Read the full Global AI Adoption Report.

Global adoption of artificial intelligence continued to rise in the second half of 2025, increasing by 1.2 percentage points compared to the first half of the year, with roughly one in six people worldwide now using generative AI tools, remarkable progress for a technology that only recently entered mainstream use. 

To track this trend, we measure AI diffusion as the share of people worldwide who have used a generative AI product during the reported period. This measure is derived from aggregated and anonymized Microsoft telemetry and then adjusted to reflect differences in OS and device-market share, internet penetration, and country population. Additional details on the methodology are available in our AI Diffusion technical paper.^[1]

No single metric is perfect, and this one is no exception. Through the Microsoft AI Economy Institute, we continue to refine how we measure AI diffusion globally, including how adoption varies across countries in ways that best advance priorities such as scientific discovery and productivity gains. For this report, we rely on the strongest cross-country measure available today, and we expect to complement it over time with additional indicators as they emerge and mature. 

Despite progress in AI adoption, the data shows a widening divide: adoption in the Global North grew nearly twice as fast as in the Global South. As a result, 24.7 percent of the working age population in the Global North is now using these tools, compared to only 14.1 percent in the Global South.  

Countries that have invested early in digital infrastructure, AI skilling, and government adoption, such as the United Arab Emirates, Singapore, Norway, Ireland, France, and Spain, continue to lead. The UAE extended its lead as the #1 ranked country, with 64.0 percent of the working age population using AI at the end of 2025, compared to 59.4 percent earlier in the year. The UAE has opened a lead of more than three percentage points over Singapore, which continues in second place with 60.9 percent adoption.

 

The second half of the year in the United States shows that leadership in innovation and infrastructure, while critical, does not by themselves lead to broad AI adoption. The U.S. leads in both AI infrastructure and frontier model development, but it fell from 23rd to 24th place in AI usage among the working age population, with a 28.3 percent usage rate. It lags far behind smaller, more highly digitized and AI-focused economies. 

South Korea stands out as the clearest end-of-year success story. It surged seven spots in the global rankings, climbing from 25th to 18th, driven by government policies, improved frontier model capabilities in the Korean language, and consumer-facing features that resonated with the population. Generative AI is now used in schools, workplaces, and public services, and South Korea has become one of ChatGPT’s fastest-growing markets, leading OpenAI to open an office in Seoul.[2] 

 

A parallel development reshaping the global landscape in 2025 was the rapid rise of DeepSeek, an open-source AI platform that has gained significant traction in markets long underserved by traditional providers. By releasing its model under an open-source MIT license and offering a completely free chatbot, DeepSeek removed both financial and technical barriers that limit access to advanced AI. Its strongest adoption, not surprisingly has emerged across China, Russia, Iran, Cuba, and Belarus. But perhaps even more notable is DeepSeek’s surging popularity across Africa, where it is aided by strategic promotion and partnerships with firms such as Huawei.^[3]

This rapid evolution underscores an increasingly important dimension of AI competition between the United States and China, involving a race to promote adoption of their respective national models. DeepSeek’s success reflects growing Chinese momentum across Africa, a trend that may continue to accelerate in 2026. DeepSeek’s ascent also underscores a broader truth: the global diffusion of AI is influenced by accessibility factors, and the next wave of users may come from communities that have historically had limited access to technological progress. The challenge ahead is ensuring that innovation spreads in ways that help narrow divides rather than deepen them.

[1]A. Misra, J. Wang, S. McCullers, K. White, and J. L. Ferres, “Measuring AI Diffusion: A Population-Normalized Metric for Tracking Global AI Usage,” Nov. 04, 2025, arXiv: arXiv:2511.02781. doi: 10.48550/arXiv.2511.02781..

[2] OpenAI Korea set to launch next month – The Korea Times.” https://www.koreatimes.co.kr/business/companies/20250828/openai-korea-set-to-launch-next-month

[3] S. Rai, L. Prinsloo, and H. Nyambura, “China’s DeepSeek Is Beating Out OpenAI and Google in Africa (1).” Bloomberg News..

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Since opening our first Canadian office in Toronto in 1985, Microsoft has played an important role in every chapter of Canada’s digital story, long before cloud and AI were household words. That history matters. Over four decades, our company and our thousands of employees have grown alongside Canada. We’ve developed a deep appreciation for this nation’s culture, values, needs, and important role in the world.

Today we are announcing the most important commitment in Microsoft Canada’s history. We’re adding to our investments—with a total of $19 billion CAD between 2023 and 2027, including more than $7.5 billion CAD in the next two years. We’re building new digital and AI infrastructure needed for the nation’s growth and prosperity, with new capacity beginning to come online in the second half of 2026. Equally important, we’re launching a new five-point plan to promote and protect Canada’s digital sovereignty. And we’re combining this with ongoing and new work to invest in Canada’s people, ensuring they have access to the skills needed to succeed in an AI era.

This builds upon Microsoft’s longstanding and deep relationship with the Canadian people. With more than 5,300 employees across 11 cities nationwide, including Toronto, Vancouver, Montreal, Calgary, Edmonton, Ottawa, and Quebec City, we have employees in every region to bring talent closer to the communities we serve.

Beyond our own team, based on third party estimates, we’re fueling the broader tech ecosystem with more than 17,000 companies that are Microsoft partners in Canada generating between $33B CAD and $41B CAD in annual revenue. Based on this partnership model, Microsoft helps support 426,000 jobs across Canada, including close to 300,000 people who build solutions on Microsoft platforms or provide goods and services for these efforts. As we expand our AI and cloud footprint, these partnerships are helping Canadian organizations to modernize and compete globally.

Our commitment also extends beyond business. In 2024 alone, we donated $219M CAD in grants, employee giving, and technology services to Canadian non-profits and charities.

At its core, our commitment to Canada centres on three things: technology, trust, and talent.

Technology: Building the Backbone of Canada’s Digital Future

Canada’s AI transformation is accelerating. According to Microsoft’s AI Diffusion Leaderboard, Canada ranks 14th globally in AI adoption, with usage now topping a third of the population. Developer contributions are growing too with Canada ranking 14th worldwide in GitHub AI contributors.

This momentum is clear. Canada is a leader not just in AI research, but in putting AI to good use. But sustaining this momentum requires more than enthusiasm. It demands advanced AI infrastructure, sovereign safeguards, world-class cybersecurity, and a skilled workforce to keep pace with innovation. That’s why Microsoft is investing to create a secure, sustainable, and scalable backbone for AI adoption, empowering Canada to lead confidently in the AI era.

Our investment expands our Azure Canada Central and Canada East datacentre regions, delivering sustainable, secure, and scalable cloud and AI capabilities. These datacentres will power everything from modernized public services to advanced AI innovation—responsibly and within Canadian borders.

Every facility and datacentre we build in Canada reflects Microsoft’s global commitment to sustainability. We’re designing our facilities to be energy-efficient, powered increasingly by renewable energy, and optimized for water conservation through advanced cooling technologies. These steps align with our pledge to be carbon negative, water positive, and zero waste by 2030, ensuring that as we expand our AI and cloud footprint, we do so responsibly—minimizing environmental impact while supporting Canada’s clean energy goals.

Since early 2023, these investments have already launched major infrastructure projects, created thousands of jobs, and partnered with Canadian innovators to drive sustainability and economic growth. These datacentres also translate into thousands of construction and permanent engineering and technology jobs, partnerships with Canadian digital innovators, and a surge in local economic opportunity.

