Today, Microsoft published its 2026 Environmental Sustainability Report. This report covers our fiscal year 2025, and measures progress against our 2020 baseline. You can read the foreword below and explore the report in its entirety here. 

As we enter a new era for AI, Microsoft’s environmental sustainability work is entering a new phase—defined not only by ambition, but by how we deliver in a period of rapid technological change. In our pursuit of becoming a carbon negative, water positive, and zero waste company that protects ecosystems, the context has evolved, and so must our approach. 

The global shift toward AI is reshaping economies, accelerating innovation, and becoming foundational to how technology is built and used. It is also increasing demand for the energy, water, land, and materials required to support that growth. As a company at the forefront of this transition, Microsoft has a responsibility to help ensure that technology strengthens, rather than strains, the systems and communities on which it depends. This imperative is reshaping the context for our work. 

We are approaching this moment with clarity and conviction. We believe AI can deliver broad societal, economic, and environmental benefits, but innovation at this scale must be matched by responsibility at the same scale. For Microsoft, this means designing, building, and operating infrastructure that is more efficient, more resilient, and more grounded in the realities of the communities where we operate. 

We do not see these dynamics as a reason to step back. We see them as a mandate to lead differently. That requires greater operational rigor, stronger integration across our sustainability priorities, and a sharper focus on durable outcomes for the local communities where we work and the global value chains that make our work possible. It also requires being transparent about where progress is advancing, where it is more difficult, and where new approaches are needed. 

The path forward will not be defined by simple tradeoffs or single solutions. It will depend on how effectively we align innovation with stewardship. The systems we build to support the future must also support the long-term health of the planet and the communities we serve. Our experience makes clear that this is possible, but only with even greater discipline, partnership, and a willingness to learn and adapt as conditions evolve. 

What this moment requires 

Our aim is to build technology that gives more than it uses. Lasting progress depends on how we build it and whether that growth strengthens the places where it takes root.  

This thinking is reflected in our Community First AI Infrastructure approach, which is helping shape a more integrated model for community partnership, responsible operations, and environmental performance as we grow. In this way, sustainability is not separate from growth; it is part of how responsible growth is defined. 

While AI infrastructure is driving demand for energy, water, land, and materials, sustainability solutions are not scaling fast enough to meet demand. This tension is real, and it is also productive. 

It is forcing sharper questions: Where do we need to move faster, invest differently, or rethink our approach? Which assumptions still hold, which ones need to evolve? Five years into this work, we have more operational data, more direct experience, and a clearer view of what measurable planetary progress actually requires. That perspective helps keep us focused on outcomes rather than attached to any single pathway. 

We want to be clear about what this means—and what it does not. It means being more precise about what sustainability requires for Microsoft, and more willing to refine our strategies as conditions change, data improves, and tradeoffs become clearer. It does not mean we are lowering our ambition. 

Progress amid growth 

Our results reflect both progress and pressure. As we scale the physical infrastructure required to power the AI economy, our emissions are shaped by the impact of that growth and the actions we are taking to manage it. 

The visual that follows illustrates this dynamic by comparing our reported emissions with a modeled view of where emissions may have been in the absence of four specific interventions: carbon free electricity, sustainable fuels, XBOX console efficiency, and Surface device decarbonization. While these examples represent only a portion of our emissions reduction efforts, they highlight an important lesson from our work to date: that well-designed, targeted interventions can deliver measurable progress even as demand for infrastructure continues to rise.

In FY25, we matched 100% of our annual global electricity consumption with renewable energy^[2]. Microsoft will continue to push for an expansive focus on adding all forms of carbon-free electricity (CFE) ^[3] to the grids where we operate, complementing and building on 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 we will continue to support this approach moving forward.

Our total emissions (Scopes 1, 2, and 3) increased 25% year over year, driven primarily by the expansion of our datacenter infrastructure and pausing our use of non-additional, unbundled renewable energy certificates as we prioritize investments that bring net new power to grids. While this decision increases our reported emissions in the near term, it enables us to increase the development of new CFE rather than relying on certificates alone. We believe this change will create more long-term sustainability benefits. Growth-related emissions pressure was expected. The more important signal is where that pressure is concentrated. 

