Microsoft's 18-hour 365 outage drags on as AI writes 30% of its code
Microsoft spent nearly a day trying to restore Outlook, Teams, Copilot and more than a dozen other services after what it described as a failure in "a core process", leaving roughly 450 million paying Microsoft 365 customers worldwide without their tools.
The outage began on a Thursday and was still not fully repaired by Friday morning, with Microsoft saying only that things were looking up and that Asia was showing "encouraging recovery signals". It was resolved by Saturday morning. The company attributed the failure to bad code, not to hackers.
Among those affected were governments in Japan, Australia and the Philippines that could not serve citizens without Outlook access, as well as AI companies such as Anthropic and OpenAI that run on Microsoft's services. The timing drew attention to Microsoft's staffing: chief executive Satya Nadella has said at least 30% of the company's new code is now written by AI, close to the share of employees the firm has shed this year through buyouts and cuts.
It was not the company's first software failure this year. A bug in July cut its West US Azure data centre off from the rest of its network and caused hours-long outages across North America. Investors have so far shrugged off the incidents, pushing the shares to a record this month as Azure's AI revenue climbed, even as questions grow about the scale of its AI capital spending.
Microsoft has committed $175 billion to AI spending in 2026. It offered buyouts to 7% of its workforce in May, cut another 2% in July and offered further buyouts to 27% last month.
What it means for Pakistan: Pakistani businesses, banks and government offices that run on Microsoft 365 subscriptions were exposed to the same global disruption, with Outlook and Teams unavailable for close to a day. The episode is a reminder for local firms weighing cloud dependence and AI-driven cost cutting that a single vendor's software failure can halt email, meetings and internal workflows, and that continuity planning matters as much as the savings.