Our infrastructure expansion has helped transform and develop new industries—from retail and finance to cleantech and quantum computing. Firms like Canadian Tire, Manulife, BMO, and Gay Lea Foods are embracing AI to transform their businesses, and their stories are a testament to Canada’s leadership in digital adoption.

To help achieve our 2030 sustainability goals, Microsoft is also investing in Canadian cleantech innovation. Canada is recognized as a global leader in cleantech and carbon removal technologies, and we are proud to collaborate with outstanding Canadian companies like Eavor, Cyclic Materials, Arca, Deep Sky, and Carbon Engineering (via 1PointFive).

Trust: A Five-Point Plan to Protect Canada’s Digital Sovereignty

As important as our investment in AI infrastructure is the new company-wide initiative we are launching to protect Canada’s digital sovereignty. This builds on technology and expertise across Microsoft and is based on a five-part plan to defend Canada’s cybersecurity, keep Canadian data on Canadian soil, strengthen privacy protection, support leading local AI developers, and ensure the continuity of cloud and AI services.

Defending Canada’s cybersecurity

As we enter the second quarter of the 21^st century, the protection of digital sovereignty starts with the protection of cybersecurity. Reflecting Microsoft’s long-term presence in Canada, we appreciate how much has changed since the century began. During the first quarter of the century, Canada’s population grew by more than 28 percent and its GDP in real terms grew by more than 55 percent. Changing geopolitics and navigation in the Arctic Ocean have put Canada in a more important global position than ever.

Canada’s growth and importance have made the country a bigger cybersecurity target.

Microsoft has long prioritized the protection of Canadian cybersecurity. With unmatched threat intelligence capabilities based on 100 trillion signals from around the world every day, we’ve seen increasing international targeting of Canadian digital assets, especially from China, Russia, North Korea, and countries across south Asia and the Middle East. This has included influence operations in advance of elections and digital espionage focused on government agencies.

Even more significant, Canada’s diverse and robust economy has become a target of sophisticated international ransomware attacks. Organized criminal groups—some with nation state sponsorship—are targeting every sector of the economy and the public, and they are starting to rely on even more sophisticated technology and techniques, including AI. Our assessment is that in 2025 more than half of cyberattacks against Canada with known motives have been based on financial objectives, and 80 percent of them have involved efforts to exfiltrate data. Almost 20 percent have targeted the healthcare and education sectors, which creates more widespread threats to the public.

To strengthen our protection of Canada’s cybersecurity, we are launching today in Ottawa a dedicated Threat Intelligence Hub. This Hub will house Microsoft subject matter experts in threat intelligence, threat protection research, and applied AI security research. They will have access to Microsoft threat intelligence data and assets from around the world, so they can work closely with the Government of Canada and law enforcement partners to track and interdict nation state actors and organized crime.

In recent months, our team in Canada has been working to thwart China-based threat actors and has been sharing intelligence related to North Korean IT workers using stolen or fake identities to secure jobs with technology companies in Canada. We are dedicated to making this cybersecurity protection even stronger going forward.

Keeping Canadian Data on Canadian Soil

We also recognize the importance of ensuring that our Canadian customers can keep their local data on Canadian soil. This is why we embarked a decade ago, in close consultation with national leaders, to build and open our first two Canadian datacentres to provide local data residency in Toronto and Quebec City. We have steadily expanded our local services each year since. In 2026, we will take three new steps to keep Canadian data on Canadian soil.

First, we will strengthen sovereign controls and expand our data residency commitments by offering in-country data processing for Copilot interactions.

 

Second, we will expand our Azure Local offering in Canada to enable the extension of Azure capabilities to customer-owned environments such as private cloud and on-premises infrastructure.

And third, we will launch Sovereign AI Landing Zone (SAIL) in Canada. This is an open-source AI Landing Zone whose code will be hosted publicly on GitHub, and which will provide a secure foundation for deploying AI solutions within Canada’s borders, so organizations can build, scale, and innovate while maintaining the highest standards of privacy and compliance.

Protecting Canadian privacy

We recognize that privacy is a cornerstone of digital trust. We have long protected the digital privacy of people across Canada. As we look to 2026, we will build on this strong foundation with new technical capabilities and legal measures.

Next year, Microsoft will bring the latest confidential computing capabilities to our Canadian datacentre regions. Confidential computing in Azure enables organizations to keep data encrypted and isolated, even while in use, helping meet stringent digital sovereignty requirements. Azure Key Vault will also be available to Canadian customers, supporting external key management and allowing encryption keys to remain under customer control, whether stored on-premises or with a trusted third-party Hardware Security Module (HSM).

We will couple these technical measures with expanded contractual protection. We are codifying our promise to protect our Canadian customers’ data with a contractual commitment, in which we agree to challenge any government demand for Canadian government or commercial customer data where we have a legal basis for doing so.

Supporting Canada’s AI developers

Canada’s growing AI and digital ecosystem also requires protection and support for the nation’s leading AI developers. We have expanded this work in 2025 and will continue to prioritize these efforts in the year ahead.

Our work with Cohere exemplifies this commitment: we are welcoming Cohere into the Microsoft Foundry’s first-party model lineup, making their advanced language models—Command A, Embed 4, and Rerank—accessible on Azure. This will amplify Canadian innovation on a global stage. This partnership is built on more than technology; it is grounded in trust and shared values, with initiatives to help Cohere scale across Canada and worldwide.

We will explore new ways to integrate Cohere’s sovereign, made-in-Canada AI models into Microsoft services, helping to ensure Canadian enterprises and the public sector benefit from secure, locally developed solutions that embody responsibility and integrity. Together with Canada’s leading innovators, we are building relationships that deliver opportunity and impact while reinforcing the trusted foundation of Canadian digital sovereignty.

Defending the continuity of Canadian cloud services

Finally, in the face of geopolitical uncertainty, continuity is essential. Microsoft pledges to rigorously defend the uninterrupted operation of cloud services for Canadian government customers. If ever confronted with an order to suspend or halt operations in Canada, we will pursue every available legal and diplomatic avenue—including litigation—to protect access to critical infrastructure. Our track record demonstrates our resolve to stand up for customer rights. We remain ready to reinforce this commitment through robust contractual agreements, confident in our ability to ensure the ongoing operation of Canadian datacentres. Ultimately, these efforts aim to deepen trust between people, institutions, and nations, grounded in mutual respect and a shared commitment to advancing Canada’s digital future.

Microsoft’s digital infrastructure in Canada is not built on wheels. It is permanent infrastructure, and fully subject to Canadian laws and regulations. We recognize and respect that our operations in Canada are governed by Canadian law, just as we adhere to local laws in every country where we operate.

Talent: Investing in the Future for Every Canadian

At its core, every datacentre we build and every AI capability we deploy is an investment in Canadians and their future. Because technology alone doesn’t drive transformation, people do. That’s why it’s imperative to ensure that every Canadian can develop the skills needed to succeed in an AI era.

The need is clear. By 2030, nearly 60 percent of workers worldwide will require new digital skills, yet today only 24 percent of Canadians have received AI training, compared to a global average of 39 percent. Closing this gap is critical for Canada’s competitiveness.

