They’re rivals in the cloud, and competitors for customers and talent. But Microsoft and Amazon are on the same page when it comes to Washington state’s housing crisis — literally, in the case of an op-ed Friday and full-page ad last Sunday in The Seattle Times.

The Seattle region “faces a housing emergency that threatens our state’s quality of life, health and economic competitiveness,” write Brad Smith, Microsoft’s vice chair and president, and David Zapolsky, Amazon’s chief global affairs and legal officer.

It was an unusual joint byline, to say the least, but it reflected the similar big-picture goals of their separate housing initiatives. 

Combined, the two companies have committed $1.6 billion to preserve and build more than 26,000 affordable homes in the region. But the executives say even that isn’t enough, framing the problem as a supply issue that requires building “more homes of all kinds.”

They’re backing several bills in the current legislative session, including SB 6026, which would allow residential development on commercial land like strip malls and big-box stores. They also praise Gov. Bob Ferguson’s proposed $225 million in bonds for the state Housing Trust Fund.

“Going forward, legislators must commit to a simple test: If a policy makes housing more costly or takes longer to build, don’t pass it. Consider an alternative,” they write. “Enact policies that pencil in today’s market, not aspirational measures that might work down the line.”

They warn that other states are moving faster to attract developers. “Capital is fluid,” they write. “Banks, investors and lenders are going where they can make predictable returns.”

The joint push comes after Microsoft released a report last week outlining lessons learned from its housing investments. Read our earlier coverage for more details.

This week on the GeekWire Podcast: Newly unsealed court documents reveal the behind-the-scenes history of Microsoft and OpenAI, including a surprise: Amazon Web Services was OpenAI’s original partner. We tell the story behind the story, explaining how it all came to light.

Plus, Microsoft CEO Satya Nadella debuts a new AI catchphrase at Davos, startup CEO Dave Clark stirs controversy with his “wildly productive weekend,” Elon Musk talks aliens, and the latest on Seattle-area physical AI startups, including Overland AI and AIM Intelligent Machines.

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

With GeekWire co-founders John Cook and Todd Bishop; edited by Curt Milton.

Bicycles for the mind. … Information at your fingertips. … Managers of infinite minds?

Microsoft CEO Satya Nadella riffed on some famous lines from tech leaders past this week in an appearance at the World Economic Forum in Davos, Switzerland, and offered up his own trippy candidate to join the canon of computing metaphors. 

Nadella traced the lineage in a conversation with former UK Prime Minister Rishi Sunak.

• “Computers are like a bicycle for the mind” was the famous line from Apple’s Steve Jobs.
• “Information at your fingertips” was Bill Gates’ classic Microsoft refrain back in the day.

And now? “All of us are going to be managers of infinite minds,” Nadella said. “And so if we have that as the theory, then the question is, what can we do with it?”

He was referring to AI agents — the autonomous software that can take on tasks, work through problems, and keep going while you sleep. Microsoft and others have been talking for the better part of a year now about people starting to oversee large fleets of them. 

Nadella said it’s already reshaping how teams are structured. At Microsoft-owned LinkedIn, the company has merged design, program management, product management, and front-end engineering into a single new role: full-stack builders. Overall, he called it the biggest structural change to software teams he’s seen in a career that started at Microsoft in the 1990s.

“The jobs of the future are here,” Nadella said, putting his own spin on a famous line often attributed to sci-fi writer William Gibson. “They’re just not evenly distributed.”

Nadella’s comments came during a live stream for LinkedIn Premium members, hosted from Davos by LinkedIn VP and Editor in Chief Daniel Roth, after Sunak mentioned his two teenage daughters, and the world they’ll enter. Young people may not manage lots of people at age 20 or 21, he said, “but they will be managing a team of agents.” 

Sunak was referencing an essay by Goldman Sachs CIO Marco Argenti in Time. 

The agentic shift, Argenti wrote, requires “moving from being a sole performer to an orchestra conductor” — your team now includes AI agents that “must be guided and supervised with the same approach you would apply to a new, junior colleague.”

Nadella agreed, saying “we do need a new theory of the mind” to navigate what’s coming, before he offered up his new metaphor about managing infinite minds.

In other remarks at Davos, Nadella made headlines with his warning that AI’s massive energy demands risk eroding its “social permission” unless it delivers tangible benefits in health, education, and productivity. Energy costs, he added, will decide the AI race’s winners, with GDP growth tied to cheap power for processing AI tokens.

Whether “infinite minds” catches on like “bicycles” and “fingertips” remains to be seen. But it’s definitely more psychedelic. And if this shift is stranger than what came before, maybe we do need a mind-expanding metaphor to make sense of it all.

The launch of the AI lab that would redefine Microsoft caught the tech giant by surprise.

“Did we get called to participate?” Satya Nadella wrote to his team on Dec. 12, 2015, hours after OpenAI announced its founding. “AWS seems to have sneaked in there.”

Nadella had been Microsoft CEO for less than two years. Azure, the company’s cloud platform, was five years old and chasing Amazon Web Services for market share. And now AWS had been listed as a donor in the “Introducing OpenAI” post. Microsoft wasn’t in the mix. 

In the internal message, which hasn’t been previously reported, Nadella wondered how the new AI nonprofit could remain truly “open” if it was tied only to Amazon’s cloud.

Within months, Microsoft was courting OpenAI. Within four years, it would invest $1 billion, adding more than $12 billion in subsequent rounds. Within a decade, the relationship would culminate in a $250 billion spending commitment for Microsoft’s cloud and a 27% equity stake in one of the most valuable startups in history.

New court filings offer an inside look at one of the most consequential relationships in tech. Previously undisclosed emails, messages, slide decks, reports, and deposition transcripts reveal how Microsoft pursued, rebuffed and backed OpenAI at various moments over the past decade, ultimately shaping the course of the lab that launched the generative AI era.

More broadly, they show how Nadella and Microsoft’s senior leadership team rally in a crisis, maneuver against rivals such as Google and Amazon, and talk about deals in private.

For this story, GeekWire dug through more than 200 documents, many of them made public Friday in Elon Musk’s ongoing suit accusing OpenAI and its CEO Sam Altman of abandoning the nonprofit mission. Microsoft is also a defendant. Musk, who was an OpenAI co-founder, is seeking up to $134 billion in damages. A jury trial is scheduled for this spring.

OpenAI has disputed Musk’s account of the company’s origins. In a blog post last week, the company said Musk agreed in 2017 that a for-profit structure was necessary, and that negotiations ended only when OpenAI refused to give him full control. 

The recently disclosed records show that Microsoft’s own leadership anticipated the possibility of such a dispute. In March 2018, after learning of OpenAI’s plans to launch a commercial arm, Microsoft CTO Kevin Scott sent Nadella and others an email offering his thoughts.

“I wonder if the big OpenAI donors are aware of these plans?” Scott wrote. “Ideologically, I can’t imagine that they funded an open effort to concentrate ML [machine learning] talent so that they could then go build a closed, for profit thing on its back.”

The latest round of documents, filed as exhibits in Musk’s lawsuit, represents a partial record selected to support his claims in the case. Microsoft declined to comment. 

Elon helps Microsoft win OpenAI from Amazon

Microsoft’s relationship with OpenAI has been one of its key strategic advantages in the cloud. But the behind-the-scenes emails make it clear that Amazon was actually there first.

According to an internal Microsoft slide deck from August 2016, included in recent filings, OpenAI was running its research on AWS as part of a deal that gave it $50 million in computing for $10 million in committed funds. The contract was up for renewal in September 2016. 

Microsoft wanted in. Nadella reached out to Altman, looking for a way to work together. 

In late August, the filings show, Altman emailed Musk about a new deal with Microsoft: “I have negotiated a $50 million compute donation from them over the next 3 years!” he wrote. “Do you have any reason not to like them, or care about us switching over from Amazon?” 

Musk, co-chair of OpenAI at the time, gave his blessing to the Microsoft deal in his unique way, starting with a swipe at Amazon founder Jeff Bezos: “I think Jeff is a bit of a tool and Satya is not, so I slightly prefer Microsoft, but I hate their marketing dept,” Musk wrote. 

He asked Altman what happened to Amazon.

Altman responded, “Amazon started really dicking us around on the T+C [terms and conditions], especially on marketing commits. … And their offering wasn’t that good technically anyway.”

Microsoft and OpenAI announced their partnership in November 2016 with a blog post highlighting their plans to “democratize artificial intelligence,” and noting that OpenAI would use Azure as its primary cloud platform going forward.