Scope 3 remains the largest share of our footprint overall, but one of the clearest changes this year was the growing contribution of Scope 2, which represents 13% of our total emissions—up from nearly 2% last year. This development highlights how important the energy systems across our supply chain are in shaping environmental outcomes. 

This year’s results also made clear that progress now depends on adapting how we work. 

Water is one of the clearest examples. In FY25, we replenished for the first time more water globally than we withdrew—more than 14 million cubic meters—marking a major milestone on our journey to become water positive. Reaching this point reflects years of work to improve water efficiency, expand replenishment efforts, and scale partnerships around the world. 

We are proud of this achievement but also know that replenishing global volumes is not enough. The next phase of our work is increasingly local. As we move forward, we are placing greater focus on helping restore more water to the watersheds where we operate than we withdraw while strengthening long-term water resilience. We prioritize projects in water-stressed regions that are locally relevant and designed in partnership with communities, delivering benefits not only for water availability, but also for ecosystems, economies, and people. Through this approach, we aim to ensure our growth supports and helps sustain the communities and environments where we operate. 

Transparency remains central to how we work and how we report. Microsoft has eliminated nearly all single-use plastics in our primary product packaging, reducing the share that remained to just 0.07% at the end of calendar year 2025.^[4] But we are not rounding down. We are staying accountable to the work required to eliminate them entirely. 

Across our cloud operations, we achieved 92% reuse and recycling of decommissioned servers and components for the second consecutive year, diverted 90.5% of construction and demolition waste from landfills and incinerators, and expanded our Circular Centers to seven facilities globally. These results also reflect a broader shift toward solutions that have co-benefits—reducing both emissions and resource demand over time. 

Throughout this journey, we have learned that progress in one area often depends on progress in another. Clean energy investments are essential to decarbonization. Water use is linked not only to our operations, but also to the energy systems that power them. And extending hardware life through circular approaches can reduce both emissions and material demand across the value chain. 

That is why our priorities extend beyond tracking progress against individual commitments on water, carbon, waste, and ecosystems as though they move independently. Our experience has made clear that progress does not happen pillar by pillar. Some of the most consequential work ahead will be measured in whether we address system challenges and help build the conditions for long-term progress: more resilient grids, stronger markets for lower-carbon materials, more effective water stewardship, and infrastructure designed and operated with local realities and community priorities in mind. 

For that reason, this year’s report takes a more integrated approach—placing progress against our commitments in the broader context of how those commitments are operationalized across our infrastructure and products. 

What’s next 

We are proud of what we have accomplished, and we remain humbled by the scale of the challenge ahead. Responsibly building the AI future requires clear accountability for what AI demands, candor about real constraints and tradeoffs, and sustained focus on outcomes that are durable and broadly shared. The chapters that follow show how we translate that intent into execution across our physical infrastructure, products, and value chain—where our sustainability commitments become operational reality.

Read the full report: https://aka.ms/SustainabilityReport2026 

[1] The solid line represents Microsoft’s reported greenhouse gas emissions (Scopes 1, 2, and 3) for FY20–FY25, prepared in accordance with GHG Protocol and management’s criteria, and uses a market-based emissions approach. The dotted line represents an illustrative counterfactual scenario of estimated emissions had select, discrete carbon reduction initiatives not been undertaken. These initiatives include energy efficiency improvements for XBOX consoles, renewable energy purchases, sustainable aviation fuel (SAF) and sustainable marine fuel (SMF) certificates, and supply chain decarbonization of Surface devices. The difference
between the two lines is an estimate of emissions avoided through these specific initiatives relative to a scenario without those initiatives occurring. This estimate is directional in nature, does not represent the full scope of Microsoft’s decarbonization efforts, and is not part of our reported greenhouse gas inventory. It should not be interpreted as a comprehensive measure of total emissions reductions or as additive to other carbon reduction or removal claims.

[2] Microsoft defines renewable energy as electricity that comes from sources that are replenished at a rate greater than or equal to their rate of depletion, such as geothermal, wind, solar, hydro, and biomass. 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.

[3] Microsoft defines carbon-free electricity (CFE) technologies as technologies with zero direct emissions and biogenic technologies with lifecycle emissions equivalent to renewables. CFE technologies include wind; solar; geothermal; sustainable biomass; hydropower; nuclear; fossil fuels with complete carbon capture, utilization, and sequestration; and storage charged with CFE generation.