Our new Microsoft Elevate business unit is designed to put people first, making AI opportunities accessible across the country. Since July 2024, Microsoft Canada has engaged 5.7 million learners through free skilling programs, with more than 546,000 individuals completing an AI training course. And we’re not stopping there. By 2026, Microsoft Elevate will help 250,000 Canadians earn in-demand AI credentials, ensuring the workforce is ready for the next decade of innovation.

Our partnerships amplify this impact. The Nonprofit AI Impact Hub, developed with the Canadian Centre for Nonprofit Digital Resilience (CCNDR) and Imagine Canada, strengthens the digital resilience of Canada’s 170,000 charities and nonprofits, which collectively employ 2.7 million people. Through role-based AI training and micro-credentials, we’re equipping this sector with tools to serve communities better.

We’re also investing in the next generation. Today, we are proud to announce a new partnership with Actua, a national leader that brings STEM education to youth throughout Canada, including those in remote, rural, and Indigenous communities. Microsoft Canada and Actua are committed to working with Indigenous communities across Canada to support AI skills development, so that the benefits of AI are felt widely. This partnership will support Actua’s AI Ready and InSTEM (Indigenous Youth in STEM) programs, to equip 20,000 young Canadians with essential AI skills. The InSTEM program will add AI learning for Indigenous youth, blending technology with cultural heritage and knowledge. For instance, students learn how AI tools can help preserve Indigenous languages and support cultural identity.

Canada Can Count on Us

Few American companies have benefitted more than Microsoft from such longstanding ties to Canada. Living so close to the border, we have long appreciated the many attributes that make Canada so special. We share more than geography. We share priorities like security, sustainability, and inclusive growth.

Today, we’re taking this partnership to the next level. We believe Canada has what it takes to help lead the world in responsible AI innovation and adoption, and we’re committed to being a partner every step of the way.

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Around the world, the dangers of extreme weather are a daily reality. In 2024, extreme weather displaced or disrupted the lives of more than 800,000 people worldwide —a reminder that accurate, timely forecasts aren’t just about data; they’re about people. From farmers deciding when to plant to coastal communities preparing for hurricanes, better forecasting can save lives, protect infrastructure, and support economies. 

That is why Microsoft remains deeply committed to Aurora, an AI model designed to help scientists understand Earth systems in new ways. Trained on vast amounts of data, it’s tuned to model the Earth’s systems. Aurora has already shown promise across multiple scenarios, including predicting the weather, tracking hurricanes and air quality, and modeling ocean waves and energy flows. 

Today, we are reaffirming our commitment: keep Aurora open, collaborative, and impactful so researchers can innovate faster and deliver solutions that help communities prepare, adapt, and thrive. Scientific progress depends on openness and a strong global community, which is why Aurora will progress as an open-source platform, enabling scientists everywhere to contribute and apply it to new climate and weather challenges. 

The next phase: Fueling innovation through research partnerships

We’re collaborating with Professor Rich Turner, a leader in machine learning research, and his lab at the University of Cambridge through a Microsoft AI for Good grant and research scientists to continue development of Aurora. Originally developed by Microsoft Research AI for Science, with collaboration from Professor Turner, we believe Aurora has the potential to change the way scientists around the world can use AI for weather and climate science. 

Building on our SPARROW initiative, we’re also investing in research of open-source weather stations that can expand access to high-quality environmental data. These affordable, community-deployable systems are designed to help fill critical observation gaps and strengthen the dependability of weather predictions where they matter most. 

Making Aurora available to scientists everywhere

Aurora’s source code and model weights are already open—but we’re going further. Together with Turner and Cambridge, our AI for Good team will open-source future releases of Aurora and new models that are built upon it, including training pipelines. By making Aurora open and free to build upon, we’re enabling researchers and developers everywhere to collaborate, contribute, and drive innovation together. 

Empowering national meteorological services

As with any technology, the measure of success for tools like Aurora is to have a positive impact on the lives of people. Empowering national meteorological services across the Global South, along with the Global North, is a priority.  We’re particularly focused on the application of Aurora to help meteorological services develop and strengthen their own forecasting systems that are tailored to their own local environments. This will allow them to adapt, extend, and innovate on top of Aurora, improving the accuracy, reliability, and reach of their forecasts. 

Enabling a cross-industry ecosystem

Aurora is trained on one of the largest collections of atmospheric data ever assembled to develop an AI forecasting model. It’s then fine-tuned to perform a variety of specific tasks, like predicting wave height or air quality, using modest amounts of additional data.  

The application of such a model could unlock innovation across all kinds of other industries. For example, energy companies and commodity traders have expressed interest, particularly in seeing how Aurora can be adapted to better predict renewable power generation, anticipate extreme weather events, and help protect energy grids. 

We are excited to see our work on Aurora graduate from a research project into a truly collaborative, open-source effort. By opening Aurora to the global community, we’re enabling breakthroughs in scientific understanding that we hope will transform humanitarian aid, optimize energy systems, advance sustainability, and even reshape financial services. 

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Today, I had the pleasure of joining a range of leaders for timely, impactful discussions on child well-being in the age of AI at the Vatican, building on thoughtful conversations held during the United Nations General Assembly. These issues are top of mind globally, from parents to policymakers to physicians.

At Microsoft, we remain focused on our goal of empowering young people to use technology safely, mindfully, and in pursuit of social, educational, and economic opportunities. That means taking new steps spurred by regulation, such as new age verification measures for our UK Xbox users, as well as adapting our longstanding commitments to responsible AI and child online safety and privacy to build trust in the AI era. Today, we’re sharing new research on youth perspectives, announcing the AI Futures Youth Council to amplify teen voices, and offering policy recommendations to help families navigate the digital world with confidence.

Centering young people’s voices: Announcing the AI Futures Youth Council and new age assurance research

In 2017, Microsoft led the industry with our first Council for Digital Good—a forum where we could hear directly from young people about their experiences and perceptions of online risk. In 2025, with AI reshaping our world—and their future—we again need to center the voices of young people as we think about responsible design for AI and how we set students up for the future. We are actively working with teens from the Asia-Pacific region to develop our first “for teens, by teens” guide to AI chatbots. Today, I’m pleased to announce the upcoming launch of our first “AI Futures Youth Council,” bringing together teens from the US and Europe to have their say on their future. We’ll share more about the application process soon.

We know that a critical precursor to providing young people positive and productive online experiences is understanding which users are young people. Around the globe, the debate over how to achieve age assurance online continues unabated. We have been grateful to work with CIPL and the WeProtect Global Alliance over the last year to explore how to achieve improved age assurance that is consistent with fundamental rights of privacy and access to information. As with any other safety intervention, our goal is to be proportionate and thoughtful where we take new steps, which is why we have focused on gaming in the first instance—reflecting the responsibilities we have to our youngest users and our ongoing commitment to player safety.

To inform our strategy and the broader policy conversation, we partnered with Praesidio Safeguarding to better understand youth perspectives on age assurance approaches across the UK, Ghana, and Indonesia. We are pleased to share that research today. The findings reinforce the importance of transparency, choice, and trust: teens want clear explanations of how their data is used, express concerns about exclusion where formal proof of age is lacking and show varying comfort levels with the use of biometric and behavioral data. Notably, young people value parental involvement but also highlight the need for independence and privacy as they mature. The results also highlight some of the important differences across geographies. For example, teenagers in Ghana often not only share devices with their families but may also share an account—underscoring a need for nuanced global approaches at multiple layers of the technology stack.