Internally, Microsoft saw multiple benefits. The August 2016 slide deck, titled “OpenAI on Azure Big Compute,” described it as a prime opportunity to flip a high-profile customer to Azure. 

The presentation also emphasized bigger goals: “thought leadership” in AI, a “halo effect” for Azure’s GPU launch, and the chance to recruit a “net-new audience” of developers and startups. It noted that OpenAI was a nonprofit “unconstrained by a need to generate financial return” — an organization whose research could burnish Microsoft’s reputation in AI.

But as the ambition grew, so did the bill.

‘Most impressive thing yet in the history of AI’

In June 2017, Musk spoke with Nadella directly to pitch a major expansion. OpenAI wanted to train AI systems to beat the best human players at competitive esports, Valve’s Dota 2. The computing requirements were massive: 10,000 servers equipped with the latest Nvidia GPUs.

“This would obviously be a major opportunity for Microsoft to promote Azure relative to other cloud systems,” Musk wrote in an email to OpenAI colleagues after the call.

Nadella said he’d talk about it internally with his Microsoft cloud team, according to the email. “Sounds like there is a good chance they will do it,” Musk wrote.

Two months later, Altman followed up with a formal pitch. “I think it will be the most impressive thing yet in the history of AI,” he wrote to Nadella that August.

Microsoft’s cloud executives ran the numbers and balked. In an August 2017 email thread, Microsoft executive Jason Zander told Nadella the deal would cost so much it “frankly makes it a non-starter.” The numbers are redacted from the public version of the email. 

“I do believe the pop from someone like Sam and Elon will help build momentum for Azure,” Zander wrote. “The scale is also a good forcing function for the fleet and we can drive scale into the supply chain. But I won’t take a complete bath to do it.”

Ultimately, Microsoft passed. OpenAI contracted with Google for the Dota 2 project instead.

‘A bucket of undifferentiated GPUs’

Microsoft’s broader relationship with OpenAI was starting to fray, as well. By January 2018, according to internal emails, Microsoft executive Brett Tanzer had told Altman that he was having a hard time finding internal sponsors at Microsoft for an expanded OpenAI deal. 

Altman started shopping for alternatives. Around that time, Tanzer noted in an email to Nadella and other senior executives that OpenAI’s people “have been up in the area recently across the lake” — a reference to Amazon’s Seattle headquarters.

The internal debate at Microsoft was blunt. 

Scott wrote that OpenAI was treating Microsoft “like a bucket of undifferentiated GPUs, which isn’t interesting for us at all.” Harry Shum, who led Microsoft’s AI research, said he’d visited OpenAI a year earlier and “was not able to see any immediate breakthrough in AGI.” 

Eric Horvitz, Microsoft’s chief scientist, chimed in to say he had tried a different approach. After a Skype call with OpenAI co-founder Greg Brockman, he pitched the idea of a collaboration focused on “extending human intellect with AI — versus beating humans.” 

The conversation was friendly, Horvitz wrote, but he didn’t sense much interest. He suspected OpenAI’s Dota work was “motivated by a need to show how AI can crush humans, as part of Elon Musk’s interest in demonstrating why we should all be concerned about the power of AI.”

Scott summed up the risk of walking away: OpenAI might “storm off to Amazon in a huff and shit-talk us and Azure on the way out.”

“They are building credibility in the AI community very fast,” the Microsoft CTO and Silicon Valley veteran wrote. “All things equal, I’d love to have them be a Microsoft and Azure net promoter. Not sure that alone is worth what they’re asking.”

But by the following year, Microsoft had found a reason to double down.

The first billion

In 2019, OpenAI restructured. The nonprofit would remain, but a new “capped profit” entity would sit beneath it — a hybrid that could raise capital from investors while limiting their returns. 

Microsoft agreed to invest $1 billion, with an option for a second billion, in exchange for exclusive cloud computing rights and a commercial license to OpenAI’s technology.

The companies announced the deal in July 2019 with a joint press release. “The creation of AGI will be the most important technological development in human history, with the potential to shape the trajectory of humanity,” Altman said. Nadella echoed that sentiment, emphasizing the companies’ ambition to “democratize AI” while keeping safety at the center.

So what changed for Microsoft between 2018 and 2019?

In a June 2019 email to Nadella and Bill Gates, previously disclosed in the Google antitrust case, Scott cited the search giant’s AI progress as one reason for Microsoft to invest in OpenAI. He “got very, very worried,” he explained, when he “dug in to try to understand where all of the capability gaps were between Google and us for model training.”

Nadella forwarded Scott’s email to Amy Hood, Microsoft’s CFO. “Very good email that explains why I want us to do this,” Nadella wrote, referring to the larger OpenAI investment, “and also why we will then ensure our infra folks execute.”

Gates wasn’t so sure. According to Nadella’s deposition testimony, the Microsoft co-founder was clear in “wanting us to just do our own” — arguing that the company should focus on building AI capabilities in-house rather than placing such a large bet on OpenAI.

Nadella explained that the decision to invest was eventually driven by him and Scott, who concluded that OpenAI’s specific research direction into transformers and large language models (the GPT class) was more promising than other approaches at the time.

Hood, meanwhile, offered some blunt commentary on OpenAI’s cap on profits — the centerpiece of its new structure, meant to limit investor returns and preserve the nonprofit’s mission. The caps were so high, she wrote, that they were almost meaningless.

“Given the cap is actually larger than 90% of public companies, I am not sure it is terribly constraining nor terribly altruistic but that is Sam’s call on his cap,” Hood wrote in a July 14, 2019, email to Nadella, Scott, and other executives. 

If OpenAI succeeded, she noted, the real money for Microsoft would come from Azure revenue — far exceeding any capped return on the investment itself.

But the deal gave Microsoft more than cloud revenue.

According to an internal OpenAI memo dated June 2019, Microsoft’s investment came with approval rights over “Major Decisions” — including changes to the company’s structure, distributions to partners, and any merger or dissolution.

Microsoft’s $1 billion made it the dominant investor. Under the partnership agreement, major decisions required approval from a majority of limited partners based on how much they had contributed. At 85% of the total, Microsoft had an effective veto, a position of power that would give the company a pivotal role in defining the future of the company.

‘The opposite of open’

In September 2020, Musk responded to reports that Microsoft had exclusively licensed OpenAI’s GPT-3. “This does seem like the opposite of open,” he tweeted. “OpenAI is essentially captured by Microsoft.”

Nadella seemed to take the criticism seriously. 

In an October 2020 meeting, according to internal notes cited in a recent court order, Microsoft executives discussed the perception that the company was “effectively owning” OpenAI, with Nadella saying they needed to give thought to Musk’s perspective.

In February 2021, as Microsoft and OpenAI negotiated a new investment, Altman emailed Microsoft’s team: “We want to do everything we can to make you all commercially successful and are happy to move significantly from the term sheet.” 

His preference, Altman told the Microsoft execs, was “to make you all a bunch of money as quickly as we can and for you to be enthusiastic about making this additional investment soon.”

They closed the deal in March 2021, for up to $2 billion. This was not disclosed publicly until January 2023, when Microsoft revealed it as part of a larger investment announcement.

By 2022, the pressure to commercialize was explicit. 

According to a transcript of her deposition, Mira Murati, then OpenAI’s vice president of applied AI and partnerships, had written in contemporaneous notes that the most-cited goal inside the company that year was a $100 million revenue target. Altman had told employees that Nadella and Scott said this needed to be hit to justify the next investment, as much as $10 billion.

Murati testified that Altman told her “it was important to achieve this goal to receive Microsoft’s continued investments.” OpenAI responded by expanding its go-to-market team and building out its enterprise business.

Then everything changed.

The ChatGPT moment

On Nov. 30, 2022, OpenAI announced ChatGPT. The chatbot became the fastest-growing consumer application in history, reaching 100 million users within two months. It was the moment that turned OpenAI from an AI research lab into a household name.

Microsoft’s bet was suddenly looking very different.

OpenAI’s board learned about the launch on Twitter. According to deposition testimony, board members Helen Toner and Tasha McCauley received no advance notice and discovered ChatGPT by seeing screenshots on social media. 

McCauley described the fact that a “major release” could happen without the board knowing as “extremely concerning.” Toner testified that she wasn’t surprised — she was “used to the board not being very informed” — but believed it demonstrated that the company’s processes for decisions with “material impact on the mission were inadequate.”

Altman, according to one filing, characterized the release as a “research preview” using existing technology. He said the board “had been talking for months” about building a chat product, but acknowledged that he probably did not send the board an email about the specific release.