[4] By weight, as designed, portfolio average. More details can be found in our Environmental Data Fact Sheet.

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In armed conflict, a simple symbol can save lives. The Red Cross, Red Crescent, and Red Crystal emblems signal that those providing medical care and humanitarian assistance must be protected. 

In cyberspace, there is not yet a widely adopted equivalent, even as hospitals, humanitarian organizations, and relief operations increasingly rely on digital systems to deliver care, coordinate assistance, protect sensitive data, and reach people in crisis. 

Today, the digital systems that support hospitals and humanitarian operations—including communications tools, logistics platforms, patient care systems, cloud services, and the data center infrastructure which underpins them—can be difficult to distinguish from surrounding digital infrastructure. In conflict, that raises the risk of misidentification, spillover, and cascading disruption from cyber operations. As cybersecurity operations become more automated and machine-driven, clear, trustworthy, machine-readable signals become even more important.

That is why Microsoft supports the International Committee of the Red Cross as it launches the next phase of the Digital Emblem initiative today in Geneva. The Digital Emblem is intended to provide a machine-readable way to help identify digital assets that support protected medical and humanitarian functions, so they can be recognized, verified, and avoided in conflict settings.

From principles to operational practice

The Digital Emblem does not create new legal protections, and it does not replace cybersecurity. Instead, it helps to make existing protections under international humanitarian law more actionable in cyberspace. 

For many years, governments, humanitarian actors, civil society, technical experts, and industry have worked to clarify how international law applies in cyberspace. These efforts have reinforced a core principle that civilians, medical services, and humanitarian operations must be respected and protected in armed conflict. But translating that principle into operational reality remains difficult when protected digital assets are not easily identifiable. 

The Digital Emblem can help bridge that gap. If implemented responsibly, a clearer, more consistent, and technically usable signal can support recognition, verification, and respect for protected medical and humanitarian functions in cyberspace. 

This next phase marks an important transition for the Digital Emblem: from concept development toward operationalization, testing, standards, and implementation. 

Over the past several years, the ICRC has worked with states, the Red Cross and Red Crescent Movement, technical experts, standards bodies, academia, and industry to explore whether the protective function of the physical emblems can be translated meaningfully into cyberspace. That work has helped move the Digital Emblem from an important idea to a project with growing legal, technical, and operational foundations. 

The work now is to test how the Digital Emblem can be deployed, discovered, authenticated, and verified in real-world conditions. It also means advancing standards work through bodies such as the Internet Engineering Task Force and the International Telecommunication Union, developing guidance for those who operate protected digital infrastructure, and engaging the actors who will need to recognize and respect the Digital Emblem in practice.

Building on Microsoft’s work to protect civilians in cyberspace

Across our cybersecurity work, we have consistently argued that protecting civilians and critical services in cyberspace requires more than statements of principle. It requires practical standards, technical implementation, trusted partnerships, and cooperation among governments, humanitarian actors, civil society, standards bodies, and industry. 

From our early calls for stronger norms of responsible state behavior in cyberspace, to the launch of the Cybersecurity Tech Accord, Microsoft has advocated for the application of international law and the protection of civilians online. 

Every day, Microsoft works alongside governments and partners to detect, disrupt, and defend against cyberattacks that target critical infrastructure, healthcare, and humanitarian operations. Together, we have seen the importance of real-time visibility, trusted signals, and coordinated defense across public and private actors. This work has underscored a central reality: as civilian and humanitarian services become more digitally dependent, cybersecurity is increasingly connected to humanitarian resilience. 

Microsoft will continue supporting the ICRC with a focus on how our technologies enable this model at scale. That includes exploring how technology can support both sides: enabling humanitarian and medical organizations to signal protected systems and helping defenders recognize and verify those signals in real-world operations.

The role of industry

The ICRC’s leadership is essential to the credibility and neutrality of this effort. But for the Digital Emblem to succeed, it must also work across the broader technology ecosystem, which includes the cloud services and data centers, telecommunications networks, cybersecurity tools, identity systems, and other digital infrastructure on which humanitarian and medical organizations increasingly rely.

