2020–present: Acquisitions, Xbox Series X/S, and Windows 11
On August 5, 2020, Microsoft stopped its xCloud game streaming test for iOS devices. Apple imposed a strict limit on "remote desktop clients" which means applications are only allowed to connect to a user-owned host device or gaming console owned by the user. On September 21, 2020, Microsoft announced its intent to acquire video game company ZeniMax Media, the parent company of Bethesda Softworks. On March 9, 2021, the acquisition was finalized at $8.1 billion and ZeniMax Media became part of Microsoft's Xbox Game Studios division.
On November 10, 2020, Microsoft released the Xbox Series X and Xbox Series S video game consoles.
In February 2021, Microsoft released Azure Quantum for public preview. The public cloud computing platform provides access to quantum software and quantum hardware including trapped ion, neutral atom, and superconducting systems.
In April 2021, Microsoft announced it would buy Nuance Communications for approximately $16 billion, completing the acquisition in March 2022. In 2021, in part due to the strong quarterly earnings spurred by the COVID-19 pandemic, Microsoft's valuation came to nearly $2 trillion. The increased necessity for remote work and distance education drove demand for cloud computing and grew the company's gaming sales.
On June 24, 2021, Microsoft announced Windows 11 during a livestreamed event. The announcement came with confusion after Microsoft announced Windows 10 would be the last version of the operating system. It was released to the general public on October 5, 2021.
In September 2021, it was announced that the company had acquired TakeLessons, an online platform that connects students and tutors in numerous subjects. The acquisition positioned Microsoft to grow its presence in the market of providing online education to large numbers of people. In the same month, Microsoft acquired Australia-based video editing software company Clipchamp.
In October 2021, Microsoft announced that it began rolling out end-to-end encryption (E2EE) support for Microsoft Teams calls in order to secure business communication while using video conferencing software. On October 7, Microsoft acquired Ally.io, a software service that measures companies' progress against OKRs, planning to incorporate it into its Viva family of employee experience products.
On January 18, 2022, Microsoft announced the acquisition of American video game developer and holding company Activision Blizzard in an all-cash deal worth $68.7 billion, which was completed in 2023. Microsoft also named Phil Spencer, head of the Xbox brand since 2014, the inaugural CEO of the newly established Microsoft Gaming division, which now houses the Xbox operations team and the three publishers in the company's portfolio (Xbox Game Studios, ZeniMax Media, Activision Blizzard). Microsoft had not released statements regarding Activision's recent legal controversies regarding employee abuse, but reports have alleged that Activision CEO Bobby Kotick, a major target of the controversy, would leave the company after the acquisition is finalized. The deal was closed on October 13, 2023.
In January 2023, CEO Satya Nadella announced Microsoft would lay off 10,000 employees. The announcement came a day after hosting a Sting concert for 50 people, including Microsoft executives, in Davos, Switzerland.
On January 23, 2023, Microsoft announced a new multi-year, multi-billion dollar investment deal with ChatGPT developer OpenAI.
In June 2023, Microsoft released Azure Quantum Elements to run molecular simulations and calculations in computational chemistry and materials science using a combination of AI, high-performance computing and quantum computing. The service includes Copilot, a GPT-4 based large language model tool to query and visualize data, write code, initiate simulations, and educate researchers.
At a November 2023 developer conference, Microsoft announced two new custom-designed computing chips: The Maia chip, designed to run large language models, and Cobalt CPU, designed to power general cloud services on Azure.
On November 20, 2023, Satya Nadella announced that Sam Altman, who had been ousted as CEO of OpenAI just days earlier, and Greg Brockman, who had resigned as president, would join Microsoft to lead a new advanced AI research team. However, the plan was short-lived, as Altman was subsequently reinstated as OpenAI's CEO and Brockman rejoined the company amid pressure from OpenAI's employees and investors on its board. In March 2024, Inflection AI's cofounders Mustafa Suleyman and Karen Simonyan announced their departure from the company in order to start Microsoft AI, with Microsoft acqui-hiring nearly the entirety of its 70-person workforce. As part of the deal, Microsoft paid Inflection $650 million to license its technology.
