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The 5 big events that shaped Microsoft’s 2025
This has been a pivotal 12 months for Microsoft, a year in which it faced increasing competition that threatened to knock the company off its perch as the world’s leader in AI. Even so, Microsoft managed to add about $400 billion to its valuation this year, pushing it to about $3.5 trillion, depending on the day.
And it kept its lead in AI.
How did it manage to do so? These five big events all helped shaped the company this year.
Donald Trump takes officeEver since Microsoft was sued by the federal government in the late 1990s for antitrust violations, the company has tried to steer clear of politics, considering it the third rail of the business world. But US President Donald J. Trump rules by whim and a powerful sense of grievance. So, Microsoft can no longer escape politics — Trump won’t allow it.
The way CEO Satya Nadella dealt with Trump’s inauguration last January was a template for the way the wary company dealt with Trump the entire year. It steered a path between not offending him and not being a cheerleader either.
Microsoft donated $1 million for Trump’s inauguration. But Nadella didn’t attend the event like so many other tech leaders, including Amazon’s Jeff Bezos, Apple’s Tim Cook, Meta’s Mark Zuckerberg, OpenAI’s Sam Altman, Alphabet’s Sundar Pichai and Tesla’s Elon Musk.
The donation seemed to appease Trump, even though Nadella didn’t show up in person. At least, it did for a while.
Trump targets MicrosoftIn September, Trump put Microsoft in his crosshairs when he demanded the company fire its recently appointed President of Global Affairs, Lisa Monaco. Monaco was once second in command at the Justice Department and oversaw prosecutions of Trump for misusing classified documents and efforts to overturn the 2020 presidential election. The demand was part of a revenge-and-retribution campaign in which the president also targeted former FBI Director James Comey and New York Attorney General Letitia James, among others.
For Microsoft, this wasn’t about profit and loss; it was about company culture. Microsoft had already refused to shut down its diversity efforts and it dropped the law firm of Simpson Thacher & Bartlett when it pledged to give the administration $125 million in free legal work after threats from Trump. To replace the firm, Microsoft hired Jenner & Block, which sued the Trump administration instead of giving in to its threats.
With Monaco, though, Trump called out Microsoft individually for the first time. Nadella’s response: He didn’t say a word about Trump’s threat. And he didn’t fire Monaco. Microsoft kept its culture intact. Trump has yet to take revenge.
Microsoft and OpenAI sign divorce papersThis year, Microsoft and OpenAI finally inked a deal clarifying what Microsoft will get in return for having invested nearly $14 billion in OpenAI, and what strictures, if any, OpenAI must adhere to because of that investment. Most importantly, it laid out what their relationship will be now that AI has conquered the tech world.
OpenAI got what it wanted most — it will be allowed to restructure itself in a way that essentially turns it into a for-profit company. That opens the way towards getting the $22.5 billion SoftBank has pledge to invest in the company, along with other investments.
In addition, OpenAI can make infrastructure deals with other companies without granting Microsoft the right of first refusal. OpenAI can also continue to develop AI-based consumer hardware and Microsoft gets no rights to the technology.
In return, Microsoft gets 27% ownership of the for-profit OpenAI business, estimated to be worth about $135 billion for now; that’s a pretty solid return on investment for a less-than $14 billion investment.
OpenAI also commits to buying $250 million from Microsoft in Azure cloud services. Microsoft gets to keep its intellectual property rights to OpenAI technologies until 2032 — and when that lapses, it will most likely have developed its own intellectual property to replace it.
Overall, Microsoft came out the big winner. The deal will likely help it maintain its AI lead over its competitors for now.
Microsoft charts its AI futureMicrosoft had been planning what it would do after its divorce from OpenAI, and in 2025 it laid out that roadmap and took important steps towards that future.
In September, it launched its own large language models (LLMs), the brains behind generative AI (genAI) tools like ChatGPT and Copilot, which is powered by OpenAI’s GPT LLM. One of the homegrown models, MAI-Voice-1, will become Copilot’s voice interface. Microsoft is being cagey about what else it does, but calls it an initial “foundation model trained end-to-end [that] offers a glimpse of future offerings inside Copilot.”
The company also made a deal with OpenAI competitor Anthropic to power parts of Microsoft 365 Copilot, the version of Copilot that integrates with Microsoft 365 apps. That will improve one of Copilot’s serious shortcomings, weak Excel capabilities. It’s a first step towards taking a “best-of-breed” approach that relies on multiple LLMs, not just GPT, to power Copilot.
The biggest AI news of all, though, was the company’s announcement of its eventual AI future — the development of what it calls “Humanist Superintelligence,” a series of powerful AI-based technologies, each pointed at solving an important problem.
Mustafa Suleyman, Microsoft AI CEO and executive vice president, and co-founder and former head of Applied AI at the AI company Deep Mind, laid out the vision in a blog post. He said the company has already begun work on what he calls Medical Superintelligence. Next, he says, will be work on designing plentiful, clean, inexpensive energy.
Microsoft avoids antitrust suits… for the momentThe Biden and even the Trump administrations have come down hard on Big Tech at times, launching or continuing antitrust lawsuits against Amazon, Apple, Google, and Meta. Microsoft has so far avoided one, with the exception of an FTC lawsuit against the company’s purchase of Activision Blizzard, which the FTC lost. Even if the agency had won, however, the suit wouldn’t have affected the core of Microsoft’s business in the way prosecutions could hurt the other big tech companies.