Industry, therefore, has an important role to play in helping ensure the Digital Emblem is technically sound, interoperable, and aligned with how defenders operate in practice. That includes supporting standards development, helping test implementation models, and ensuring that any approach reflects both sides of the model: enabling eligible humanitarian and medical organizations to express the signal for relevant assets and helping defenders recognize and verify that signal in operational workflows. 

In today’s fragmented and low-trust geopolitical environment, shared technical standards can reduce ambiguity even where political agreement is difficult. That is why standards-based implementation can help make the Digital Emblem consistent, verifiable, and usable across networks, platforms, and borders.

From launch to implementation 

The launch in Geneva marks an important milestone, but the Digital Emblem’s promise will depend on what happens next. 

The work ahead should focus on clear and concrete outcomes: continued technical testing, progress in standards development bodies, practical implementation guidance, and broader engagement from states, humanitarian actors, technology companies, telecommunications providers, cybersecurity professionals, and operational defenders. 

The call to action is straightforward. Governments should support the Digital Emblem as a mechanism for making protected humanitarian and medical functions more identifiable in cyberspace and promote respect for it in policy and practice. Humanitarian and medical organizations should help test and shape implementation so it reflects operational reality. Standards bodies should continue building the technical foundations for trusted adoption. And technology companies should help translate the Digital Emblem into the tools, systems, and workflows defenders already use. 

Physical emblems made humanitarian protection visible on the battlefield. The Digital Emblem can help make protected humanitarian and medical functions visible, verifiable, and actionable in cyberspace. Turning that promise into practice will require sustained cooperation so that those who care for the wounded, the sick, and civilians can be more easily recognized, respected, and protected in the digital age. 

 

 

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The AI Economy Institute (AIEI) is launching its third cohort of researchers, advancing our mission to understand the adoption of artificial intelligence across economies, industries, and communities. 

We launched the AI Economy Institute because AI’s economic impact is not predetermined. Though AI is being rapidly adopted, the evidence base for understanding its impact on work, jobs, education, productivity, and opportunity is still too thin. By increasing the scholarship around the AI economy and producing it in a timely and accessible way, we can help ensure that as AI transforms our world, we’re equipping people with the knowledge and tools they need to make decisions and succeed with AI.

Our 2026 AI Economy Institute Cohort

The AI Economy Institute convenes outside experts and researchers to share their perspectives and advance the body of knowledge on topics related to AI, work, and education. Our third global research call centered on understanding how frontier firms are reshaping work and the broader economic landscape.  

Representing a diverse group of institutions worldwide, our cohort brings together subject matter experts and researchers to explore how AI is reshaping the workforce, organizations, and the broader economy. The cohort consists of the following individuals, representing the following institutions:    

• Brian Jabarian, Carnegie Mellon University 
• Caspar David Peter, Erasmus University, Rotterdam, Netherlands 
• Christoph Siemroth, University of Essex, England 
• Daniel Yue, Georgia Institute of Technology 
• Edoardo Maria Acabbi, University of Mannheim, Germany 
• Frank Nagle, Massachusetts Institute of Technology (Advising Fellow and Cohort 2) 
• Friederike Mengel, University of Essex, England; Erasmus University Rotterdam, Germany 
• Gianmarco Ottaviano, Bocconi University, Italy 
• Ilan Strauss, AI Disclosures Project 
• Johannes Wachs, Corvinus University, Budapest, Hungary 
• Luca Henkel, Erasmus University, Rotterdam, Netherlands 
• Luca Mazzone, University of Montreal, Canada 
• Laura Nurski, Centre for European Policy Studies (CEPS), Belgium (Cohort 2) 
• Meeyoung (Mia) Cha, Korea Advanced Institute of Science and Technology (KAIST), South Korea 
• Mustafa Afacan, Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), United Arab Emirates; Sabancı University, Turkey (World Bank Affiliated Senior Fellow) 
• Nataliya Wright, Columbia University 
• Nuriye Melisa Bilgin, Koç University, Turkey 
• Pëllumb Reshidi, Florida State University 
• Pierre-Alexandre Balland, Centre for European Policy Studies (CEPS), Belgium (Advising Fellow and Cohort 2) 
• Salman Khan, Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), United Arab Emirates (World Bank Affiliated Senior Fellow) 
• Serena Booth, Brown University 
• Wesley Rosslyn-Smith, University of Pretoria, South Africa (Advising Fellow) 
• Yingfei Wang, Foster School of Business, University of Washington 

Cohort members will analyze frontier firms to examine both upstream, firm-level transformations and downstream, economy-wide impacts. Researchers will also explore how AI changes job design, skill demands, productivity, and regional economic development.  

