electric vehicles, air conditioners, data centers and heat pumps. As the world electrifies more of the economy, the demand for affordable, reliable and clean electricity will continue to rise.

Our experience building Microsoft’s clean energy portfolio both reflects and furthers global trends. According to IEA data, since 2000, renewable energy generation has expanded nearly four-fold. In many power markets across the world, clean energy is one of the fast-growing sources of generation, 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.

As we continue our journey toward becoming carbon negative by 2030, Microsoft will continue to push for an expansive focus on adding all forms of carbon-free electricity solutions, complementing and adding to our portfolio of renewable energy resources. We recognize that the world’s rising electricity needs require a balanced, all-of-the-above decarbonization strategy to meet global economic growth and environmental goals, and our sustainability goals will continue to support this approach moving forward. Such a strategy requires a broader set of carbon-free energy and grid-enabling technologies, including nuclear energy, next-generation grid infrastructure and carbon capture technology. Just as renewable energy was a relatively small part of global energy grids in 2013 when we signed our first PPA, today many advanced energy technologies remain early in their development but offer significant promise to accelerate progress towards an affordable, reliable and sustainable energy future.

Microsoft has already taken early steps to support the advancement of a broader set of carbon-free energy technologies as we partner with Helion and Constellation Energy on a 50 MW fusion project in Washington state and work with Constellation to restart the 835 MW Crane Clean Energy Center in Pennsylvania. Microsoft’s Climate Innovation Fund has allocated $806 million of capital to 67 investees, with 38% directed toward Energy Systems — advancing carbon-free power and fuels, energy storage and energy management solutions.

We welcome continued collaboration with our power sector partners to bring these innovations to market and incorporate new technology tools in the process to accelerate their development.

We will continue to build and leverage new AI-driven tools to design, permit and deploy new power technologies that help expand and more efficiently operate the electricity grid, bringing more clean energy online faster. This work is exemplified by our recently announced collaborations with Idaho National Laboratory and the Midcontinental System Operator, among other examples.

And as we advance innovative energy technologies, we recognize that standards must evolve alongside innovation. That is why we will continue participating in industry forums that strengthen carbon accounting frameworks — so that our clean energy procurement is measured with greater accuracy and delivers real world emissions reductions, with a continued focus on maintaining the high level of integrity that the world has come to expect from Microsoft.

Our carbon negative commitment remains a call to action — for Microsoft, our customers and the broader technology sector — to invest in an affordable, reliable and sustainable power system. As we look toward 2030, that call to action has never been clearer.

Gratitude — and momentum for the work ahead

Today’s milestone represents a shared achievement among the utility professionals, clean energy developers, community leaders, technology innovators and forward-thinking policymakers who continue the deployment of renewable energy. Meeting today’s milestone shows what partnership can deliver in bringing big ideas to life. The future of carbon-free energy is one that we will create – together.

As Microsoft’s Chief Sustainability Officer, Melanie Nakagawa leads the company’s targets to be carbon negative, water positive, and zero waste by 2030. She brings deep experience at the intersection of policy, business, and technology to advance climate and sustainability solutions globally.

As President of Cloud Operations + Innovation at Microsoft, Noelle Walsh leads the organization that powers the global Microsoft Cloud. She oversees the company’s physical cloud infrastructure and operations, with a charter focused on safety, security, availability, sustainability, and competitive infrastructure growth — bringing decades of global operational leadership.

Footnotes

1. Renewable energy is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
2. To date, Microsoft’s renewable energy target includes two primary categories: renewable energy from contracted projects and grid mix. The first is renewable energy delivered under PPAs or similar long-term contracting mechanisms, generally for new projects where our financial involvement in the project’s development is critical for its success. This category represents more than 90% of the renewable energy applied to achieve our 2025 target. The second category is “grid mix” — renewable energy supported via our standard utility relationships and rates, inclusive of policy programs such as renewable portfolio standards and state and utility decarbonization goals. Our 2025 100% renewable target does not include purchases from short-term, so-called “spot market” renewable energy credits (RECs) sourced from operational clean energy projects. With the above in mind, Microsoft leverages a straightforward formula to determine our 100% renewable energy metric on a global, annual basis. We update and further detail the methodology and assumptions behind this formula in our annual sustainability reports:
3. Clean energy — also referred to in this blog as carbon free energy — is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
4. Reduction of reported Scope 2 emissions are calculated between FY20-25, the cumulative difference between location based and market-based emissions, excluding the use of short-term, so-called “spot market” RECs.

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Satya Nadella, Chairman and CEO, posted the below message to employees on Viva Engage this morning.

I am excited to share a couple updates in two of our core priorities: security and quality. Hayete Gallot is rejoining Microsoft as Executive Vice President, Security, reporting to me. I’ve also asked Charlie Bell to take on a new role focused on engineering quality, reporting to me.

Charlie and I have been planning this transition for some time, given his desire to move from being an org leader to being an IC engineer. And I love how energized he is to practice this craft here day in and day out!

Hayete joins us from Google where she was President, Customer Experience for Google Cloud. Before that, she spent more than 15 years at Microsoft with senior leadership roles across engineering and sales, playing multiple critical roles in building two of our biggest franchises – Windows and Office, leading our commercial solution areas’ go-to-market efforts. And she was instrumental in the design and implementation of our Security Solution Area. She brings an ethos that combines product building with value realization for customers, which is critical right now.

As we shared during our quarterly earnings last week, we have great momentum in security, including progress with Security Copilot agents, strong Purview adoption, and continued customer growth, and we will build on this.

We have a deep bench of talent and leaders across our security business, and this team will now report to Hayete. Additionally, Ales Holecek will take on a new role as Chief Architect for Security, reporting to Hayete. Ales has spent years leading architecture and development across some of our most important platforms and will help bring that same sensibility to security and its connections back to our existing scale businesses and the Agent Platform.

As we shared yesterday, we have a new operating rhythm with commercial cohorts, and Hayete and her team will now be accountable for our security product rhythms as part of this process.

Charlie built our Security, Compliance, Identity, and Management organization and helped rally the company behind the Secure Future Initiative. And we’re fortunate to have his continued focus and leadership on another one of our top priorities. With our Quality Excellence Initiative, we have increased accountability and accelerated progress against our engineering objectives to ensure we always deliver durable, high quality-experiences at global scale. And Charlie will partner closely with Scott Guthrie and Mala Anand on this work.

I’m excited to welcome Hayete back to Microsoft to advance this mission critical work, and grateful to Charlie for all he has done for our security business and what he will continue to do for the company.

Satya

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