These insights underscore our belief that proportionality—matching safeguards to actual risks—is essential to building trust and empowering youth online. They also highlight the need for age assurance models that are inclusive, flexible, and respectful of youth autonomy—especially in global contexts where device and account sharing are common. We remain committed to ongoing dialogue and innovation, ensuring that our solutions evolve alongside the needs and expectations of children, families, and society at large.

Our policy recommendations: Empower young people to use technology safely

We believe technology should empower young people, not put them at risk. Given the diverse range of online services, it is important to remember there is no single “digital seatbelt” to protect and empower young people online.

We therefore offer the following recommendations as policymakers, regulators, and experts continue to discuss these issues, building on our 2024 blog:

• Avoid blanket access restrictions. Age assurance requirements that block full access to a service—except in limited cases like sites dedicated to age-restricted content (e.g., pornography)—can unintentionally limit child rights, such as access to information. Instead, age assurance should be applied at the service level, target specific design features that pose heightened risks, and enable tailored experiences for children.
• Focus on the highest risks for impact, such as content and features associated with documented harms to children, and as determined through democratic processes. Providers should take steps to assess and mitigate risks to children on their services, while ensuring documentation requirements or compliance obligations do not inadvertently undermine safety. A risk-based and proportionate approach—grounded in clear criteria and supported by interoperable standards—can also help ensure that age assurance is applied where most needed, without introducing unnecessary friction. Providers of high-risk services should bear the responsibility of age assurance.

• Strengthen safeguards for AI companions. Recent tragic events have highlighted the need for continued care in developing AI companions, especially where these may be used by young people. At Microsoft, we are building AI services for empowerment and want the right guardrails in place to protect all users but welcome new, commonsense measures such as those enacted in California and Australia to reduce the potential harms related to suicide and self-injury risks, as well as to sexualized or violent content. We will continue to work closely with researchers and experts to understand and mitigate potential risks to young people in this fast-evolving field.
• Incentivize age-appropriate design. Banning kids from online services isn’t the answer, but what constitutes an “age-appropriate” experience will vary. We have supported a duty of care approach to child safety where the duty can be implemented flexibly, guided by thoughtful and evidence-based regulatory guidance. Ongoing research and expert engagement are needed to understand how to advance child safety and rights on diverse services—not just social media.
• Protect the privacy and security of all users. Tailoring age assurance requirements will help enable proportionate approaches to data processing. Current proposals for age verification by app stores risk creating significant privacy risks by collecting sensitive information and sharing unnecessary age data with a wide variety of services while also not solving the challenges lawmakers want to address. We continue to support federal privacy legislation in the US and encourage global efforts to develop standards and certifications for age assurance providers. Trusted credential sharing can also increasingly be enabled by emerging digital identity ecosystems—including government-issued IDs and wallet-based models—that preserve mutual privacy between issuers and relying parties.
• Support, not overwhelm Our Global Online Safety Survey results show that while parents might underestimate the risks teens face online, teens are most likely to turn to a parent for help. Parents should not face a deluge of notifications nor bear the sole responsibility for safety but have access, awareness, and education on family safety tools that can help them make informed choices appropriate for their family and their values.
• Foster multistakeholder collaboration. We believe it’s essential to elevate the voices and perspectives of young people, as well as for regulators and industry to engage with civil society and partner to advance practical solutions. As child safety regulations come into force, it will also be important to get feedback from affected communities on where regulation may have adverse rights impacts, as well as to understand where harm may have been averted. Public education will be needed to help all users understand why their online experiences might be changing.

We will continue learning, listening, and collaborating, especially with our new Council, and look forward to sharing our insights.

 

 

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Artificial intelligence is transforming the way we work, learn, and innovate—and it’s doing so at a pace that surpasses every major technology before it. Microsoft’s inaugural AI Diffusion Report offers a comprehensive look at how AI adoption is accelerating worldwide, drawing on data from more than 100 countries. In less than three years, more than 1.2 billion people have used AI tools, a rate of adoption faster than the internet, the personal computer, or even the smartphone. This rapid diffusion underscores AI’s potential as a general-purpose technology but also highlights the urgent need to ensure equitable access.

The report introduces three indices—the AI Frontier Index, the AI Infrastructure Index, and the AI Diffusion Index—to help policymakers, researchers, and industry leaders understand where breakthroughs are happening, where capacity exists to scale, and where AI is being used to improve lives. These insights show that adoption is fastest where connectivity and digital infrastructure are strongest, while nearly four billion people still lack the basics needed to participate in the AI economy. Bridging this gap is essential to avoid deepening global divides.

Beyond the numbers, the report illustrates the need for collaborative action to expand access to digital infrastructure, strengthen skills development, and promote responsible AI policies. By investing in these foundational elements, governments and organizations can unlock AI’s potential for growth and innovation. The data makes clear that speed alone does not guarantee shared prosperity—broad accessibility does.

To explore the full findings and recommendations, read the AI Diffusion Report.

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To prepare the United Arab Emirates’ next generation for an AI-driven workforce, today we’re providing an update on our ambitious commitment to skill one million people across the UAE with an expansion of our global skilling initiative, Microsoft Elevate.

With Microsoft Elevate UAE we are making significant progress toward our goal with programs that will equip more than 250,000 students, staff, and faculty and more than 55,000 government employees with in-demand AI skills. Through sustained programs and new partnerships, Microsoft Elevate is providing advanced AI tools, in-demand credentials and comprehensive training to the region as we continue to work together to provide growth and opportunity for all.

As we shared earlier this week, Microsoft will invest USD 15.2 billion in the UAE before the end of this decade in a sustained commitment that brings together technology, talent, and trust to help the nation seize the opportunities of the AI era.

Together we will continue to ensure the region is uniquely positioned to harness this pivotal moment and remain at the forefront of AI use and innovation.

Advancing AI skills for the UAE’s next generation

As an update to our broader commitment to drive AI literacy and readiness across the UAE, Microsoft is announcing new partnerships with leading educational institutions and nonprofits to equip educators and students with essential AI skills and valuable credentials.

In close collaboration with the Ministry of Artificial Intelligence, Digital Economy, and Remote Work Applications over the next year, we will provide training for more than 30,000 educators and 70,000 students across the UAE to ensure technology adoption is broad-based and that students are equipped to become leaders in AI for the future. Moreover, our technical graduate skilling program will upskill Emirati graduates, empowering them with the expertise needed to develop and train future AI models.

Our work with GEMS, the largest private school provider in the UAE, is embedding AI skills into all its schools and expanding training programs for 10,000 teachers and 150,000 students. This includes custom-built AI agents, Copilot workshops, and AI fluency programs for teachers, administrators, and students. Because preparing the future workforce starts with skilling educators, we are also focused on AI teacher readiness, with Copilot and Learning Accelerator access for almost 10,000 teachers and students in private schools across the UAE.

Through partnerships with nonprofits like INJAZ UAE, we are delivering AI Fundamentals courses to the UAE. The Skills Spot platform hosts signature courses for students, educators, and developers, credentialing over 58,000 learners in foundational AI skills, digital safety, and practical applications.

