Everyone thought Microsoft was dead. Windows was fading. Apple won. Google won. Then a new CEO quietly spent ~$125 billion buying companies and another ~$13 billion+ investing in companies. Companies he was never supposed to buy or invest in.
February 2014: Satya Nadella becomes CEO of a dying company. His first big move? In September 2014 he spent $2.5 billion on Minecraft – everyone laughed. How would investing in gaming help? But instead of making Minecraft Xbox exclusive, Nadella kept it on PlayStation and Nintendo. Wall street was confused. Why buy something and not lock it down?
Because ~100 million registered users become 140 million monthly active users. Revenue hit $1 billion. This wasn’t about gaming at all. Minecraft was a test run for a radical new playbook: Buy networks of users. Keep them independent. Wire them into your infrastructure. Don’t destroy trust. Nobody realised microsoft was about to use this exact template to execute the greatest acquisition spree in tech industry.
In 2016 Microsoft paid $26.2 billion for LinkedIn. Their largest acquisition ever. Everyone called them desparate but microsoft wasn’t buying a social network. They were buying the B2B identity graph. Then they did something nobody expected.
They let Linkedin stay Linkedin. No microsoft account required, no forced Office integration. Complete independence. LinkedIn revenue exploded from $2.9 billion to $15 billion+. But the true value wasn’t the money, it was what happened when they connected LinkedIn to their other acquisitions.
In 2018 Microsoft paid $7.5 billion to acquire github. Their highest multiple ever. The open source community revolted. Microsoft had been the enemy of open source for decades. Github then had 28 million develoeprs, today it has 180 million. How?
They kept GitHub free, more resources made it better. Then they played their ace card: GitHub Copilot. An AI that writes code for you. Powered by OpenAI. Which brings us to Microsoft’s brilliant move.
While Google and Meta spent billions building AI models from scratch, Microsoft did something different. In 2019 they invested $1 billion in a (then) small company called OpenAI. By 2023 they were widely reported to have made ~$13 billion in total investments/commitments.. They didn’t build AI – they RENTED it. How?
When in November 2022 ChatGPT launched, within 4 months Microsoft had AI in:
- Bing racing Google to market
- Office before Google Workspace
- GitHub Copilot everywhere
- Azure as OpenAI’s exclusive cloud provider + Azure OpenAI access
Competitors are still trying to catch-up but Microsoft was not done buying. The biggest deal was still coming.
2023: Activision Blizzard for $68.7 billion. The biggest in the gaming industry. Regulators tried to block it for 21 months. Call of Duty: Warzone had 100 million players, Candy Crush – 3 billion mobile gamers. Why would Microsoft pay more than most countries’ GDP?
Because Activision completed the puzzle.
- 400 million monthly players = massive attention.
- Attention + first party data = advertising
- Goldmine advertising + LinkedIn B2B data = targeting nobody else can match.
Wait, it gets more insane.
Every acquisition makes the others exponentially more valuable. LinkedIn knows who you work with. Copilot writes better emails. GitHub trains the AI –> Developers code faster –> More Azure projects.
- Microsoft 365 Copilot can draft emails using LinkedIn data about recipients.
- It writes code trained on Github repositiores
- It understands medical terminoloy from Nuance (another acquisition I have not mentioned in this article).
Everything on Azure infrastructure. No competitor has even two of these layers. The numbers are staggering. Microsoft now owns:
- 950 million+ LinkedIn professional profiles
- 180 million+ Github developer profiles
- 550,000+ physician profiles on Nuance
- 400 million Activision gamer profiles
- 140 million Minecraft player profiles
They own every identity graph that matters. And that’s the part most people missed.
Microsoft didn’t “come back” by winning a single product war. They rebuilt the company by buying trust-heavy communities, leaving them intact, and then quietly connecting them through one layer competitors can’t copy overnight: infrastructure.
Not a monopoly of apps. A monopoly of distribution.
So when the next platform shift hits — AI, gaming, work, healthcare — Microsoft doesn’t need to guess where users will be.
They’re already there.
