WW 944: Shakin' the Treats - Microsoft becomes a $4 trillion company

Aug 6, 2025

Microsoft has reached a staggering $4 trillion valuation as it navigates a complex landscape of tech industry dynamics, substantial AI investments, and staffing changes. Their revenue figures show remarkable growth, sparking discussions on the implications of substantial layoffs despite profits. Insights into Windows' future reveal a focus on security and AI integration, while the gaming industry sees Xbox thriving amidst nostalgic reflections. Plus, humorous anecdotes about whiskey tasting and travel adventures add lighthearted moments to the tech-heavy conversation.

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INSIGHT

Microsoft Reaches $4 Trillion Value

Microsoft became the second company ever to reach a $4 trillion market cap, driven by Windows and Xbox success.
Azure cloud revenues hit $75 billion in fiscal year 2025, showing massive growth and importance for Microsoft.

INSIGHT

Microsoft's Massive AI Investment

Microsoft spent about $85 billion on AI infrastructure in fiscal 2025, surpassing its initial projections.
AI spending will surge to $30 billion in the current quarter, emphasizing massive investment in AI capabilities.

INSIGHT

Microsoft's Layoff and Headcount Strategy

Microsoft has laid off about 17,000 employees in 2025 despite strong profitability, aiming to streamline and change company culture.
Headcount remains roughly the same year over year due to some rehiring efforts.

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Microsoft's fiscal year ended on a high note, assuming you didn't just get laid off. WinSAT's formal assessment will give you some interesting PC performance information, similar to the old WEI score from Windows Vista. And Proton finally makes a standalone authenticator app; How to transition from whatever you're currently using and why you'll need to keep using Microsoft Authenticator too.

Microsoft Earning

Quarterly: net income of $27.2 billion on revenues of $76.4 billion. Those figures represent gains of 24 percent and 18 percent, respectively, year-over-year (YOY)
Annual: a net income of $101.8 billion (up 16 percent YOY) on revenues of $281.7 billion (up 15 percent)
Another look at layoffs, which are nothing new under Satya Nadella - Over 17,000 in CY 2025 so far, despite over $100 billion in profits in FY
Headcount "unchanged" YOY
Big announcements below were likely made to avoid Qs about layoffs and it almost worked
AI spending in FY was about $85 billion, higher than promised
AI spending in this quarter will jump to $30 billion (!!!!)
Azure earned $75 billion in revenues in FY, its first-ever disclosure of this number - Fun with math, that means $56 billion in revenues in previous FY. How far back can we go?
Microsoft's market cap exceeded $4 trillion after earnings release
"Copilot" has over 100 million MAUs, really M365 Copilot, which even Nadella thinks is a new M365 tier
GitHub Copilot has over 20 million MAUs, probably most are free
HUGE gains in Microsoft Gaming/Xbox, discussed below

Windows 11

But first, something completely different: Microsoft's "vision" for Windows in 2030
David Weston a curious choice for this video, first in a series - he's in security
Daily work life changes thanks to AI - less toil work, less eyes and more talking, multimodal interactions
Security - customers want appliance-level security, "it just works" security -
Degenerates into a general security discussion
Back to AI, reclaiming our lives
Windows 11 SE, RIP - We hardly knew you. Literally.
Insider: Changes to Home view in File Explorer for Work and School sign-ins, Settings app changes in Dev (25H2) and Beta (24H2)

More earnings

AMD - HUGE gains in its PC businesses!
Qualcomm up 10%
Apple up 9.6%
Amazon up 13%

AI & dev

OpenAI releases its first open-weight reasoning models and Microsoft gives them away for free
Apple is trying to Sherlock ChatGPT
Of course Alexa+ will get ads
Dev: Microsoft has a native app problem on Windows
Microsoft says it will fix Windows App SDK
Paul just switched .NETpad to the Windows App SDK and can confirm it's a nightmare
WPF is half-assed... and last year, it took Microsoft over 9 months to deliver the first Windows Copilot Runtime capabilities to devs, but you still can't use this in production. Also, it's not called that anymore

Xbox & games

Microsoft Gaming has over 500 million MAUs - More fun with math
COD has 50 million MAUs
Microsoft has nearly 40 games in development
Xbox Game Pass has $5 billion in revenues in FY, over 500 million hours played in FY
Gaming Copilot (Beta) is available on Game Bar for Windows PC for Xbox Insiders enrolled in the PC Gaming Preview
Assassin's Creed Mirage and more coming to Game Pass this month
OG Switch models now cost more thanks to tariffs

Tips & Picks

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These show notes have been truncated due to length. For the full show notes, visit https://twit.tv/shows/windows-weekly/episodes/944

Hosts: Leo Laporte, Paul Thurrott, and Richard Campbell

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