As its biggest investor, Microsoft pushed OpenAI to monetize the product’s success.

In mid-January 2023, Nadella texted Altman asking when they planned to activate a paid subscription.

Altman said they were “hoping to be ready by end of jan, but we can be flexible beyond that. the only real reason for rushing it is we are just so out of capacity and delivering a bad user experience.”

He asked Nadella for his input: “any preference on when we do it?”

“Overall getting this in place sooner is best,” the Microsoft CEO responded, in part.

Two weeks later, Nadella checked in again: “Btw …how many subs have you guys added to chatGPT?”

Altman’s answer revealed what they were dealing with. OpenAI had 6 million daily active users — their capacity limit — and had turned away 50 million people who tried to sign up. “Had to delay charging due to legal issues,” he wrote, “but it should go out this coming week.”

ChatGPT Plus launched on Feb. 1, 2023, at $20 a month.

A week earlier, Microsoft made its landmark $10 billion investment in OpenAI. The companies had begun negotiating the previous summer, when OpenAI was still building ChatGPT. The product’s viral success validated Microsoft’s bet and foreshadowed a new era of demand for its cloud platform.

Ten months later, it nearly collapsed.

‘Run over by a truck’

On Friday afternoon, Nov. 17, 2023, OpenAI’s nonprofit board fired Altman as CEO, issuing a terse statement that he had not been “consistently candid in his communications with the board.” Greg Brockman, the company’s president and cofounder, was removed from the board the same day. He quit hours later.

Microsoft, OpenAI’s largest investor, was not consulted. Murati, then OpenAI’s chief technology officer and the board’s choice for interim CEO, called Nadella and Kevin Scott to warn them just 10 to 15 minutes before Altman himself was told.

“Mira sounded like she had been run over by a truck as she tells me,” Scott wrote in an email to colleagues that weekend.

The board — Ilya Sutskever, Tasha McCauley, Helen Toner, and Adam D’Angelo — had informed Murati the night before. They had given her less than 24 hours to prepare.

At noon Pacific time, the board delivered the news to Altman. The blog post went live immediately. An all-hands meeting followed at 2 p.m. By Friday night, Brockman had resigned. So had Jakub Pachocki, OpenAI’s head of research, along with a handful of other researchers. 

A “whole horde” of employees, Scott wrote, had reached out to Altman and Brockman “expressing loyalty to them, and saying they will resign.”

Microsoft didn’t have a seat on the board. But text messages between Nadella and Altman, revealed in the latest filings, show just how influential it was in the ultimate outcome.

At 7:42 a.m. Pacific on Saturday, Nov. 18, Nadella texted Altman asking if he was free to talk. Altman replied that he was on a board call.

“Good,” Nadella wrote. “Call when done. I have one idea.”

That evening, at 8:25 p.m., Nadella followed up with a detailed message from Brad Smith, Microsoft’s president and top lawyer. In a matter of hours, the trillion-dollar corporation had turned on a dime, establishing a new subsidiary from scratch — legal work done, papers ready to file as soon as the Washington Secretary of State opened Monday morning.

They called it Microsoft RAI Inc., using the acronym for Responsible Artificial Intelligence.

“We can then capitalize the subsidiary and take all the other steps needed to operationalize this and support Sam in whatever way is needed,” Smith wrote. Microsoft was “ready to go if that’s the direction we need to head.”

Altman’s reply: “kk.”

The company calculated the cost of absorbing the OpenAI team at roughly $25 billion, Nadella later confirmed in a deposition — enough to match the compensation and unvested equity of employees who had been promised stakes in a company that now seemed on the verge of collapse.

By Sunday, Emmett Shear, the Twitch co-founder, had replaced Murati as interim CEO. That night, when the board still hadn’t reinstated Altman, Nadella announced publicly that Microsoft was prepared to hire the OpenAI CEO and key members of his team.

“In a world of bad choices,” Nadella said in his deposition, the move “was definitely not my preferred thing.” But it was preferable to the alternative, he added. “The worst outcome would have been all these people leave and they go to our competition.”

‘Strong strong no’

On Tuesday, Nov. 21, the outcome was still uncertain. Altman messaged Nadella and Scott that morning, “can we talk soon? have a positive update, ish.” Later, he said the situation looked “reasonably positive” for a five-member board. Shear was talking to the remaining directors.

Nadella asked about the composition, according to the newly public transcript of the message thread, which redacts the names of people who ultimately weren’t chosen.

“Is this Larry Summers and [redacted] and you three? Is that still the plan?”

Summers was confirmed, Altman replied. The other slots were “still up in air.”

Altman asked, “would [redacted] be ok with you?”

“No,” Nadella wrote.

Scott was more emphatic, giving one unnamed person a “strong no,” and following up for emphasis: “Strong strong no.”

The vetting continued, as Nadella and Scott offered suggestions, all of them redacted in the public version of the thread. 

Nadella added Smith to the thread. One candidate, the Microsoft president wrote, was “Solid, thoughtful, calm.” Another was “Incredibly smart, firm, practical, while also a good listener.”

At one point, Scott floated a joke: “I can quit for six months and do it.” He added a grinning emoji and commented, “Ready to be downvoted by Satya on this one, and not really serious.”

Nadella gave that a thumbs down.

The back-and-forth reflected a delicate position. Microsoft had no board seat at OpenAI. Nadella had said publicly that the company didn’t want one. But the texts showed something closer to a shadow veto — a real-time screening of the people who would oversee the nonprofit’s mission.

By evening, a framework emerged. Altman proposed Bret Taylor, Larry Summers, and Adam D’Angelo as the board, with himself restored as CEO. Taylor would handle the investigation into his firing.

Smith raised a concern. “Your future would be decided by Larry [Summers],” he wrote. “He’s smart but so mercurial.” He called it “too risky.” (Summers resigned from the OpenAI board in November 2025, following revelations about his correspondence with Jeffrey Epstein.)

Altman wrote, “id accept it given my conversations with him and where we are right now.” He added, “it’s bullshit but i want to save this … can you guys live with it?”

Nadella asked for Summers’ cell number.

At  2:38 p.m., Altman texted the group: “thank you guys for the partnership and trust. excited to get this all sorted to a long-term configuration you can really depend on.”

Nadella loved the message.

Two minutes later, Smith replied: “Thank you! A tough several days. Let’s build on this and regain momentum.”

Altman loved that one.

Nadella had the last word: “Really looking forward to getting back to building….”

Later that night, OpenAI announced Altman’s return with the newly constituted board.

“We are encouraged by the changes to the OpenAI board,” Nadella posted on X. “We believe this is a first essential step on a path to more stable, well-informed, and effective governance.”

The crisis was resolved, but the underlying tensions remained.

‘Project Watershed’

On December 27, 2024, OpenAI announced it would unwind its capped-profit structure. Internally, this initiative was called “Project Watershed,” the documents reveal.

The mechanics played out through 2025. On September 11, Microsoft and OpenAI executed a memorandum of understanding with a 45-day timeline to finalize terms.

Microsoft’s role was straightforward but powerful. Its approval rights over “Major Decisions” including changes to OpenAI’s structure. Asked in a deposition whether those rights covered a recapitalization of OpenAI’s for‑profit entity into a public benefit corporation, Microsoft corporate development executive Michael Wetter testified that they did.

The company had no board seat. “Zero voting rights,” Wetter testified. “We have no role, to be super clear.” But under the 2019 agreement, the conversion couldn’t happen without them.

The timing mattered. A SoftBank-led financing — internally called Project Sakura — was contingent on the recapitalization closing by year-end. Without the conversion, the funding could not proceed. Without Microsoft’s approval, the conversion could not proceed.

Valuation became a key focus of negotiations. Morgan Stanley, working for Microsoft, estimated OpenAI’s value at $122 billion to $177 billion, according to court filings. Goldman Sachs, advising OpenAI, put it at $353 billion. The MOU set Microsoft’s stake at 32.5 percent. By the time the deal closed after the SoftBank round, dilution brought it to 27 percent. 

OpenAI’s implied valuation was $500 billion — a record at the time (until it was surpassed in December by Musk’s SpaceX). As Altman put it in his deposition, “That was the willing buyer-willing seller market price, so I won’t argue with it.”

For Microsoft, it was a give-and-take deal: the tech giant lost its right of first refusal on new cloud workloads, even as OpenAI committed to the $250 billion in future Azure purchases.

