Microsoft

• 1. Introduction

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  The January 1975 issue of Popular Electronics put a microcomputer called the Altair 8800 on its cover, and two childhood friends saw an opening. Bill Gates phoned the machine's maker, a company called MITS, and claimed he had a working BASIC interpreter for it. He did not yet have one. While Paul Allen built a simulator for the Altair, Gates wrote the interpreter, and when they demonstrated it that March in Albuquerque, New Mexico, it ran flawlessly. From that bluff grew a company now headquartered at One Microsoft Way in Redmond, Washington. How does a software supplier built on a borrowed traffic-counting idea become one of the most valuable public companies on earth? Why have governments on two continents spent decades dragging it into court? And what does it mean that a firm born to sell a programming language now stores petabytes of a foreign army's data? The answers run through operating systems, antitrust rooms, layoffs, and a White House ballroom.

• 2. A Bluff And A Name

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  Before there was Microsoft there was Traf-O-Data, founded by Gates and Allen in 1972 to sell a rudimentary computer that tracked and analyzed automobile traffic data. The Altair demonstration changed their direction. MITS agreed to distribute the interpreter, marketing it as Altair BASIC, and on the 4th of April 1975, the two formally established the company with Gates as CEO. Allen suggested the name Micro-Soft, short for micro-computer software. The young firm reached overseas quickly. In August 1977 it formed an agreement with ASCII Magazine in Japan, producing its first international office, ASCII Microsoft. In January 1979 the company moved its headquarters to Bellevue, Washington. Paul Allen resigned in 1983 after developing Hodgkin's lymphoma, leaving the company he had helped name while it was still finding its footing in a market it would soon own.

• 3. The Operating System Empire

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  IBM awarded Microsoft a contract in November 1980 to supply an operating system for the IBM Personal Computer. Microsoft did not have one, so it purchased a CP/M clone called 86-DOS from Seattle Computer Products and branded it MS-DOS, which IBM in turn rebranded IBM PC DOS. The crucial detail was ownership. IBM had copyrighted the PC's BIOS, forcing rival hardware makers to reverse engineer it, but no such restriction applied to the operating system, and Microsoft kept MS-DOS for itself. Windows 1.0 arrived on the 20th of November 1985, as a graphical extension for MS-DOS, even as Microsoft had begun jointly developing OS/2 with IBM that same August. The partnership soured over Windows NT, which shipped on the 21st of July 1993, with a modular kernel and the 32-bit Win32 programming interface. Microsoft informed IBM of NT, and the OS/2 alliance deteriorated. Windows 95, released on the 24th of August 1995, brought a new interface with a start button and 32-bit compatibility. A national newspaper called its launch the splashiest, most frenzied, most expensive introduction of a computer product in the industry's history.

• 4. Riches And The Pac-Man Logo

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  On the 13th of March 1986, Microsoft went public on the NASDAQ exchange at an opening price of 21 dollars, closing the trading day at 27.75. The stock's rise made an estimated four billionaires and 12,000 millionaires among Microsoft employees. Weeks earlier, on February 26, the company had moved its headquarters from Bellevue to Redmond. The following year Microsoft adopted what became known as the Pac-Man Logo, designed by Scott Baker and unveiled on the 26th of February 1987. Baker described it as set in Helvetica italic with a slash between the o and s to emphasize the soft part of the name and convey motion and speed. An employee named Dave Norris ran an internal joke campaign to save the old green, all-uppercase logo with its fanciful letter O, nicknamed the blibbet, but it was discarded. The Pac-Man Logo endured 25 years, 5 months, and 28 days until the 23rd of August 2012, the longest-serving logo in the company's history, when a new tile-centric design appeared at the opening of the 23rd Microsoft store in Boston.