AIEI’s first two cohorts explored how AI is reshaping the talent pipeline, from higher education and skills to K-12, community colleges, and early-career pathways, so that we could understand and inform the early changes to the labor market. What we learned from that point of inquiry shifted the focus; this year’s cohort moves further into the economy itself, focusing on frontier firms and how leading organizations are adopting AI, redesigning work, and creating the conditions for productivity, diffusion, and human agency at scale.

Interpreting the frontier: What this means for policy and strategy  

Since its launch, the AI Economy Institute has fielded more than 800 responses to our calls for research proposals. The gap between what AI systems can do and what organizations can actually deploy will shape the pace of adoption. Gains in productivity may come alongside organizational shifts as firms adapt their workflows, teams, and decision-making processes.

At the same time, the expansion of automation raises a parallel question of whether systems are enhancing human learning or displacing it. Underlying all of this is a broader uncertainty about the extent to which AI will diffuse widely across economies or concentrate in a narrow set of firms and regions. 

Cohort 3 moves beyond identifying these tensions and toward generating the empirical evidence needed to navigate them, providing policymakers, firms, and institutions with a clearer basis for decision-making in a rapidly evolving AI economy. 

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Today we’re publishing our first “Public Country-by-Country Report” for our fiscal year 2025, disclosing our taxes in the period from July 1, 2024, to June 30, 2025. It covers the countries and regions included under European Union rules and shows, for each one, our revenue, profit, number of employees, and income tax accrued and paid during the year.  
 
We have provided this kind of information directly to tax authorities for several years under the Organization for Economic Cooperation and Development (OECD) framework. It is now published to support transparency commitments, and we believe it is important to proactively address any questions these disclosures may raise, recognizing that numbers on a spreadsheet rarely tell the full story.
 
Microsoft pays the taxes we owe in every country where we operate. We know there are strong views about whether companies are paying enough, and we believe providing this context leads to a more informed conversation.

Understanding country-by-country reporting

Country-by-country reporting is not widely understood outside tax and accounting circles. Some figures may look surprising at first, but a number that appears low or high in one country does not, on its own, tell the full story. Tax law differs from country to country, and there are two important things to keep in mind when reading the report.  

First, the numbers are prepared using rules that differ from United States or country-specific financial accounting and tax rules, so they may not match other Microsoft information people have seen. For example, this report combines all Microsoft legal entities in a country and follows the reporting rules required by EU regulations. By contrast, local statutory accounts usually cover just one legal entity, follow local accounting rules, and may use a different fiscal year from Microsoft’s.  

Second, accrued tax is what you owe for the year. Tax paid is the amount actually paid during the year. The two can differ because the timing of owing tax and paying tax doesn’t match exactly. 

France is a good example of why a single line can look unusual without context. In FY25, cash tax paid in France reflects a one-time refund of tax overpaid in an earlier year. That makes this year an outlier. In this specific case, accrued tax may be a better reflection of the taxes borne for the fiscal year. Microsoft paid $374 million in tax in France over the prior three years. 

Variations like these are a normal part of how large companies, both domestic and multinational, are taxed across borders, and they reflect an evolving tax landscape as well as a business that continues to change. We comply with every local rule that applies to us, and as those rules change, our reporting will change with them. Microsoft is committed to a tax structure that reflects where our people work, where we invest, and where functions, assets, and risks occur, and this has been a guiding principle. 

How our investments support local economies

We understand that this discussion is not only about what the law requires or what a single tax line shows in a given year. For many people, it is also about a broader question of contribution: how companies support the countries where they do business. That contribution includes the taxes we pay, the capital we invest, the local jobs and infrastructure we support, and the economic activity created through customers and partners. In the S&P, Microsoft ranks second globally in corporate income taxes paid in the last year, with a total of $28.7 billion. In fiscal year 2025, we paid $6.3 billion in income tax in the EU. Importantly, this does not include payroll, VAT, property, and other taxes paid in addition. 