At the same time, the agreement defused the clause that had loomed over the partnership: under prior terms, a declaration of artificial general intelligence by OpenAI’s board would have cut Microsoft off from future models. Now any such declaration needs to be made by an independent panel, and Microsoft’s IP rights run through 2032 regardless. 

The transaction closed on Oct. 28, 2025. The nonprofit remained (renamed the OpenAI Foundation) but as a minority shareholder in the company it had once controlled.

Six days later, OpenAI signed a seven-year, $38 billion infrastructure deal with Amazon Web Services. The company that had “sneaked in there” at the founding, as Nadella put it in 2015, was back — this time as a major cloud provider for Microsoft’s flagship AI partner.

In a post this weekend, OpenAI CFO Sarah Friar made the shift explicit: “Three years ago, we relied on a single compute provider,” she wrote. “Today, we are working with providers across a diversified ecosystem. That shift gives us resilience and, critically, compute certainty.”

Revenue is up from $2 billion in 2023 to more than $20 billion in 2025. OpenAI is no longer a research lab dependent on Microsoft’s cloud. It’s a platform company with leverage. 

In December 2015, Nadella had to ask whether Microsoft had been called to participate in the OpenAI launch. A decade later, nothing could happen without the Redmond tech giant. 

But OpenAI will no longer be theirs alone.

Vega Cloud, a Spokane-area tech startup that makes software to help companies manage their cloud spending, has been placed into the hands of a receiver after declaring it could no longer pay its debts.

Among those debts: nearly $830,000 owed to cloud giant Amazon Web Services. 

Vega Cloud, founded in 2018 and based in Liberty Lake, Wash., had raised $12.2 million and reached about $7 million in annual revenue as of 2023, according to PitchBook data. It had also cracked the GeekWire 200 — ranking #181 in the most recent quarterly update of our Pacific Northwest startup index.

What brought Vega Cloud to this point isn’t clear. Responding to our email inquiry this weekend, co-founder and CEO Kris Bliesner said the company is going through a restructuring via receivership, and said he wished he could say more about the situation.

The company had less than $17,000 in the bank when it was placed into receivership Thursday, Jan. 15, in King County Superior Court in Seattle, the filing shows. It employed about 35 people as of earlier this month, down from about 65 two years ago, according to LinkedIn. 

Receivership is a state-level process often used as an alternative to bankruptcy. In this case, Vega Cloud executed what’s known as an Assignment for the Benefit of Creditors, which puts a neutral party in charge of the company, pauses creditor collections, and places decisions about asset sales and payments under court supervision.

Sometimes those assets sell mostly intact, allowing new investors to give a business another try. But at this point, it’s not yet clear what will happen to the company’s employees or product.

Past ambitions for an IPO

In a March 2024 interview for GeekWire’s special series on Spokane, Bliesner described Vega Cloud’s trajectory in optimistic terms, saying the company was planning a $20 million to $30 million funding round and eyeing the public markets.

“We’re trying to push the envelope at Vega to maybe do the IPO route,” Bliesner said at the time. “We think that’s a viable thing for us.”

Vega Cloud operates in the sector known as FinOps, short for financial operations, helping companies get a handle on their cloud spending by bringing together finance and technical teams to track costs and avoid waste.

This is becoming more and more important as businesses pour money into cloud computing, often without realizing how much they’re spending on unused resources. Vega Cloud focused specifically on helping mid-sized companies manage spending across AWS, Azure, and Google Cloud, using automated tools to spot problems and recommend fixes. 

In the tight-knit Spokane tech community, Vega Cloud has been seen as a startup with the potential to make it big. We took note of the company in 2022, when it raised $9 million.

Investor and entrepreneur Martin Tobias, a longtime fixture in Pacific Northwest enterprise tech, invested in Vega Cloud shortly after moving from Seattle to Spokane during the pandemic. He told us in early 2024 that it would probably be one of his most successful investments. 

Tobias said Bliesner was exactly the kind of founder he looks for: someone with deep experience in a market who had tried to solve something one way, realized it wasn’t going to scale, and came up with a better solution.

“He took a new approach to an old problem,” Tobias said at the time. 

Bliesner previously co-founded cloud migration startup 2nd Watch, which raised about $56 million before selling a majority interest to Singapore-based investor ST Telemedia.

Financial details from the filing

Vega Cloud’s court filings give an inside look at the privately held business.

First, the company had real customers and revenue. The filings list contracts with companies including Paramount, Hearst, Deloitte, Molina Healthcare, John Wiley & Sons, and Cal Poly, among others. It lists roughly $264,000 in accounts receivable.

The largest secured creditor is Sun Mountain Private Credit Fund I, owed $3.5 million. That debt is backed by Vega Cloud’s intellectual property — its software, patents, trademarks, and domain names. Any proceeds from a sale of those assets would go first to that lender.

In addition to the roughly $830,000 owed to AWS, the court records show convertible promissory notes totaling about $2.5 million that were issued to investors throughout 2025.

The records list current and former employees who are owed unpaid commissions, bonuses, and expense reimbursements, with some bonus obligations dating back to 2023. The company also owes payroll and withholding taxes to the IRS and multiple state tax agencies.

Bliesner is the largest shareholder at about 30%. Other significant investors include Album Ventures (10%), Cowles Company (3%), Rudeen & Company (3%), Kick-Start III and IV (combined 4%), Tacoma Venture Fund (1.5%), and Pitbull Ventures (1%). 

The shareholder list also includes Voyager Capital, Alliance of Angels, Incisive Ventures, and Morning Star Foundation, along with dozens of individual investors.

Under court supervision, the receiver can now take possession of Vega Cloud’s assets and records, secure its bank accounts and data, evaluate and sell assets such as intellectual property, collect remaining receivables, and distribute proceeds to creditors in priority order.

The filings do not include a timeline for asset sales or any plan for the business to continue operating. Those details typically emerge later through receiver reports.

Someone listening to last week’s GeekWire Podcast caught something we missed: a misleading comment by Alexa during our voice ordering demo — illustrating the challenges of ordering by voice vs. screen. We followed up with Amazon, which says it has fixed the underlying bug.

On this week’s show, we play the audio of the order again. Can you catch it? 

Plus, Microsoft announces a “community first” approach to AI data centers after backlash over power and water usage — and President Trump scooped us on the story. We discuss the larger issues and play a highlight from our interview with Microsoft President Brad Smith.

Also: the technology capturing images of every fan at Lumen Field, UK police blame Copilot for a hallucinated soccer match, and Redfin CEO Glenn Kelman departs six months after the company’s acquisition by Rocket.

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Audio editing by Curt Milton.

A bill to open up strip malls, big-box stores, and other commercial land for housing development across Washington state gets its first hearing today, with what might seem an unlikely supporter: Microsoft.

The tech giant is urging lawmakers to pass SB 6026, which would flip the default setting on commercial zoning: instead of requiring developers to seek permission for housing on commercial land, cities of more than 30,000 people would have to allow it in qualifying areas.

In other words, no more lengthy battles to turn half-empty strip malls into apartments.

It’s one piece of a broader strategy that Microsoft is laying out after more than five years and $750 million invested in affordable housing across the region, mostly in the form of a revolving loan fund. In a report released this week, the company makes the case that Washington’s housing crisis is solvable, but only if policymakers treat it as a systemic problem rather than a collection of isolated issues. 

The report draws on lessons learned from Microsoft’s housing investments, which the company says are on track to create or preserve more than 16,000 affordable homes so far across King County and the broader region.

“We greatly underestimated the size, scope, and complexity of the problem,” acknowledged Jane Broom, senior director of Microsoft Philanthropies, in an interview with GeekWire this week. “We didn’t quite realize the interconnectedness of the housing sector, from shelter space to low-income housing to workforce housing to market-rate housing.”

She explained, “If you underperform in one of those areas, it greatly impacts the whole.”

Why does Microsoft care about housing? Broom said it comes down to economic opportunity and quality of life. Housing affordability has risen to become the top concern among Washington voters, she said, threatening the state’s ability to attract and retain workers.

Broom pointed to anecdotes about school teachers and essential workers commuting 90 minutes each way because they can’t afford to live closer, and young professionals leaving the region entirely because they can’t find affordable housing.

Microsoft added housing to its portfolio of community investments in 2019, alongside longstanding commitments to education, transportation, and arts and culture. The company’s report this week lays out a four-point plan based on its lessons learned:

• Unlock more land for housing, especially underused commercial property like strip malls and big-box stores, by making residential development the default in commercial zones.
• Fix the permitting process to make it faster and more predictable, removing unnecessary delays that add costs and drive developers out of the market.
• Lower construction costs through innovation in materials and methods, expanded tax incentives, and use of AI to streamline regulatory compliance.
• Build long-term public-private partnerships with clear accountability, leveraging private and philanthropic capital alongside public investment.