And in higher education, Microsoft has partnered with leading UAE institutions to deliver impactful skilling programs that empower both students and educators. Through collaborations such as the partnership with MBZUAI, which was awarded a Microsoft Economic AI Institute research fellowship, Microsoft is advancing AI literacy and research in the region. Microsoft has also established agreements focused on training with the Higher Colleges of Technology and UAE University. These programs are designed to equip participants with cutting-edge knowledge in artificial intelligence and digital skills, fostering innovation and enhancing the competitiveness of the UAE’s academic community. By investing in these trainings, Microsoft is helping to build a robust talent pipeline that supports the nation’s vision for a knowledge-based economy and positions graduates and educators to thrive.

Credentialing 55,000 UAE government employees and empowering future leaders

Last year, Microsoft partnered with UAE government entities to launch an initiative to upskill 120,000 government employees across the Federal Government, Abu Dhabi, Dubai, and Sharjah.

Today, we are announcing the next phase in our goal to equip public sector teams with AI skills that will help transform services, drive innovation, and prepare the workforce for the future

In partnership with G42, we have developed three specialized courses for government employees, delivered through the JAHIZ platform to ensure federal workers have a front-row seat in advancing their skills. This ambitious upskilling initiative for UAE federal government workers is designed to provide both foundational knowledge and real-world applications of AI for the public sector, with the goal of credentialing 55,000 federal employees over the next year. This investment in human capital will help ensure the UAE’s government is equipped to lead in digital transformation and meet the challenges of tomorrow with confidence.

We also know that preparing leaders for the future means going beyond technical skills. That’s why we continue to offer high-impact, in-person leadership development programs for government executives, CEOs, and senior decision-makers. Developed last year in collaboration with INSEAD, these tracks focus on strategic thinking, digital transformation, and the responsible adoption of AI. By building leadership capacity and fostering innovation, we are helping government entities across the UAE embrace change and realize the full potential of AI for the benefit of all. To date, we have partnered with INSEAD and learning partners locally to train 1,200 senior leaders across the UAE government and are proud to continue this effort to help strengthen the UAE’s position as a global leader in responsible AI governance.

Microsoft Elevate: A promise to the UAE

As AI and digital transformation reshape the world, closing the digital divide and expanding opportunities for all require collaboration across government, education, civil society, and industry. That’s why skilling is at the core of our commitment.

The UAE stands out as a leader in AI adoption, according to Microsoft’s AI Diffusion Technical Report. Yet, a significant skills gap remains, with more than 40% of working-age adults not yet using AI in the region. Initiatives like those we announced today in partnership with the Ministry of Education and others will continue to help address these gaps—and we are not done.

At Microsoft, we look forward to continuing our three decades of partnership across the region and bringing our capacity-building programs to the UAE through Microsoft Elevate. Our work together with local partners is not just a program; it is a promise to support the nation’s vision, empower its people, and help create universal opportunity.

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At Microsoft, we are driven by the belief that technology has the power to create opportunity and growth for everyone. This conviction inspired the creation of TechSpark, a nationwide program designed to expand economic opportunity in local communities, bridge digital gaps, and ensure everyone can participate in the digital future.

As AI continues to accelerate innovation nationwide, today we welcome the 2026 TechSpark Fellows whose visionary organizations are at the forefront of harnessing AI and cloud technology to drive transformative impact and empower their communities throughout the United States. In addition to honoring these incredible individuals and organizations, today we also announce the expansion of the TechSpark Fellows program as we launch a new Alumni program, which together creates a national network of community innovators and leaders who share best practices, resources, and ideas to ensure their communities can leverage the power of technology to thrive.

Since launching the TechSpark Fellows program in 2023, Fellow organizations have joined forces with Microsoft to bridge digital divides and spark innovation. Collectively, these Fellow organizations have secured more than $249 million in follow-on funding, trained over 34,000 individuals in AI, data literacy, and emerging technologies, and built partnerships connecting public, private, and nonprofit organizations with new digital tools.

With the introduction of the new 2026 TechSpark Fellows cohort, we are proud to continue building on our tradition of driving meaningful impact across the nation. Today, a TechSpark Fellow or Alumni leader can be found in every single state, as well as in more than 11 Microsoft data center communities. This widespread presence ensures that our efforts to make a difference in local communities are closely connected with our ongoing investments in infrastructure technology. By maintaining this strong network of leaders, we can foster community impact and support the growth of technology initiatives hand in hand, ensuring that progress and opportunity reach even more people across the United States.

The TechSpark program has made a significant difference in communities from California to New Jersey, across Georgia to Tennessee, and many places in between. These efforts have resulted in the creation of more than 5,100 jobs, the training of over 72,000 individuals in artificial intelligence and digital skills, and the mobilization of more than $728 million in community funding to support local projects.

 Welcoming the 2026 TechSpark Fellows

Each year, Microsoft TechSpark Fellows are appointed by nonprofit or community organizations that apply through a national call for participation. Each organization then receives a grant to support and scale their mission and can participate in a robust, seven-month learning and development experience designed to advance AI skilling, innovation, and adoption to support opportunity within their community.

TechSpark Fellows from these organizations are already shaping projects that range from empowering women to reenter the workforce through AI upskilling to building rural digital academies to advancing youth coding and data science programs.  Below are just a few inspiring examples of this year’s TechSpark Fellows and the unique ways they are driving positive change in their communities:

The Illinois Science & Technology Coalition and Institute  

The Illinois Science & Technology Coalition and Institute is strengthening the job pipeline in Illinois by connecting high school students with industry mentors for months-long, hands-on projects that reflect real workforce needs. Students work directly with professionals, including Microsoft mentors, on challenges tied to current industry priorities, gaining the skills, confidence, and experience needed to pursue careers in STEM fields. Through participation in the TechSpark Fellows program, the Illinois Science & Technology Coalition and Institute aims to expand opportunities for more schools and students across Illinois—deepening industry partnerships, strengthening hands-on learning, and preparing young people for future careers in STEM fields.

Climb Wyoming  

Climb Wyoming transforms lives by helping low-income single mothers discover their full potential through integrated career training, mental health support, and meaningful employment with local employers. In Wyoming, single mothers and their children experience the highest rates of poverty in the United States, making Climb’s work both urgent and essential. The program provides immediate support and pathways to economic independence. On average, Climb graduates more than double their income two years after the program—a 121% increase in wages.  As a TechSpark Fellow, Climb Wyoming looks to learn how to leverage AI and digital skilling to enhance career training for the women they serve.

Compudopt Georgia 

 Compudopt is closing the digital divide for families nationwide by providing free laptops and comprehensive tech education programs, from first graders to seniors. In 2025, Compudopt celebrated reaching one million people, offering digital literacy training that empowers entire households to thrive in a connected world. As part of the TechSpark Fellows program, Compudopt wants to learn how  AI can further strengthen their mission, exploring new ways AI can enhance digital skilling, expand access, and help families unlock opportunities for work, learning, and daily life.

Building AI readiness for all

As we look to the future, we believe our responsibility is to continue to empower others and support their missions. The TechSpark Fellows program is just one way that we can leverage the power of technology and community to ensure that the promise of AI reaches every community across America. The progress made through TechSpark—helping leaders secure resources, equipping individuals with critical skills, and fostering innovation—demonstrates what’s possible when we work together.

The contrast in AI use across  the United States reveals not just a disparity in adoption but a fundamental challenge in ensuring that AI brings people together rather than widening existing divides. Achieving an inclusive  AI economy will require ongoing collaboration with local leaders, nonprofits, policymakers, and peers in the private sector.