Taken together, our tax payments, capital investments, and partner ecosystem reflect a long-term commitment to the countries where we operate. We opened our first European office in the UK in 1982, followed by France and Germany in 1983, and then expanded into Denmark, Ireland (our largest hub in the region), Italy, Norway, Spain, and Sweden in 1985. Microsoft is now present in all 27 EU Member States and across the broader region. We have worked in these and many other communities for decades, and thousands of our employees call them home.  

From research and development to digital infrastructure and partnerships with local organizations, we are investing in ways that support these economies beyond our direct commercial activity. At our core, we are building tools that help large enterprises, small and medium-sized businesses, institutions, and individuals become more productive and competitive, which strengthens their business and benefits the people they serve. We only do well when our customers do well. In practice, that means helping customers design and manufacture cars better, helping patients get their next appointment sooner, or making it simpler for someone to find that dream job. 

Our investments in digital infrastructure are not only supporting the local digital economy, they are also contributing meaningfully through both taxation and capital expenditure. Across markets, we continue to invest at scale in datacenters and supporting infrastructure, creating value that extends well beyond the technology sector. In the three years to June 30, 2025, our total capital expenditure amounted to $176 billion, and we spent $89.2 billion on research and  development in the markets where we operate. 

Our customers require local industry- and country-specific expertise, and this is where our partner ecosystem plays an important role. Many of these partners are local businesses themselves. A 2024 IDC study on partner profitability showed that for every $1 of Microsoft revenue, partners that provide services generate $8.45, and partners that develop software generate $10.93. While this varies by country and partner segment, it offers another useful lens on how Microsoft’s business contributes to local economic activity. 

Investments in digital infrastructure are not only investments in technology ecosystems, but in national and local economies as well. They support jobs, strengthen supply chains, create opportunities for companies across many sectors, and help build the foundation for growth and economic competitiveness beyond the digital economy. 

That is the broader context for this report. Tax is one important measure of contribution, but it is not the only one. Our investments, partnerships, infrastructure, and long-term presence in countries around the world also reflect a commitment to helping strengthen the economies and communities where we operate, today and for the future.

 

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At Microsoft, we are committed to our customers’ fundamental right to privacy. In a world defined by rapid technological change and geopolitical volatility, this commitment has remained constant. It’s rooted in decades of experience building trusted technologies that our customers rely on every day to manage their data. Many of these organizations depend on the ability to move data across the Atlantic, from the EU to the U.S., in a way that protects their privacy. That’s why we support the European Commission in its defense of the EU-U.S. Data Privacy Framework. And that’s why we have formally intervened in the Latombe v. Commission case before the Court of Justice of the European Union. This case puts at stake two principles that are important for Microsoft – the protection of our customers’ privacy and their ability to do business on both sides of the Atlantic.

To intervene in a case before the Court of Justice, a company must apply for permission. In this case, the Court granted our application, finding that Microsoft has a direct and existing interest in its result. Put simply, the outcome of this case will determine whether Microsoft and its enterprise customers may continue to use the EU-U.S. Data Privacy Framework to transfer data to participating U.S. companies, including vital customers and suppliers. This critical legal bridge promotes stability, beneficial trans-Atlantic ties, economic growth, and prosperity, while upholding strong privacy safeguards. The Latombe case seeks to dismantle it. As an intervener, we can now file legal briefs in support of the European Commission, participate in oral hearings, and share our perspective on the importance of upholding a framework that directly benefits the European economy.

Supporting the European Commission’s adequacy decision on the EU-U.S. Data Privacy Framework before the Court of Justice of the European Union

Companies across the globe rely on data flows to manage their people, produce their goods and services, and distribute products to their customers. We understand that data flows trigger questions about differences in legal traditions. They should. And for that reason, the European Commission and the U.S. administration worked diligently, in the decade since the Safe Harbour ruling, to harmonize EU and U.S. law. As a result of that hard work, and as required under the European General Data Protection Regulation (GDPR), the U.S. has now created an independent review court for any complaints regarding U.S. surveillance and implemented other required measures to provide an “adequate” level of data protection that is essentially equivalent to that in the EU.