Another long-term opportunity mentioned in the report is AI. Broom said Microsoft is working with tech companies that serve municipal governments to integrate AI into permitting systems, helping to sort through complex building codes and regulatory requirements more quickly.

Some developers are already experimenting with the technology, she said, uploading building codes and municipal regulations to AI systems that can automatically flag whether a proposed design will comply, or how to optimize plans for housing affordability.

Microsoft isn’t the only local tech giant addressing the housing crisis. Amazon has committed more than $3.6 billion to affordable housing through its Housing Equity Fund, with more than $780 million directed toward the Seattle area since 2021. 

The two companies have taken different approaches. Microsoft has focused primarily on the Eastside and middle-income housing, while Amazon has pursued project-by-project investments targeting lower-income households.

However, they are often on the same page on housing policy, Broom said.

“Thematically, we’ve always been aligned and supportive,” she said. “This is really hard and complicated, and this state is making it much more difficult than it really needs to be.”

Editor’s Note: Microsoft underwrites GeekWire’s independent coverage of civic issues. Learn more about underwritten and sponsored content on GeekWire.

The Microsoft Library in Redmond has long been a quiet anachronism in the middle of the high-tech campus, a place where authors gave talks and employees checked out old-fashioned paper books, including titles recommended by CEO Satya Nadella and other execs.

That chapter of the company’s history is now closing.

The Verge broke the news Thursday that Microsoft’s traditional library is going away as part of what Microsoft described internally as a shift to a “modern, AI-powered learning experience.”

Responding to an inquiry from GeekWire, the company confirmed that its libraries in Redmond, Hyderabad, Beijing, and Dublin closed as of this week and “are being repurposed into collaborative spaces for group learning and experimentation,” where employees can explore emerging technologies.

“We’re evolving Microsoft Library locations and services to better support how employees learn, stay current, and build new skills,” a Microsoft spokesperson said via email. The changes are already underway and will roll out fully in the coming weeks, according to the company.

In an internal FAQ obtained by The Verge, Microsoft described the new approach as a “Skilling Hub” and acknowledged that the decision “affects a space many people valued.”

The shift also includes cuts to employee subscriptions for newspapers and industry reports. Publications affected include The Information and Strategic News Service, which had provided global reports to Microsoft employees for more than two decades.

Microsoft said it continues to offer access to more than 20 digital resources and subscriptions, “prioritizing those most valuable to employees.”

Strategic News Service didn’t mince words about Microsoft’s AI-focused rationale.

“Technology’s future is shaped by flows of power, money, innovation, and people — none of which are predictable based on LLMs’ probabilistic regurgitation of old information,” Berit Anderson, the company’s chief operating officer, told The Verge.

The library has moved around over the decades, from the original Building 4 to Building 92 most recently. The news of the closure drew a nostalgic response on X from Steven Sinofsky, the former Windows president, who called the library “a crown jewel of the early days.”

“They bought every PC book and two copies of every software,” Sinofsky wrote. “If you found one you needed that they didn’t have, they acquired it.”

We’re excited to announce a new GeekWire event for 2026: “Agents of Transformation: Inside the AI Shift.” This half-day summit will be held the afternoon of Tuesday, March 24, in Seattle, exploring how agentic AI is reshaping work, creativity, and leadership.

The event, presented by Accenture, features fireside chats, expert panels, and real-world stories from technology leaders, business execs, and others navigating how AI is changing the way we work and lead, from copilots and automation to the rise of intelligent agents.

Tickets are available now, with discounted early bird rates set to end Feb. 24. Speakers will be announced in the coming weeks.

AI agents is the tech industry’s obsession right now, but there can be a big gap between the pitch and the reality. We’re bringing together people who are in the thick of it to talk candidly about what they’re seeing: breakthroughs, challenges, and what comes next.

The event is part of GeekWire’s longstanding tradition of convening tech, business, and policy leaders for insights and new connections. Hosted at one of our favorite Seattle venues, Block 41, the afternoon will include networking opportunities before, during, and after the program, bringing together founders, executives, and technologists from across the region.

It builds on an ongoing GeekWire editorial series, underwritten by Accenture, spotlighting how startups, developers and tech giants are using intelligent agents to innovate. 

For sponsorship opportunities, contact events@geekwire.com.

Details:

• When: Tuesday, March 24, 2026, 1:30–5:30 p.m.
• Where: Block 41, 115 Bell St., Seattle
• Tickets: Early bird pricing is $145 through Feb. 24. Register here or below.

Amazon has spent two decades trying to disrupt Walmart’s dominance. Now, it appears the e-commerce giant is taking those efforts to a whole new scale.

A new proposal for a massive, 229,000-square-foot Amazon facility in suburban Chicago looks and feels a lot like a classic Walmart superstore but with distinctive Amazon elements, including the ability to order items via app or kiosk for fulfillment from the back of the store.

The company describes the plans as part of its culture of experimentation — calling it “a new concept that we think customers will be excited about.” Amazon says the store will offer fresh groceries, household essentials, and general merchandise, making it convenient for customers to shop a broad selection of items in one trip.

“This could just be another experiment, but as experiments go, it reveals a degree of Walmart jealousy that we didn’t expect,” wrote analysts Mike Levin and Josh Lowitz of Consumer Intelligence Research Partners (CIRP), in a report to subscribers this morning.

CIRP notes that while Amazon dominates e-commerce, online shopping accounts for less than 20% of U.S. retail spending, leaving the vast majority of consumer dollars on the table. 

Amazon has tried a variety of physical retail formats over the years, with mixed results, in addition to its acquisition of Whole Foods for $13.7 billion in 2017. Whole Foods CEO Jason Buechel was named a year ago to oversee Amazon’s Worldwide Grocery Stores business, including its Amazon Fresh stores.

The company says it already serves more than 150 million grocery shoppers in the U.S., generating over $100 billion in grocery sales in 2024.

But with data showing that 93% of Amazon customers still shop at Walmart, CIRP suggests this new superstore concept is Amazon’s admission that capturing the remaining addressable market requires building a physical moat that rivals the scale and utility of its biggest competitor.

While the footprint screams “traditional big box,” the plans signal that Amazon is attempting to put its own spin on the superstore format.

Filings with the Village of Orland Park indicate that a large portion of the building’s floor plan is designated for “back of house” operations that support in-store and pickup orders. Part of the idea is to solve a headache that plagues modern grocery stores: the clash between in-store shoppers and gig-economy workers.

During an Orland Park planning commission hearing, an Amazon rep described a tech-enabled experience where the digital and physical worlds merge for general merchandise.

A customer might find a sweater on the rack in blue, but want it in red. Instead of searching through piles of inventory, they could use a dedicated app or in-store kiosk to request the item from the back room, picking it up at the front counter when they are finished shopping.

This is similar to an Amazon experiment at its Whole Foods locations — building a “store within a store” to bridge the gap between niche organic offerings and mass-market items.

Amazon last fall unveiled an automated micro-fulfillment center attached to a Whole Foods in Plymouth Meeting, Pa. The concept allows shoppers to browse organic produce in the aisles while simultaneously ordering non-Whole Foods items — like Tide Pods, Pepsi, or Doritos — via an app. Robots in the back pick the items, and the full order is ready for the customer on site.

The Orland Park superstore appears to be an industrial-sized evolution of that experiment.

“We like to explain it as: ‘It’s the best that Amazon has to offer under Whole Foods, Fresh and their online offerings,’ ” said Katie Jahnke Dale, a lawyer representing Amazon at the hearing.

The site plan includes dedicated queuing areas for delivery drivers and separate pickup lanes for customers, streamlining the flow of goods without disrupting the in-store experience.

The planning commission voted 6-1 to recommend approval of the project. The proposal now heads to the Orland Park Village Board of Trustees for a final vote, which is scheduled for Jan. 19. If approved, village officials estimate the store could open in late 2027.

President Trump was right about Microsoft — but he only leaked part of the story.

Microsoft is changing its approach to building massive data centers for artificial intelligence, unveiling what it calls a “community first” initiative in response to growing opposition from people across the country facing higher electricity bills and dwindling water supplies.

The new plan, announced Tuesday morning in Washington, D.C, includes pledges to pay the company’s full power costs, reject local property tax breaks, replenish more water than it uses, train local workers, and invest in AI education and community programs.