Microsoft has been worried about a federal antitrust lawsuit because in late November 2024, the FTC launched a broad investigation into the company’s AI, cloud computing, security, and Teams products. At the heart of the probe was the way Microsoft might have violated antitrust laws by bundling cloud computing products and Teams with its office and security products. The investigation was also looking into whether the company was gaining too much market dominance in AI.
Now, more than a year later, there hasn’t been a peep about it. That likely means the investigation has foundered. The company appears to be in the clear for now. Trump frequently uses the power of the federal government to attack and prosecute his enemies. If he turns against Microsoft, don’t be surprised if the investigation suddenly takes on steam in 2026.
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Google says no to training AI on its search results
Google is suing SerpApi, a web-scraping company that provides its customers with an API that mimics human searching, the latest salvo in the battle over access to data for training and operating AI large language models.
Many of the large language models powering AI services today were trained on data scraped from websites, often without the knowledge or permission of the sites’ owners. Now, copyright holders are fighting back, suing AI companies or their suppliers, and striking licensing deals worth millions or even billions of dollars.
Google is on both sides of that fight: collecting and curating one of the world’s largest datasets, while simultaneously training its own family of LLMs, Gemini, and integrating them into its services — including search.
Now other companies are seeking to access that dataset to build competing AI products, and Google sees it as a threat.
SerpApi is “circumventing security measures protecting others’ copyrighted content that appears in Google search results,” Google General Counsel Halimah DeLaine Prado wrote in a blog post announcing the lawsuit. “We did this to ask a court to stop SerpApi’s bots and their malicious scraping, which violates the choices of websites and rightsholders about who should have access to their content,” she wrote.
While Google obtains most of its search results by scraping websites itself, Prado said Google’s lawsuit specifically targets SerpApi’s access to content Google has licensed or created. “SerpApi deceptively takes content that Google licenses from others (like images that appear in Knowledge Panels, real-time data in Search features and much more), and then resells it for a fee. In doing so, it willfully disregards the rights and directives of websites and providers whose content appears in Search,” she wrote.
SerpApI denied wrongdoing, saying that it provides developers, researchers, and businesses with access to public search data that is the same information anyone can access from their browser. “We believe this lawsuit is an effort to stifle competition from the innovators who rely on our services to build next-generation AI, security, browsers, productivity, and many other applications,” it said in a written statement. “As we state on our website, ‘The crawling and parsing of public data is protected by the First Amendment of the United States Constitution.’ We work closely with our attorneys to ensure our services comply with all applicable laws, including fair use principles. SerpApi stands firmly behind its business model and will vigorously defend itself in court.”
Google must be particularly concerned about the help that its competitors are receiving from SerpApi. In August, The Information reported that OpenAI and Perplexity were customers of SerpApi.
No free rideSome see the lawsuit as an indication that the free ride for AI firms is coming to an end.
“AI development is moving extremely fast precisely because the legal framework around content usage is unclear,” said Martin Jeffrey, founder of AI search optimization consultancy Harton Works. “Companies are optimizing for AI discovery now rather than waiting for permission or clarity, and maybe this is why Google is making these kinds of moves.”
Matt Hasan, CEO of AI marketing firm aiResults, concurs. “The period where AI developers could move quickly with little pushback from content providers is clearly ending. As legal and regulatory constraints tighten, we should expect a slowdown in experimentation, more cautious product development, and a shift toward defensible, licensed, or vertically integrated data strategies. That doesn’t stop AI progress, but it does reshape who can afford to participate and how fast they can move.”
Google’s action will certainly help the company with the continuing development of its own AI offering, said Jeffrey. “Google fell behind a bit with Gemini. They’re catching up now and are implementing Gemini into everything,” he said. He’s curious to see what Google does after its action against SerpApi: “If they win that, will they tackle larger firms? It looks like they’re going after the small guy first; it’s a shot across the bow.”
There are already signs that some of Gemini’s competitors are beginning to be impacted by Google’s strides in the AI market. Earlier this month, OpenAI CEO Sam Altman declared a ‘Code Red’ alert in his attempt to maintain its market leading position against Google’s incursions into the market.
The lawsuit against SerpApi is not Google’s first attempt to limit the use its AI rivals can make of its data. In October it limited search queries to just 10 results per request, where previously it would provide up to 100. This action forced companies scraping its site to considerably scale up their crawling efforts to achieve the same results.
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Apple fined $116 million in Italy
The Italian competition authority, Autorità Garante della Concorrenza e del Mercato, has fined Apple more than $116 million (€98.6 million) for abusing its dominant position in the market for app distribution to iOS users.
The authority considers that Apple’s App Tracking Transparency (ATT) policy, introduced in 2021, inhibits competition. The policy requires third-party developers to obtain double permission from users to collect and link data for advertising purposes, while Apple itself is not similarly affected.
The investigation, coordinated with the European Commission and other authorities, concluded that the rules are unilaterally imposed, disproportionate to Apple’s alleged privacy purpose, and harm app developers, advertisers and advertising networks by limiting their ability to use data for personalized advertising.
In a statement to Ars Technica, Apple writes that the company plans to appeal the fine and defend App Tracking Transparency as a protection of user privacy on iOS.
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Google’s old assistant stays on Android for a while longer
In March, Computer Sweden reported that Google Assistant would be replaced by the AI tool Gemini in Android-based mobile phones before the new year.
With just over a week to go until the end of the year, it is clear that this will not be the case.
In a message on the Gemini support page, we learn that the transition is taking longer than expected, which means that the process will not be completed until next year at the earliest.
According to Engadget, the delay is probably because Gemini simply consumes more resources than Google Assistant at present, which means that a mobile phone with at least 2 gigabytes of working memory is currently required to be able to replace the assistant.
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