This equivalence is a key point. The law entitles our customers to privacy on both sides of the Atlantic. This is the principle on which the Data Privacy Framework rests. And our intervention in the Latombe case is just one part of a long history in which we have stood up for that principle in Europe, as well as in the U.S. As far back as 2014, Microsoft challenged the FBI’s secret attempt to use its national security authorities to obtain information about an account that belonged to one of our enterprise customers. After we filed the case, the FBI withdrew its request. In 2016, we sued the U.S. government to challenge its practice of seeking indefinite secrecy orders—i.e., orders that prevented Microsoft from ever notifying its enterprise customers when the government sought their data. As a result of that case, the U.S. Department of Justice changed its policy to place strict limits on the duration of secrecy orders. In the decade since that first constitutional challenge, we’ve launched a series of successful court challenges to ensure that secrecy orders, of any duration, are the exception, not the rule. As a result of our litigation, numerous secrecy orders have been vacated or modified to allow notification to our customers.

We don’t confine our advocacy to courts. We are a steadfast proponent of strong privacy regulation on both sides of the Atlantic. That’s why we are specifically pushing Congress to update the U.S. Electronic Communications Privacy Act to place stricter limits on the use of secrecy orders and ensuring they are subject to meaningful judicial review. This legislative reform is gaining momentum in Congress and will greatly enhance our continued ability to protect our customers’ data.

Stable and trusted data transfers are not an end in themselves. They are a means to enable innovation, economic opportunity, and public services—while upholding the fundamental rights that are at the core of EU and U.S. law. Our intervention in the Latombe case reflects that principled balance and follows a long line of legal actions we have taken to protect our customers.

Looking ahead

At Microsoft, we have long recognized that trust is not a given—it is earned through sustained action, thoughtful design, and a willingness to engage openly with governments, customers, and individuals. Microsoft has consistently advocated for strong, clear, and globally interoperable privacy frameworks, recognizing that trust in technology depends on the strength of the rules that govern it.

Our customers in Europe can rely on us to continuously improve and update our privacy practices as technology and legal standards evolve. In 2018, we were the first major technology company to extend GDPR subject matter rights to all our customers around the world. And recent positive assessments of our privacy compliance by the European Data Protection Supervisor and the Hessian DPA in Germany underscore our continuous commitment to our customers’ fundamental right to privacy.

In support of this work, we’ve updated the Microsoft Privacy Statement to use clearer structure, simplified language, and more precise explanations of our data practices—making it easier to understand what data we collect and how it’s used, without changing our underlying privacy protections or commitments.

The future of technology will be shaped not only by what we build, but by the principles that guide us. By grounding innovation in respect for people and organizations, and strong legal protections, we can help ensure that technology continues to be a force for good.

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Microsoft is taking a new approach to fighting cybercrime, targeting the cyberattack supply chain, not just individual services. In a case unsealed today, we are simultaneously targeting two widely used cybercrime tools, Amadey and StealC, after AI-assisted analysis revealed they rely on the same infrastructure.

This action goes after the cybercrime “assembly line,” where coordinated tools drive ransomware, financial fraud, and disruptions to public services. Amadey and StealC are often used alongside each other: Amadey helps attackers gain access to devices, while StealC steals passwords and sensitive information. Together, they form a critical link in the chain. In the first two weeks of May alone, Amadey and StealC were linked to more than 140,000 infected computers globally, highlighting how widely they are used.

Working with Europol and industry partners, we targeted both tools at once. The goal: break the chain. Since the start of the operation, Microsoft has identified more than 18,000 victim computers, severed criminal control of those devices, and is working with telecommunications providers to help protect affected customers globally.

When multiple parts of an operation are disrupted together, attacks are harder to launch, scale, and recover from. The result: fewer disrupted services, fewer opportunities for cybercriminals to profit, and more friction when they try to rebuild.

It’s no longer enough to go after threats one by one. We need to interrupt how the attacks are put together. 

What’s different about this action   

Microsoft has long used civil legal action to disrupt cybercriminal infrastructure and pioneered the innovative use of existing laws, including the Racketeer Influenced and Corrupt Organizations Act (RICO), a US law designed to target organized crime.