“This sector worked one way in the past, and needs to work in some different ways going forward,” said Brad Smith, Microsoft president and vice chair, in an interview with GeekWire. He later described the shift as “both the right thing to do and the smart thing to do.”

Trump made headlines Monday night with a Truth Social post in advance of the news, saying his administration has been working with tech companies “to secure their commitment to the American People.” He called Microsoft “first up” and said it would “make major changes … to ensure that Americans don’t ‘pick up the tab’ for their POWER consumption.”

Backlash against AI expansion

Microsoft’s rollout comes at a critical juncture for tech. 

Amazon, Google, OpenAI, Microsoft and others are betting hundreds of billions of dollars on AI, but those ambitions hinge on their ability to build out the infrastructure to support them — a prospect that depends increasingly on the cooperation of local communities that have grown skeptical of the costs and tradeoffs.

Smith said Microsoft has been developing its initiative since September. He described it as a response to shifting public sentiment — which he witnessed firsthand during visits to his home state of Wisconsin for Microsoft’s data center expansion. Back in 2024, local residents wanted to talk about jobs. By last October, the big topics were electricity prices and water use.

“We saw this catch fire, to a degree, for many other companies in many other places around the country as each month unfolded,” he said. 

In data‑center hubs such as Virginia, Illinois and Ohio, residential power prices jumped 12–16% over the past year — noticeably faster than the U.S. average, according to U.S. government data — as grid operators scrambled to add capacity for large new facilities.

The issue has drawn scrutiny on Capitol Hill. Last month, three Democratic senators launched an investigation into whether tech giants are raising residential power bills, sending letters to Amazon, Microsoft, Google and Meta. An Amazon-funded study found that the company more than covers the utility costs associated with its electricity use in some regions.

Microsoft’s change of course

Microsoft’s new approach, as outlined in a post by Smith, is a clear departure from its own past practices. The company has accepted tax abatements for data centers in states including Ohio and Iowa, and its identity was kept under wraps in a Michigan township until recently.

In the interview, Smith promised new levels of transparency. 

He acknowledged that the traditional approach in the industry was for companies to buy land under nondisclosure agreements to avoid driving up prices — giving them a competitive edge but leaving communities in the dark about who was moving in and how they would operate.

“That is clearly not the path that’s going to take us forward,” he said. The companies that succeed with data centers in the long run, he added, “will be the companies that have a strong and healthy relationship with local communities.”

Asked if Microsoft hopes to inspire or compel others to follow suit, Smith stopped short of positioning Microsoft as the sole leader, crediting Amazon for “really good and well-executed work in this space” while adding that “the industry is going to need to set a higher bar for itself.”

Microsoft’s plan starts by addressing the electricity issue, pledging to work with utilities and regulators to ensure its electricity costs aren’t passed on to residential customers. Smith cited a new “Very Large Customers” rate structure in Wisconsin as a model, where data centers pay the full cost of the power they use, including grid upgrades required to support them.

The company’s other commitments include:

• A 40% improvement in water efficiency by 2030, plus a pledge to replenish more water than it uses in each district where it operates. (Microsoft cited a recent $25 million investment in water and sewer upgrades in Leesburg, Va., as an example.)
• A new partnership with North America’s Building Trades Unions for apprenticeship programs, and expansion of its Datacenter Academy for operations training.
• Full payment of local property taxes, with no requests for municipal tax breaks.
• AI training through schools, libraries, and chambers of commerce, plus new Community Advisory Boards at major data center sites.

Record spending on AI infrastructure

Microsoft did not say how much it plans to spend on these new initiatives, separate from its broader capital expenditures, which approached $35 billion in its first fiscal quarter. 

Asked if the company would truly be able to follow through on all of these commitments, Smith said, “we have to follow through.” Internally, he said, Microsoft is “bringing some groups together” and “adding resources” to execute the plan, describing it as essential to the company’s long-term business strategy.

As for how Microsoft’s position squares with OpenAI’s push for federal incentives to support large-scale AI infrastructure projects, Smith drew a distinction. He said he supports federal help with permitting and land access, but not electricity subsidies.

“When it comes to things like electricity prices, when it comes to the water system, when it comes to training for local jobs, these are local issues,” he said.

Smith’s post references the Trump administration’s AI Action Plan and pledges to work with the Department of Labor on workforce programs. Microsoft says it will announce specific community partnerships during the first week of July, timed to America’s 250th anniversary.

This week on the GeekWire Podcast: Amazon and Microsoft are racing to define the next era of consumer AI, on multiple fronts. We discuss Amazon’s attempt to upgrade Alexa into a true generative AI home chatbot — complete with a new web portal and updated Alexa app — while Microsoft tries to win over retailers with a new Copilot Checkout feature.

Plus, we explore Google’s upcoming “AI Inbox” for Gmail, which promises to act like an executive assistant for your email. We talk about our smart bird feeder experiment that resulted in “fuzzy birds,” due to improper focal length. And we share our initial experience with AI automation on the Windows PC desktop using Vy from Seattle startup Vercept.

Finally, we offer a Netflix recommendation, Cover-Up, the documentary about legendary investigative journalist Seymour Hersh. We couldn’t help but wonder: what would uncover if he could digitize all those notes and put them through an AI model?

And on that theme, we lament the loss of a major American newspaper, the Pittsburgh Post-Gazette, and reminisce about the time GeekWire made an appearance on its editorial page.

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

With GeekWire co-founders Todd Bishop and John Cook. Edited by Curt Milton.

A former Expedia Group employee who amassed 20 terabytes of illicit footage of women by hiding spy cameras throughout the company’s headquarters — including bathrooms — was sentenced to four years in prison Friday in King County Superior Court in Seattle. 

Marcelo Vargas-Fernandez, 44, pleaded guilty in December to 14 counts of first-degree voyeurism and two counts of violating a sexual assault protection order for contacting one of the victims in October 2025 in an attempt to convince her not to testify.

Before handing down the sentence, Superior Court Judge Janet Helson heard statements read on behalf of several victims, identified in court only by their initials, who described the lasting trauma and “shattered” sense of security caused by the invasion of their privacy.

“I will wonder for the rest of my life whether there is more footage of me somewhere,” said one of the victims in her statement. “The constant question, ‘am I being watched?’ is exhausting.”

Gary Ernsdorff, senior deputy prosecuting attorney, described the scope of the case as “staggering,” noting that investigators identified nearly 60 potential victims in the 20 terabytes of data seized from Vargas-Fernandez. Ernsdorff told the court that the defendant meticulously organized the illicit footage by name, description, and activity.

“We could spend, frankly, a career going through the evidence and parsing out and trying to identify more victims,” Ernsdorff said.

In addition to bathrooms, prosecutors said in court Friday that cameras were also found mounted under desks to record people sitting in chairs, hidden inside the door and dashboard of his vehicle to record passengers, and even installed inside the bathroom and living room of one victim’s private apartment.

Vargas-Fernandez sat in red prison garb, his hands clasped on a piece of paper on the table, at one point removing his glasses to wipe his eyes as one statement was read.

Later, addressing the court, Vargas-Fernandez apologized to the victims, his family, and his former employer, admitting that he “failed trust” and created “pain and fear.” He told the judge he should have asked for help to deal with depression and personal issues.

“This is my fault,” he added.

His attorney, Court Will, emphasized Vargas-Fernandez’s efforts toward rehabilitation over the past two years, noting that he has completed a psychosexual evaluation, attended weekly sex offender treatment, and installed accountability software on his devices.

“He’s not before the court to make any excuses whatsoever,” Will said. 

In addition to the prison term, Judge Helson sentenced Vargas-Fernandez to up to 36 months of community custody and issued no-contact orders to protect the victims.

“These are not victimless crimes,” Judge Helson told him. “These are crimes with real victims who experience serious consequences in their lives.” 

Expedia Group temporarily closed its Seattle headquarters for three days following the discovery to conduct security sweeps but found no additional devices at that time.

Class-action lawsuits have been filed over the case, including one against both Expedia Group and its security contractor, Securitas. The suits allege negligence, claiming that the security team failed to act on the initial report of hidden cameras in December 2023, allowing the recording to continue for weeks before police were finally notified in January.

“Expedia is committed to protecting the privacy, safety, and security of our employees and guests across all offices,” an Expedia spokesperson said in a statement today. “We fully cooperated with law enforcement throughout this investigation and are pleased that our support contributed to holding the individual accountable.”