TechSpark has shown that community and local leaders are the biggest assets in ensuring their home states, hometowns, and neighbors thrive. By listening deeply, partnering with purpose, and building strong connections with local changemakers, we can make certain that everyone has the tools, opportunities, and support to thrive in the AI era.

For more insights and resources, visit the TechSpark Playbook and the TechSpark Impact Report.

 

 

 

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As Abu Dhabi and Dubai kick off a significant week hosting annual energy and technology conferences, we want to share details of our ongoing and planned investments in the United Arab Emirates. Roughly two and a half years ago, we embarked on a new AI initiative with the encouragement and support of both the United States and UAE governments. Much of this progress has involved a new partnership with G42, the UAE’s sovereign AI company, with whom we’re making critical progress.   

All told, Microsoft will invest $15.2 billion USD in the UAE between the start of this initiative in 2023 and the end of this decade, in 2029. This is not money raised in the UAE. It’s money we’re spending in the UAE. And as we do everywhere in the world, we’re focused not just on growing our business but also on contributing to the local economy. This involves bringing together three critical factors – technology, talent, and trust.   

On some days, it feels like the tech sector is gripped in a rhetorical race to announce ever larger, sky-high numbers. We believe in moving fast while staying grounded and being transparent about our investment details. And we want to share our strong conviction that our investments benefit the shareholders of our company, the people of the UAE, and the relationship between our two nations.   

Our investment numbers  

Our $15.2 billion USD investment includes the following:  

• Beginning in 2023 and through the end of this calendar year, Microsoft will have invested and spent just over $7.3 billion in the UAE. This includes our $1.5 billion equity investment in G42, more than $4.6 billion in capital expenses in advanced AI and cloud datacenters in the country, and more than $1.2 billion in local operating expenses and the cost of goods sold.   

• From the start of 2026 to the end of 2029, we will spend more than $7.9 billion in the UAE. This includes more than $5.5 billion in capital expenses for ongoing and planned expansion of our AI and cloud infrastructure, including new steps we will share publicly in Abu Dhabi this week. It also includes almost $2.4 billion in planned local operating expenses and the cost of goods sold.  

An investment in world-leading technology  

Some of our most important work involves exporting world-leading technology from the United States to the UAE. This includes the GPUs essential to power AI in our datacenters across the country that support the UAE’s people and institutions.  

Microsoft was one of the few companies during the previous administration to secure export licenses from the Commerce Department to ship GPUs to the UAE. In no small measure, this is because of the substantial work we did to meet the strong cybersecurity, national security, and other technology conditions required by these licenses. These licenses enabled us to accumulate in the country the equivalent of 21,500 Nvidia A100 GPUs, based on a combination of A100, H100, and H200 chips.  

Microsoft was also the first company this year under the Trump administration to secure export licenses from the Commerce Department to ship GPUs to the UAE. Approved in September, these were based on updated and stringent technology safeguards. These licenses enable us to ship the equivalent of 60,400 additional A100 chips, in this instance involving Nvidia’s even more advanced GB300 GPUs.  

While the chips are powerful and the numbers are large, more important is their positive impact across the UAE. We’re using these GPUs to provide access to advanced AI models from OpenAI, Anthropic, open-source providers, and Microsoft itself. We’re supporting AI-enabled applications, including our Copilot applications, from a wide variety of local and international providers. And we’re partnering with G42 to support public and private sector organizations across the UAE economy, as well as consumers across the country.  

The UAE’s ranking in the Microsoft AI Diffusion Report published last week shows the country leading the world in per capita AI usage. With 59.4 percent of the population using generative AI, the UAE is ahead of Singapore, which is in second place at 58.6 percent. Beyond these two, no other country tops the 50 percent mark. Microsoft’s infrastructure challenge in the UAE is not a risk of getting ahead of demand but keeping pace with it.  

Investing in talent  

Microsoft’s investment in the UAE is not just about technology, it’s also about people. By cultivating AI talent and skilling individuals to develop, deploy, and use AI in a way that reflects the region’s unique needs, Microsoft is helping to ensure that the UAE remains on the leading edge of AI diffusion.  

Today, Microsoft’s presence in the UAE reflects this commitment. Our growing team includes almost 1,000 full-time employees and related staff representing 40 nationalities. Nearly 100 of our employees are engineers, supported by an Emirati partner ecosystem that has grown almost threefold in just two years, now with 1,400 firms employing nearly 45,000 professionals across the country.  

This year, we established the Global Engineering Development Center in Abu Dhabi to attract world-class tech talent to the UAE. Our engineers not only develop new products and services for Microsoft, but support institutions and businesses across the region so they can use AI and cloud technologies to transform their own operations. As we look to the future, we aspire to grow our engineering teams further and add a new focus on domain-specific AI models and applications that will propel advances in key scientific and technological fields.  

We also opened a new center for the Microsoft AI for Good Lab in Abu Dhabi, staffed by PhD level research talent specializing in large-scale AI models, vision-language models, and post training techniques. Backed by Azure compute grants allocated to partner organizations, this team collaborates with nonprofits, start-ups, researchers, academic institutions, and local businesses to address humanitarian challenges across the Middle East and Africa using AI. Already, the Lab has partnered with researchers to train large language models for low-resource languages, including those spoken in Malawi, Tanzania, Kenya, Uganda, and the Democratic Republic of the Congo – helping ensure that AI serves communities that risk being left behind in the AI age.    

As the Microsoft AI Diffusion Report underscores, people need digital proficiency to fully participate in an AI-driven economy. Without the right skills, AI risks deepening inequality rather than broadening opportunity. That’s why skilling is a core pillar of our investment in the UAE.   

Last November, we committed to skill one million people in the UAE by the end of 2027–and we’re well on our way to meet – and exceed–our goal. Last month at GITEX, Microsoft partnered with UAE government entities to launch an initiative to upskill 120,000 government employees across the federal government, Abu Dhabi, Dubai, and Sharjah. We will also skill 175,000 students and 39,000 teachers through collaborations with GEMS, Abu Dhabi Department of Education (ADEK), and the Knowledge and Human Development Authority (KHDA). We will announce new steps in this area on Thursday in Dubai.  

Talent is the engine of AI leadership. Attracting, nurturing, and building AI talent and know-how is essential to the UAE turning its vision of becoming a global leader into a reality.   

Strengthening trust   

Ultimately, the use of AI depends on trust. People and institutions need to trust that AI will be developed and deployed with responsible safeguards. They need to have confidence that the cybersecurity of AI chips, models, and services will be protected. And they rightly expect AI to serve the public broadly, with cause for optimism that AI will reach and support the Global South.  

Given the role of export controls and other trade issues, the flow of advanced GPUs and AI models also requires trust between nations. This in turn requires clear rules and agreements, coupled with effective compliance systems. And as always, trust between nations depends on strong relationships between its people, grounded in mutual respect and appreciation for each other’s cultures.  

We’re focused on supporting all these needs.   

One important part of this is the Responsible AI Future Foundation, or RAIFF. G42, Microsoft, and Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) founded this new foundation in Abu Dhabi in February to promote responsible AI standards and best practices in the Middle East and across the Global South. This foundation is advancing research on the technical and ethical elements of responsible AI and is developing frameworks to ensure ethical development and deployment of AI systems, accounting for cultural diversity.   

