Latest Microsoft 365 outage indicates possible strain on cloud services as AI use grows

The news: Microsoft 365 experienced a widespread outage Tuesday morning, affecting users’ ability to access Outlook, OneDrive, and Teams. Reports began spiking around 9am EST, with most complaints centered on Outlook email.

Outage tracking website Downdetector recorded over 600 reports from the UK and more than 400 from the US early on, with disruptions also affecting users in South Africa and India. Microsoft 365’s website was also affected. Microsoft’s Service health website indicated there were no more issues at 2:20pm EST.

Related outages? Tuesday’s outage is among several the Big Tech company has experienced this year.

• A massive Microsoft Bing outage in May took out OpenAI’s ChatGPT, which uses Microsoft’s Azure cloud service, Copilot, and DuckDuckGo searches. 
• Microsoft 365 had an outage in late November that also left subscribers unable to access its services.
• Other Microsoft outages, including one in July and one in 2023, have been attributed to distributed denial of service (DDoS) attacks.

Microsoft’s service interruption comes a day after OpenAI, which Microsoft has a 49% stake in, launched its much-anticipated Sora video generator. That tool was quickly overwhelmed and users were unable to sign in and test it. 

Security in focus: Microsoft is still reeling from the massive CrowdStrike Windows outage in July that insurers estimated would cost Fortune 500 companies more than $5 billion in losses.

The immense compute power needed for OpenAI’s and Microsoft’s Copilot workflows could be a drain on its cloud data centers. 

• That, paired with AI’s hunger for power, is something the company is addressing by going nuclear, but that solution won’t be viable until 2028.
• If the outages are security-related or a result of DDoS attacks, they could raise concerns about the platform’s stability.

Microsoft is a vendor for the Department of Defense’s $9 billion Joint Warfighting Cloud Capability (JWCC) contract along with Amazon Web Services (AWS), Google Cloud, and Oracle. Repeated outages could affect its long-term outlook as a government contractor.

Our take: Adding data intensive AI services on top of cloud computing and business productivity infrastructure could be starting to take its toll on cloud providers. While this affects the reliability of service, a bigger issue is that it could also tarnish Microsoft’s reputation for reliability.

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