The investigation by Seattle police began after hidden cameras were discovered under the sinks of single-occupancy, gender-neutral bathrooms at the company’s campus on the Seattle waterfront. According to court records, an employee first spotted a recording device taped under a sink on Dec. 4, 2023, and reported it to onsite security. However, the devices were not immediately identified as cameras or turned over to police at that time.

The cameras reappeared weeks later.  On Jan. 11, 2024, an employee discovered the devices again and alerted security, who then contacted Seattle police. Witnesses reported seeing Vargas-Fernandez acting suspiciously in the area while the restrooms were closed.

Following his identification as a suspect, Seattle police executed a search warrant at Vargas-Fernandez’s home in Lynnwood on Feb. 1, 2024. An electronics sniffing dog was used to sweep the apartment. The search recovered substantial evidence, including at least 33 spy cameras, 22 SD cards, and six hard drives.

Ernsdorff, the prosecuting attorney, said in court that investigators found no evidence the footage was uploaded or shared online, despite finding evidence that Vargas-Fernandez had visited websites featuring similar illicit content. However, he acknowledged that victims may never have complete certainty about whether their images were distributed.

Bill Gates had a front-row seat for the rise of AI, from his longtime work at Microsoft to early demonstrations of key breakthroughs from OpenAI that illustrated the technology’s potential. Now he’s urging the rest of us to get ready.

Likening the situation to his pre-COVID warnings about pandemic preparedness, Gates writes in his annual “Year Ahead” letter Friday morning that the world needs to act before AI’s disruptions become unmanageable. But he says that AI’s potential to transform healthcare, climate adaptation, and education remains enormous, if we can navigate the risks.

“There is no upper limit on how intelligent AIs will get or on how good robots will get, and I believe the advances will not plateau before exceeding human levels,” Gates writes.

He acknowledges that missed deadlines for artificial general intelligence, or human-level AI, can “create the impression that these things will never happen.” But he warns against reaching that conclusion, arguing that bigger breakthroughs are coming, even if the timing remains uncertain.

He says he’s still optimistic overall. “As hard as last year was, I don’t believe we will slide back into the Dark Ages,” he writes. “I believe that, within the next decade, we will not only get the world back on track but enter a new era of unprecedented progress.”

But he adds that we’ll need to be “deliberate about how this technology is developed, governed, and deployed” — and that governments, not just markets, will have to lead AI implementation.

More takeaways from the letter:

Job disruption is already here. He says AI makes software developers “at least twice as efficient,” and that disruption is spreading. Warehouse work and phone support are next. He suggests the world use 2026 to prepare, citing the potential for changes like a shorter work week.

Bioterrorism is his top AI concern. Gates warns that “an even greater risk than a naturally caused pandemic is that a non-government group will use open source AI tools to design a bioterrorism weapon.”

Climate will cause “enormous suffering” without action. Gates cautions that if we don’t limit climate change, it will join poverty and infectious disease in hitting the world’s poorest people hardest, and even in the best case, temperatures will keep rising.

Child mortality went backward in 2025. Stepping outside AI, Gates calls this the thing he’s “most upset about.” Deaths for children under 5 years old rose from 4.6 million in 2024 to 4.8 million in 2025, the first increase this century, which he traced to cuts in aid from rich countries.

AI could leapfrog rich-world farming. Gates predicts AI will soon give poor farmers “better advice about weather, prices, crop diseases, and soil than even the richest farmers get today.” The Gates Foundation has committed $1.4 billion to help farmers facing extreme weather.

Gates is using AI for his own health. He says he uses AI “to better understand my own health,” and sees a future where high-quality medical advice is available to every patient and provider around the clock.

AI is now the Gates Foundation’s biggest bet in education. Personalized learning powered by AI is “now the biggest focus of the Gates Foundation’s spending on education.” Gates says he’s seen it working firsthand in New Jersey and believes it will be “game changing” at scale.

Read the full letter here.

[Editor’s Note: Agents of Transformation is an independent GeekWire series and March 24, 2026 event, underwritten by Accenture, exploring the people, companies, and ideas behind AI agents.]

Microsoft is making its own bid to turn AI conversations into agentic commerce, announcing a new feature called Copilot Checkout that lets users complete purchases directly within its AI chatbot, without being redirected to an external website.

The company is betting that its existing enterprise technology footprint and established relationships with large retailers will give it an edge over OpenAI, Google, and Amazon in winning over merchants wary of giving up control to retail rivals or AI intermediaries.

“We’ve designed it in such a way that retailers own those relationships with the customers,” said Kathleen Mitford, corporate vice president of global industry marketing at Microsoft. “It is their data, it is their relationship, and that’s something that’s really important to us.”

It’s part of a broader AI rollout by Microsoft at NRF 2026, the retail industry’s annual conference in New York. Microsoft is also launching Brand Agents, pitched as a complete solution for Shopify merchants to add AI assistants to their websites, along with new AI tools to assist store employees and help retailers enhance their online product listings and metadata.

Copilot Checkout works by surfacing products from partner retailers within Copilot search results. Purchases can be completed without leaving the conversation. Microsoft says the retailer remains the merchant of record, handling fulfillment and customer service.

But will people buy in chat?

The bigger question for the tech industry is whether chat-based commerce is actually the next big thing. Forrester analyst Sucharita Kodali, for example, previously told GeekWire that “e-commerce isn’t a problem that needs to be fixed.” She added that it’s unclear what value chat-based commerce is bringing to retailers, “other than disintermediating Google.”

Microsoft’s Mitford offered a different take in an interview this week, saying that consumer behavior is shifting faster than it may seem. She drew a parallel to how quickly businesses moved from experimenting with AI to putting it into operation over the past year.

“I see the same thing happening with consumers … it just takes a little bit of time,” Mitford said, predicting that the speed of consumer adoption will eventually match the rapid uptake seen in the business world.

Copilot Checkout is rolling out now in the U.S. on Copilot.com, with PayPal, Shopify, and Stripe handling payment processing. Etsy sellers will be among the first available on the platform. Shopify merchants are set to be automatically enrolled following an opt-out window.

That last detail is notable given the backlash Amazon has faced over its “Buy for Me” feature, where brands complained about being included without consent and seeing inaccurate listings. 

Microsoft’s approach is more tightly connected to its partners — the company said Shopify will management the opt-out process for its merchants — but automatic enrollment seems to raise the potential for some of the same concerns. (We’ve contacted Shopify for more information.)

The competitive landscape

More broadly, Microsoft is playing catch-up on the consumer side.

OpenAI launched Instant Checkout in ChatGPT last September, partnering with Shopify and Stripe to let users buy from more than a million merchants. Google followed in November with its own “Buy for Me” feature which lets its Gemini assistant purchase products on a user’s behalf.

Despite its inroads with businesses, Copilot has a fraction of ChatGPT’s market share with consumers. Recent data from Similarweb’s Global AI Tracker showed ChatGPT with about 68% of AI chatbot web traffic, with Google Gemini at 18% and Copilot in the single digits.

But Microsoft has its advantages: Unlike Amazon and Google, which compete directly with retailers through their own marketplaces, it isn’t a retailer. And retail has long been a major vertical for its enterprise cloud and software business, with large chains running on Azure and Microsoft 365.

Mitford said Microsoft is leaning on its existing trust and long-standing relationships with retailers, along with a commitment to responsible AI, to help differentiate itself from rivals.

Microsoft is making the broader case for AI to retailers based on return on investment. A Microsoft-commissioned study from IDC, released in November, found that retail and consumer packaged goods companies are seeing a 2.7x return on every dollar spent on generative AI.

Mitford, a former fashion designer who has been in the technology industry for most of her career, said she sees the retail sector among the leaders in AI uptake across the business world.

The technology, she said, is being “adopted at a pace that I’ve never seen.”

Amazon’s Ring is rolling out a $5,000 solar-powered surveillance trailer for parking lots, construction sites, and events — part of a broader expansion beyond the doorbell and into commercial security.

The new Ring Mobile Security Trailer, announced Tuesday morning at CES, is designed to be an alternative to the heavy-duty rigs often seen at industrial sites. It uses a 360-degree camera with 4k resolution, which the company says ensures high-definition visibility without blind spots.

Ring, acquired by Amazon in 2018, has renewed its focus on security under Ring founder Jamie Siminoff, who returned to the tech giant last year after his 2023 departure.

The move puts Ring in more direct competition with commercial security players like Verkada and Motorola Solutions, which sell cloud-connected cameras and mobile surveillance systems, and traditional industrial providers such as Bosch and Hikvision known for rugged security gear.