A second element comes to life through the first annual Abu Dhabi Global AI Summit, which began Sunday. Hosted by G42, Microsoft, the Responsible AI Future Foundation, and Eurasia Group’s GZERO Media, this Summit brings government ministers, private sector executives, and AI leaders together to discuss what’s needed to drive AI diffusion across the Global South. We meet at a time when there is a growing risk that uneven AI diffusion may widen the economic and societal gaps that divide the world. It’s imperative that governments, businesses, and non-governmental organizations collaborate and take new steps to promote broader access to AI.  

Both these elements build on a third and deeper initiative that Microsoft and G42 have advanced during the past two years. In conjunction with our $1.5 billion investment, Microsoft and G42 created last April a first–of–its–kind binding framework between two private companies. Developed in close consultation with the U.S. and UAE governments, this Intergovernmental Assurance Agreement (IGAA) ensures that both our companies meet or exceed U.S. standards in critical areas such as cybersecurity and physical security, export controls and technology transfer, data protection and responsible AI, and Know Your Customer (KYC) best practices.   

As we drafted the IGAA, we consulted not only leaders from government ministries in our two countries, but with members and staff of both political parties in both houses of Congress in Washington, D.C. We listened to feedback and adapted the IGAA to address their suggestions. And we’ve built a strong compliance infrastructure to implement these requirements based on industry best practices and auditing standards.   

All these steps help bolster mutual confidence and trust between our two governments. But trust between nations also grows through relationships among people. That’s why we’re advancing a fourth and new element this week, traveling to Abu Dhabi with a Seattle delegation of public and private leaders. The group includes a former Governor and local leaders in economic development, higher education, medical research, the non-profit community, and sports. The goal is to deepen understanding, exchange ideas, and explore solutions that can advance both regions.   

Looking to the future  

Microsoft is committed to the future of the UAE and a strong relationship between our two nations. We believe in the UAE’s long-term economic vision and the role the UAE and the U.S. continue to play together to support peace, stability, and growth across the Middle East.  

As we do everywhere we do business, Microsoft is committed to a broad perspective and long-term approach. Our work in the UAE has underscored the importance of connecting technology investments to initiatives to attract and develop the talent needed for a vibrant and self-sustaining tech ecosystem. And work to advance trust, which may seem peripheral to some, is in fact of central importance. From stronger business practices to broader international ties, trust is a critical catalyst for technology success at a local and global level.  

Technology is our business and we’re as excited as anyone by its potential. But we know that ultimately there is only one test that matters. It’s how our technology empowers others to achieve more. Like every public company, our shareholders rightly expect us to deliver value to customers in ways that enable us to continue to grow. But we also judge ourselves by whether we are generating local opportunities and growth that go well beyond ourselves. Across the UAE, we’re committed to passing this test.  

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AI has introduced a transformative era in scientific discovery. In the hands of researchers, innovators, and startups, it is accelerating breakthroughs from advancing medical research to powering new manufacturing capabilities and energy transitions.  

For Microsoft, the real promise of AI emerges when we bring our powerful tools together with problem solvers in local communities. For the past eight years, Microsoft has been sharing knowledge and collaborating with communities to unlock opportunity through Microsoft TechSpark, an economic development, skilling, and community-building program across the US. Since its inception, TechSpark has helped create more than 4,500 jobs and contributed more than $700 million in community funding to support local initiatives. 

Today, we’re announcing a new milestone in our TechSpark program: a pioneering partnership with leading innovation centers—TitletownTech, in partnership with the University of Wisconsin-Madison, and the New Jersey (NJ) AI Hub, in partnership with Princeton University. Together, we’re launching a new model for scientific collaboration that combines the agility of a startup, the expertise of a university, and the technology of a global company.  

Through this partnership, Microsoft will provide the Microsoft Discovery platform to TitletownTech and NJ AI Hub and access to the latest advancements in AI and high-performance computing that promise to accelerate scientific discovery. We believe this kind of alliance is essential to ensure that breakthroughs in science and solutions to global challenges are not confined to a few but shared broadly for the benefit of all.

A new model for scientific discovery 

Researchers and innovators from these organizations will have an opportunity to access Microsoft Discovery, an advanced agentic AI platform designed to accelerate scientific breakthroughs. They will also benefit from the expertise of the Microsoft Discovery and Quantum team, under the leadership of Jason Zander. Currently available only in private preview, this opportunity enables researchers to leverage state-of-the-art AI and high-performance computing to collaborate with a team of specialized AI agents combined with a graph-based knowledge engine to drive scientific outcomes with speed, scale, and accuracy. 

Through Microsoft Discovery, researchers can speed up scientific discovery by analyzing vast amounts of data, simulating experiments, and uncovering new materials and solutions more efficiently. The platform facilitates effective collaboration, bringing together teams of specialized AI agents and human experts for continuous, iterative investigation. This dynamic environment helps organizations refine their knowledge, learn from their results, and innovate in ways that were previously unimaginable. 

What makes this partnership unique is its focus on real breakthroughs in chemistry, life sciences, advanced manufacturing, and AI-driven innovation. Building on years of TechSpark collaboration, this initiative is not just another corporate research and development center or a one-off research grant. Instead, we are creating a shared undertaking, deeply rooted in engagement with local communities and aligned around the promise of AI. By blending the strengths of top research universities with the cutting-edge infrastructure of the NJ AI Hub and TitletownTech Labs and Microsoft’s role as an industry convener, we hope to set the stage for transformative progress. 

Collaborating for real-world impact 

While we are still in the early days of what’s possible, we are dedicated to discovering what can be achieved when our institutions work together to accelerate science and innovation.  

This technology could be a game-changer for environmental challenges like plastic waste. For example, Microsoft Discovery can enable modeling of complex chemical reactions, unlocking new pathways for catalyst design in recycling systems. This would enable more efficient, selective, and controlled recycling processes, fewer costly lab experiments, and faster innovation. In the future, advances like these could empower researchers to turn plastic waste into valuable resources. 

In Microsoft’s own labs, the integration of high-performance computing and AI into Microsoft Discovery is already unlocking new scenarios. For instance, our researchers used Discovery’s advanced AI systems and HPC capabilities to discover a novel sustainable coolant prototype for datacenter immersion cooling—moving from digital discovery to synthesis in just four months. 

Looking ahead 

We are putting the Microsoft Discovery platform into the hands of innovators, like those at TitletownTech and the NJ AI Hub, to fuel innovation and demonstrate real-world impact. 

In the coming weeks, we will work to enable access to Microsoft Discovery for these labs under the private preview, and as we roll out the Discovery platform availability to the public, we will continue to work with these partners and other researchers and universities to ensure we expand opportunity for scientific discovery through AI.  

It’s only with a strong ecosystem that we’ll be able to realize the full potential of Microsoft Discovery, and it’s why we’re working with these partners and others to bring first-party advancements together with leading industry tools and domain expertise. 

With this new chapter for our TechSpark partners, we reaffirm our commitment to championing innovation and discovery alongside the brilliant local innovators across Wisconsin and New Jersey. Together, we look forward to shaping the future of science for everyone.

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In 80% of the cyber incidents Microsoft’s security teams investigated last year, attackers sought to steal data—a trend driven more by financial gain than intelligence gathering. According to the latest Microsoft Digital Defense Report, written with our Chief Information Security Officer Igor Tsyganskiy, over half of cyberattacks with known motives were driven by extortion or ransomware. That’s at least 52% of incidents fueled by financial gain, while attacks focused solely on espionage made up just 4%. Nation-state threats remain a serious and persistent threat, but most of the immediate attacks organizations face today come from opportunistic criminals looking to make a profit.

