Microsoft dethrones Jensen Huang's Nvidia, then faces 18-hour global outage entering second day: What went wrong?

This week, Microsoft overtook Nvidia as the world's second-most valuable company. Shares of Microsoft were down 0.4 per cent at $543.25, while Nvidia lost more than 6 per cent and was last at around $167.11. Nvidia shares extended losses on Tuesday, putting the chip giant on track to shed more than $470 billion in market value over two sessions.

Nvidia is facing uncertainty over the outlook for AI and after it was revealed that its CEO Jensen Huang had a relationship with an alleged suspected Chinese spy Alice Huang. The tech billionaire also had an intimate relationship with a second employee at the chipmaking giant, bringing the number of women romantically linked to the married billionaire executive to three, according to multiple media outlets.

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Jensen Huang, 63, resigned Thursday after reports that he had affairs with Kimberly Powell, Nvidia’s vice president of health care, and Alice Huang, a Chinese business executive whom US intelligence officials suspect of working for Beijing.

Microsoft outage enters second day

Just days after Microsoft took over Nvidia as the world's most valuable company, a massive global outage impacted Outlook, Teams and Copilot and it is going on for at least 18 hours. This is reportedly one of the company’s worst outages stretched beyond 12 hours, disrupting communications for businesses and governments worldwide, according to New York Post.

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Microsoft blamed server problems for the outage and said it was not aware of any malicious activity. The tech giant said in its latest update on Friday that it was seeing signs of stabilization after implementing fixes more broadly to attain a persistent recovery of services.

Reason behind Microsoft outage

Microsoft stated that the cause was an overloading of some of its servers, after other ones had become "unexpectedly unavailable". Microsoft initially identified elevated server load across multiple regions as a key factor behind the disruption. However, the company later clarified that the problem was not necessarily caused by an overall increase in user traffic. Instead, a large number of servers had become unexpectedly unavailable, shifting the load onto the remaining infrastructure.

The disruption hit government agencies in Australia, Japan, and the United States, and caused disruptions at trading firms, delays to companies publishing their results and airlines warning customers of delayed communication. US AI companies OpenAI and Anthropic said they had faced issues with Microsoft connectors, while Indian airlines IndiGo, Akasa Air and Air India said their email support services were impacted.

Microsoft faced an outage with its 365 services in January this year and also in October last year. Last month, it reported an outage of its Azure cloud platform that impacted its suite of productivity software, and a range of industries worldwide.

Is Microsoft outage fixed?

Microsoft said on Friday that a patch applied to part of its infrastructure was producing positive results for server stability. The company reported improvements after deploying an upstream authentication and routing configuration component patch, while continuing to monitor the affected infrastructure. However, it had not declared the outage fully resolved, and some users could continue experiencing disruptions.

Microsoft says it is seeing "encouraging recovery progress" in Europe, and North America is "improving", but adds "some users may still experience intermittent issues". Earlier, it said the issue wasn't caused by a cyber-security breach. The company said it is now seeing "encouraging recovery progress in Europe", with service availability and email delivery performance "improving across a growing portion" of infrastructure.

"Japan remains comparatively more stable, while North America is also improving; however, some users may still experience intermittent issues as recovery actions continue," the online statement says. Microsoft added it is focussed on "addressing the remaining areas of disruption".

Microsoft outage hits US cities

Meanwhile in the US, several municipal governments across the country said they’re unable to do work as long as the systems were down. Baltimore County Government staff were unable to send or receive issues. The government of Jacksonville, Florida and Austin, Texas employees were also reporting issues.