Ring’s strategy appears to be leveraging its brand recognition in residential security and Amazon’s infrastructure — including Amazon Sidewalk connectivity and AWS cloud services — to undercut competitors on price as part of a larger system that bridges home and business security.

Set for release this spring, Ring’s trailer can run on line power with battery backup or operate fully off-grid via solar panels. It comes with built-in LTE connectivity, meaning it requires no external internet infrastructure to work. It can also be detached and mounted in a truck bed or used as a standalone station, making it adaptable for temporary deployments like festivals.

It’s part of Ring’s new “Jobsite” security portfolio, which also includes a new Ring Elite camera line designed for large-scale business settings like logistics yards and campuses.

Separately, Ring introduced “Fire Watch,” a new feature developed in partnership with the non-profit Watch Duty. It provides real-time wildfire alerts directly within the Ring app and allows camera owners to voluntarily share periodic snapshots with first responders.

Apart from its new commercial offerings, the company announced several new residential security features and products.

• “Unusual Event Alert” uses AI to learn a home’s routine patterns to filter out false alarms.
• “Active Warnings” use computer vision to identify potential threats and play automated audio messages to deter intruders.
• An updated Ring Car Alarm, available for pre-order today for $50, uses GPS and Sidewalk connectivity to track vehicles and send motion alerts even when parked remotely.
• The new Ring Appstore marketplace will let third-party developers build specialized apps that integrate with Ring cameras and data.
• A new line of sensors priced between $30 and $70 connects via Amazon Sidewalk to operate without Wi-Fi or hubs, covering security, safety, and smart controls.

Ring announced that the Sidewalk network itself is expanding globally, launching in Canada and Mexico in the coming months before reaching Europe, Australia, and Japan later this year.

Desney Tan, who rose from researcher to corporate vice president and managing director of Microsoft Research, announced Monday that he’s leaving the company after 21 years.

Tan became known in part for research in “whole body computing,” physiological sensing, brain-computer interfaces and other novel forms of human-computer interaction. His work spanned areas including Windows multi-monitor functionality, handwriting recognition, motion tracking for Xbox Kinect, and the technology behind the Microsoft Band fitness tracker.

In more recent years, he shifted his focus to healthcare, for a time leading Microsoft Health Futures, the company’s health and life sciences “moonshot factory.” He oversaw major partnerships including Microsoft’s collaboration with Adaptive Biotechnologies.

“New year, new adventures,” Tan wrote on LinkedIn, adding that he’s “signing off with a heart full of gratitude and a deep sense of pride.” He thanked colleagues at Microsoft Research for “the warm home, the unwavering trust, and the inspired pursuit of impactful innovation.”

In a message to GeekWire, Tan said he’s intentionally keeping his options open, without anything concrete lined up yet, so he can experiment with a few different things. 

Beyond Microsoft, he serves on the boards of ResMed and the Washington Research Foundation, and advises startups including surgical navigation company Proprio and cognitive health startup NewDays. He’s also senior advisor and chief technologist at Seattle-based incubator IntuitiveX, and holds an affiliate faculty position at the University of Washington.

Amazon is expanding its consumer AI ecosystem beyond the smart speaker — bringing Alexa+ to the web, revamping its mobile app, and offering its first update on Bee since acquiring the wearable AI startup six months ago.

The announcements, timed to CES in Las Vegas, mark Amazon’s latest effort to catch up in the consumer AI race. While the company’s cloud unit has established itself as a major AI infrastructure and enterprise services provider, Amazon has struggled to match the momentum of OpenAI, Google, and the rapidly growing field of consumer AI startups.

New this morning, Amazon released a streamlined Alexa mobile app that makes the AI assistant the primary focus. The redesigned interface features an “Ask Alexa” prompt anchored at the bottom of the screen, personalized suggestions, and quick access to devices and favorites — a cleaner look that prioritizes the AI assistant over other features.

Amazon says Alexa+, its upgraded AI assistant, is now available in the browser via alexa.com to all customers in its early access program. As previously reported by GeekWire, the web interface extends Alexa beyond voice commands, enabling document uploads, web-based chat integration, and point-and-click control over reminders, calendars, and smart home devices.

Alexa+ uses generative AI to offer smoother conversations and better answers than its predecessor, along with new agentic capabilities such as booking tickets and reservations. 

Amazon is competing against consumer AI rivals such as ChatGPT and Gemini, which have become everyday tools for millions of people. It’s looking to leverage its more than 600 million Alexa-enabled devices, and areas of differentiation such as smart-home controls and device integrations.

The company had an initial false start with a more limited conversational Alexa feature called “Let’s Chat,” first shown publicly in September 2023, but never fully released. Working on Let’s Chat led to “some realizations about how big of an effort we needed to put in with Alexa+,” said Daniel Rausch, vice president of Alexa and Echo, in a recent interview with GeekWire.

Alexa+ started rolling out in March 2025. According to the company, tens of millions of customers are now using Alexa+, with engagement rates two to three times higher than prior Alexa versions.

Rausch said 76% of what customers do with Alexa+ “is not possible with any other AI,” citing scenarios that go beyond chat, such as controlling devices, managing home and family logistics, and completing multi‑step tasks across different services and screens.

Amazon is also betting on hardware to extend its AI ambitions beyond the home.

In a post Monday, Bee co-founder Maria de Lourdes Zollo gave the first public update since Amazon acquired the San Francisco startup last year. Bee makes a $49.99 wearable device that records and transcribes conversations, creating summaries, insights, and suggested actions.

Since joining Amazon, Bee has shipped four major features in 90 days, Zollo wrote, including Voice Notes for capturing thoughts on the go, Actions that connect conversations to email and calendar, and Daily Insights that surface patterns across weeks of interactions.

Zollo described the acquisition as a path toward “ambient AI” — technology that understands and assists users everywhere, “across every surface throughout your day.”

Amazon declined to share details on any plans to integrate Bee with Alexa, leaving open the question of how the wearable fits into the company’s broader AI assistant strategy.

The announcements build on Amazon’s push to bring Alexa+ to third-party hardware, including Sonos and Bose speakers, LG and Samsung smart TVs, and BMW cars.

Rausch said taking Alexa+ further beyond the home will be a big push for Amazon in 2026. He hinted at more to come, including new “personal mobile devices” from Amazon designed to help customers bring Alexa+ with them throughout the day.

This week on the GeekWire Podcast: The FCC delivered a massive shakeup to the drone industry right before the holidays, adding foreign-made drones (most notably from industry giant DJI) to its “Covered List” of national security threats.

While the move effectively bans the sale of future foreign-made drone models in the U.S., we explore why it may represent an unexpected economic opportunity for the Pacific Northwest.

This episode features highlights from a recent interview with Blake Resnick of Brinc, the Seattle-based maker of public safety drones, who lobbied for the U.S. policy change.

Related story: Drone capital of the world? Seattle could be a big winner in the U.S. crackdown on DJI and others

Plus, the results are in. After ignoring John’s advice and deciding to retrofit his 2007 Toyota Camry with a modern infotainment system, Todd shares the outcome. 

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

Seattle cryptocurrency company Coinme said it reached an agreement with Washington state regulators to pause the temporary cease-and-desist order issued against it last month, clearing the way for the company to resume operations in the state.

The Washington State Department of Financial Institutions had ordered Coinme to stop transmitting money for customers, alleging the startup improperly claimed as its own income more than $8 million owed to consumers from unredeemed crypto vouchers.

Coinme said the order was stayed after it provided detailed financial records and operational information to regulators that clarified key details about its business practices. As a result, the company said, it will be able to “continue serving customers in Washington State while addressing any remaining concerns.” 

The state agency had been seeking to revoke Coinme’s money transmitter license, impose a $300,000 fine, and ban CEO Neil Bergquist from the industry for 10 years. 

The agreement, laid out in a Dec. 23 consent order, requires Coinme to segregate Washington customer assets into dedicated accounts within 14 days, and move cash or cash equivalents tied to outstanding Washington kiosk transactions into a segregated account within 30 days. 

The order also requires the company to provide monthly compliance updates to regulators. The underlying charges remain unresolved and could still be litigated, according to the order.

“Our commitment to customer protection and regulatory compliance remains our top priority,” Bergquist said in a statement, noting that Coinme has had a collaborative relationship with the agency dating back to the company’s founding in 2014.

Coinme operates what it calls the nation’s largest cash-to-crypto network through partnerships with MoneyGram and Coinstar. The company had called the original charges an accounting dispute over a discontinued voucher product.