Every day, Microsoft processes more than 100 trillion signals, blocks approximately 4.5 million new malware attempts, analyzes 38 million identity risk detections, and screens 5 billion emails for malware and phishing. Advances in automation and readily available off-the-shelf tools have enabled cybercriminals—even those with limited technical expertise—to expand their operations significantly. The use of AI has further added to this trend with cybercriminals accelerating malware development and creating more realistic synthetic content, enhancing the efficiency of activities such as phishing and ransomware attacks. As a result, opportunistic malicious actors now target everyone—big or small—making cybercrime a universal, ever-present threat that spills into our daily lives.

In this environment, organizational leaders must treat cybersecurity as a core strategic priority—not just an IT issue—and build resilience into their technology and operations from the ground up. In our sixth annual Microsoft Digital Defense Report, which covers trends from July 2024 through June 2025, we highlight that legacy security measures are no longer enough; we need modern defenses leveraging AI and strong collaboration across industries and governments to keep pace with the threat. For individuals, simple steps like using strong security tools—especially phishing-resistant multifactor authentication (MFA)—makes a big difference, as MFA can block over 99% of identity-based attacks. Below are some of the key findings.

Critical services are prime targets with a real-world impact

Malicious actors remain focused on attacking critical public services—targets that, when compromised, can have a direct and immediate impact on people’s lives. Hospitals and local governments, for example, are all targets because they store sensitive data or have tight cybersecurity budgets with limited incident response capabilities, often resulting in outdated software. In the past year, cyberattacks on these sectors had real-world consequences, including delayed emergency medical care, disrupted emergency services, canceled school classes, and halted transportation systems.

Ransomware actors in particular focus on these critical sectors because of the targets’ limited options. For example, a hospital must quickly resolve its encrypted systems, or patients could die, potentially leaving no other recourse but to pay. Additionally, governments, hospitals, and research institutions store sensitive data that criminals can steal and monetize through illicit marketplaces on the dark web, fueling downstream criminal activity. Government and industry can collaborate to strengthen cybersecurity in these sectors—particularly for the most vulnerable. These efforts are critical to protecting communities and ensuring continuity of care, education, and emergency response.

Nation-state actors are expanding operations

While cybercriminals are the biggest cyber threat by volume, nation-state actors still target key industries and regions, expanding their focus on espionage and, in some cases, on financial gain. Geopolitical objectives continue to drive a surge in state-sponsored cyber activity, with a notable expansion in targeting communications, research, and academia.

Key insights:

• China is continuing its broad push across industries to conduct espionage and steal sensitive data. State-affiliated actors are increasingly attacking non-governmental organizations (NGOs) to expand their insights and are using covert networks and vulnerable internet-facing devices to gain entry and avoid detection. They have also become faster at operationalizing newly disclosed vulnerabilities.
• Iran is going after a wider range of targets than ever before, from the Middle East to North America, as part of broadening espionage operations. Recently, three Iranian state-affiliated actors attacked shipping and logistics firms in Europe and the Persian Gulf to gain ongoing access to sensitive commercial data, raising the possibility that Iran may be pre-positioning to have the ability to interfere with commercial shipping operations.
• Russia, while still focused on the war in Ukraine, has expanded its targets. For example, Microsoft has observed Russian state-affiliated actors targeting small businesses in countries supporting Ukraine. In fact, outside of Ukraine, the top ten countries most affected by Russian cyber activity all belong to the North Atlantic Treaty Organization (NATO)—a 25% increase compared to last year. Russian actors may view these smaller companies as possibly less resource-intensive pivot points they can use to access larger organizations. These actors are also increasingly leveraging the cybercriminal ecosystem for their attacks.
• North Korea remains focused on revenue generation and espionage. In a trend that has gained significant attention, thousands of state-affiliated North Korean remote IT workers have applied for jobs with companies around the world, sending their salaries back to the government as remittances. When discovered, some of these workers have turned to extortion as another approach to bringing in money for the regime.

The cyber threats posed by nation-states are becoming more expansive and unpredictable. In addition, the shift by at least some nation-state actors to further leveraging the cybercriminal ecosystem will make attribution even more complicated. This underscores the need for organizations to stay abreast of the threats to their industries and work with both industry peers and governments to confront the threats posed by nation-state actors.

2025 saw an escalation in the use of AI by both attackers and defenders

Over the past year, both attackers and defenders harnessed the power of generative AI. Threat actors are using AI to boost their attacks by automating phishing, scaling social engineering, creating synthetic media, finding vulnerabilities faster, and creating malware that can adapt itself. Nation-state actors, too, have continued to incorporate AI into their cyber influence operations. This activity has picked up in the past six months as actors use the technology to make their efforts more advanced, scalable, and targeted.

For defenders, AI is also proving to be a valuable tool. Microsoft, for example, uses AI to spot threats, close detection gaps, catch phishing attempts, and protect vulnerable users. As both the risks and opportunities of AI rapidly evolve, organizations must prioritize securing their AI tools and training their teams. Everyone—from industry to government—must be proactive to keep pace with increasingly sophisticated attackers and to ensure that defenders keep ahead of adversaries.

Adversaries aren’t breaking in; they’re signing in

Amid the growing sophistication of cyber threats, one statistic stands out: more than 97% of identity attacks are password attacks. In the first half of 2025 alone, identity-based attacks surged by 32%. That means the vast majority of malicious sign-in attempts an organization might receive are via large-scale password guessing attempts. Attackers get usernames and passwords (“credentials”) for these bulk attacks largely from credential leaks.

However, credential leaks aren’t the only place where attackers can obtain credentials. This year, we saw a surge in the use of infostealer malware by cybercriminals. Infostealers can secretly gather credentials and information about your online accounts, like browser session tokens, at scale. Cybercriminals can then buy this stolen information on cybercrime forums, making it easy for anyone to access accounts for purposes such as the delivery of ransomware.

Luckily, the solution to identity compromise is simple. The implementation of phishing-resistant multifactor authentication (MFA) can stop over 99% of this type of attack even if the attacker has the correct username and password combination. To target the malicious supply chain, Microsoft’s Digital Crimes Unit (DCU) is fighting back against the cybercriminal use of infostealers. In May, the DCU disrupted the most popular infostealer—Lumma Stealer—alongside the US Department of Justice and Europol.

Moving forward: Cybersecurity is a shared defensive priority

As threat actors grow more sophisticated, persistent, and opportunistic, organizations must stay vigilant, continually updating their defenses and sharing intelligence. Microsoft remains committed to doing its part to strengthen our products and services via our Secure Future Initiative. We also continue to collaborate with others to track threats, alert targeted customers, and share insights with the broader public when appropriate.

However, security is not only a technical challenge but a governance imperative. Defensive measures alone are not enough to deter nation-state adversaries. Governments must build frameworks that signal credible and proportionate consequences for malicious activity that violates international rules. Encouragingly, governments are increasingly attributing cyberattacks to foreign actors and imposing consequences such as indictments and sanctions. This growing transparency and accountability are important steps toward building collective deterrence. As digital transformation accelerates—amplified by the rise of AI—cyber threats pose risks to economic stability, governance, and personal safety. Addressing these challenges requires not only technical innovation but coordinated societal action.

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