In January 2024, Microsoft became the most valued publicly traded company. Meanwhile, that month, the company announced a subscription offering of artificial intelligence for small businesses via Copilot Pro.
In June 2024, Microsoft announced it would be laying off 1,000 employees from the company's mixed reality and Azure cloud computing divisions. The same month, Microsoft announced that it was building a "hyperscale data centre" in South East Leeds.
In July 2024, it was reported that the company was laying off its diversity, equity, and inclusion (DEI) team. On July 19, a global IT outage impacted Microsoft services, affecting businesses, airlines, and financial institutions worldwide. The outage was traced back to a flawed update of CrowdStrike's cybersecurity software, which resulted in Microsoft systems crashing and causing disruptions across various sectors. Despite CrowdStrike's CEO George Kurtz clarifying that the issue was not a cyberattack, the incident had widespread consequences, leading to delays in air travel, financial transactions, and medical services globally. Microsoft stated that the underlying cause had been fixed but acknowledged ongoing residual impacts on some Microsoft 365 apps and services.
In September 2024, BlackRock and Microsoft announced a $30 billion fund, the Global AI Infrastructure Investment Partnership, to invest in AI infrastructure such as data centers and energy projects. Partners include Abu Dhabi-backed MGX and Nvidia, which will provide AI expertise. Investments will primarily focus on the U.S., with some in partner countries. Microsoft also announced relaunch of its controversial tool, Recall, in November 2024 after addressing privacy concerns. Initially criticized for taking regular screenshots without user consent, Recall was changed to an opt-in feature instead of being default on. The UK's Information Commissioner's Office monitored the situation and noted the adjustments, which included enhanced security measures like encryption and biometric access. While experts regarded these changes as improvements, they advised caution, with some recommending further testing before users opted in.
On February 28, 2025, Microsoft announced that Skype would be shutting down on May 5, 2025, to streamline its focus on Microsoft Teams. The company stated there would be no job cuts due to the shutdown.
In mid-2025, Microsoft's Russian division, Microsoft Rus LLC, filed for bankruptcy after President Vladimir Putin stated that foreign services providers should be throttled in Russia to make way for domestic software. The company had restructured operations in Russia after the 2022 Russian invasion of Ukraine, but those restructuring efforts had failed.
On May 23, 2025, it was reported that Europol's European Cybercrime Centre worked with Microsoft to disrupt Lumma Stealer, a significant infostealer threat. The joint operation targeted a sophisticated ecosystem that allowed criminals to exploit stolen information on a massive scale.
In June 2025, a United Nations report on corporations complicit in the Gaza genocide showed that Microsoft was one of several companies "central to Israel's surveillance apparatus and the ongoing Gaza destruction."
On July 2, 2025, Microsoft announced it would cut nearly 4% of its workforce, around 9,000 jobs, to control costs amid heavy AI infrastructure spending, while also restructuring management and streamlining operations.
According to an analysis by Bridgewater Associates, Microsoft—along with Amazon, Alphabet and Meta—is expected to collectively invest about $650 billion to scale up AI-related infrastructure in 2026.
In March 2026, Microsoft-controlled discussion forums banned the nickname Microslop, used to express pushback against Microsoft's Copilot-based and GenAI efforts.
In March 2026, Microsoft signed an energy pledge at the White House which required it to bear the cost of new electricity generation to power its data centers.
On 9 March 2026, Microsoft unveiled the Copilot Cowork tool, which is based on Claude Cowork, tapping into the growing demand for autonomous agents.
At Microsoft Build 2026 in June 2026, Microsoft announced the preview availability of Azure Cobalt 200 virtual machines, its second-generation Arm-based custom CPU, offering up to 135% better performance for cloud database workloads and 50% overall CPU performance improvement over the previous generation Cobalt 100. Microsoft also confirmed that its Maia 200 AI accelerator, first revealed in January 2026, had entered production deployment in data centers in Iowa and Arizona, powering workloads including Microsoft 365 Copilot and OpenAI's GPT-5.2 models.