What’s new is how we’re combining AI analysis with an expanded use of that law.

Amadey and StealC were developed by separate cybercriminals, but they relied on the same infrastructure. To understand how they worked, investigators used AI, including Copilot, to quickly analyze the malware, asking questions in plain English instead of manually combing through complex code. That helped surface key details, uncover hidden data, and test findings in a fraction of the time, turning what would have taken hours or days into minutes and enabling the team to spot connections faster.

Those insights allowed the legal team to treat both malware families as part of a single conspiracy. Instead of going after each tool separately, as we have done in the past, we used RICO to charge multiple complicit enablers involved across the operation. In total, Microsoft’s Digital Crimes Unit disrupted over 200 command-and-control servers—the systems criminals use to control infected devices, steal data, and keep attacks running.

By targeting tools together, we can disrupt the cybercrime chain more efficiently and more effectively, in a way that better reflects how these networks actually operate today.

Cybercrime now runs like an assembly line 

Cybercrime is no longer a series of isolated attacks—it’s a coordinated system.

Specialized tools handle each step: one gains access, another steals credentials, and others sell or exploit that access for fraud, ransomware, espionage, or other nefarious purposes. Different actors may be involved at each stage, but together they turn access into profit, quickly and at scale.

That structure also creates a point of vulnerability. The people behind these cybercriminal tools may never interact directly, but their tools are designed to work together. If those connections can be identified, multiple stages of an attack can be disrupted at once.

How these attacks play out in the real world 

Most people will never hear the names Amadey or StealC, but they feel the effects. A hospital locked out of critical systems. A city unable to deliver essential services. A small business losing access to accounts overnight. A retiree who lost their life savings.

These attacks don’t happen all at once. They unfold step by step: attackers get in, passwords are stolen, access is reused or sold, and sometimes repurposed for more targeted operations. For example, Microsoft has observed Russian-affiliated actor Secret Blizzard leveraging Amadey infections to deploy custom malware against targets in Ukraine.

By targeting multiple points in that chain at once, we reduce the chance that a single compromise turns into widespread harm. Put simply: fewer attacks succeed and fewer people feel the impact when they do.

No one organization can do this alone 

Actions like this underscore a fundamental reality: we’re successful when we collaborate. No single organization, whether government or industry, has full visibility into how cyber threats operate across borders and sectors. What makes this effort effective is the combination of perspectives and data.

Microsoft had been tracking Amadey due to its impact on customers, working with cybersecurity partners ESET, BitSight, Lumen, and Mitsui Bussan Secure Directions (MBSD) to better understand how it operated. At the same time, Europol’s European Cybercrime Centre (EC3), together with European law enforcement partners including Germany’s Federal Criminal Police Office and the Dutch and Danish National Police, was investigating StealC as part of Operation Endgame, alongside IBM X-Force and Proofpoint.

Bringing those efforts together expanded our collective datasets and made it possible to identify the connections between the two tools and act on them quickly. That shared understanding enabled a coordinated response that went further than any single organization could achieve alone.

 

This shows why partnerships matter. Industry shares technical insight, government brings visibility, and we need trusted ways to exchange that information. Only by working from the same picture can we stay ahead of attackers, disrupting not just individual tools but also the systems that make cybercrime possible.

Creating sustained pressure on cybercrime  

This work doesn’t end with a single action. Cybercriminals adapt quickly, which is why we continue tracking how these operations evolve and working with partners to disrupt them.

Microsoft’s court-authorized disruption in this case is paired with ongoing efforts to track how cybercriminals rebuild, identify new infrastructure, and work with partners to disrupt the services they rely on to operate. It also includes incorporating the findings from this disruption into initiatives like Microsoft’s Statutory Automated Disruption program, which helps accelerate the removal of malicious domains and infrastructure.

The goal is not just to stop one operation but to slow the system itself—making attacks harder to launch, scale, and recover from. By combining AI-driven insight, legal action, and strong partnerships, we can continue to raise the cost of cybercrime and reduce its impact.

For more than a decade, Microsoft’s Digital Crimes Unit (DCU) has worked to disrupt cybercrime and nation-state threats, filing around 40 cases since 2008 and partnering with law enforcement to take down criminal networks. Learn more about the team’s efforts here.

 

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