• 5. Three Chief Executives

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  On the 13th of January 2000, Bill Gates handed the CEO position to Steve Ballmer, a college friend who had joined the company in 1980, while taking the new title of Chief Software Architect. Ballmer pushed Microsoft deeper into hardware. He oversaw the release of Windows XP on the 25th of October 2001, the launch of the Xbox that same year, and the company's largest acquisition at the time when it took over Skype in 2011. Under Ballmer the company built its first in-house PC, the Surface, unveiled in June 2012. Satya Nadella, who had led the Cloud and Enterprise division, succeeded Ballmer on the 4th of February 2014, and turned the company toward cloud computing. He acquired the Minecraft maker Mojang for 2.5 billion dollars in 2014 and LinkedIn in 2016. In 2022 he formed the Microsoft Gaming division, naming Xbox chief Phil Spencer its inaugural CEO, and in 2023 closed the all-cash purchase of Activision Blizzard worth 68.7 billion dollars. Gates himself left the board on the 13th of March 2020, a move one journalist called the biggest boardroom departure in tech since the death of Steve Jobs.

• 6. A Decade In Court

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  In 1990 the Federal Trade Commission examined Microsoft for possible collusion over its IBM partnership, opening more than a decade of legal clashes with the government. On the 27th of July 1994, the Department of Justice's Antitrust Division charged that since 1988 Microsoft had pushed equipment makers into per-processor royalties, paying regardless of whether a Microsoft product was used. In October 1997 the Justice Department asked a federal court to stop the bundling of Internet Explorer with Windows. Europe proved just as costly. The European Union brought antitrust action in March 2004 over the dominance of Windows, producing a judgment of 497 million euros and forcing versions of Windows XP without Windows Media Player. A further fine of 899 million euros followed on the 27th of February 2008, for non-compliance. Internally, the Department of Justice found Microsoft used the phrase embrace, extend, and extinguish to describe entering categories built on widely used standards, then extending them with proprietary capabilities to disadvantage rivals. The battles never fully ended. In November 2024 the Federal Trade Commission opened an investigation into Microsoft's cloud, AI, and cybersecurity businesses.

• 7. The AI Pivot And Its Costs

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  On the 23rd of January 2023, Microsoft announced a multi-year, multi-billion dollar investment deal with OpenAI, the developer of ChatGPT, the day after CEO Satya Nadella hosted a Sting concert for 50 people in Davos, Switzerland. The same week he announced 10,000 layoffs. The AI turn brought hardware too. At a November 2023 developer conference Microsoft revealed two custom chips, the Maia for running large language models and the Cobalt CPU for cloud services on Azure. The relationship with OpenAI grew strange in November 2023, when Nadella said ousted OpenAI chief Sam Altman and former president Greg Brockman would join Microsoft to lead an advanced AI research team, only for both to return to OpenAI days later. The spending has been enormous. By July 2025 Microsoft cut roughly 9,000 jobs, its largest reduction in over two years, to control costs amid heavy AI infrastructure spending. An analysis by Bridgewater Associates expects Microsoft, Amazon, Alphabet, and Meta to invest about 650 billion dollars collectively on AI infrastructure in 2026. In March 2026 Microsoft unveiled Copilot Cowork, based on Claude Cowork.

• 8. Power, Surveillance, And Gaza

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  Microsoft Azure stores data for the Israel Defense Forces, and its use intensified during the Gaza war, doubling to over 13.6 petabytes between March and July 2024. In June 2025 a UN expert's report named the company as central to Israel's surveillance apparatus and the ongoing Gaza destruction. A joint investigation by The Guardian, +972 Magazine, and Local Call reported in August 2025 that Azure stored mass-surveilled Palestinian phone calls used to identify bombing targets, after which Microsoft said it had ended Azure access for the IDF's Unit 8200. The company also helped suspend the email account of Karim Ahmad Khan, an International Criminal Court prosecutor investigating Israel, in compliance with a Trump executive order. Dissent came from inside. In October 2024 Microsoft fired engineer Hossam Nasr and data scientist Abdo Mohamed, organizers of a vigil for Palestinians killed in the war and members of a group called No Azure for Apartheid. The closeness to government is older than the war. Leaked documents identified Microsoft as the first company to join the NSA's PRISM program in 2007, a claim the company has denied. In 2025 Microsoft was among the donors who funded the demolition of the East Wing of the White House.