One of Microsoft's worst outages knocked out Outlook, Teams and the Copilot AI assistant for businesses and government agencies from Asia to Europe to the U.S., and the technology giant struggled Friday to restore services.

Microsoft blamed server problems and said it had no indication the disruption was caused by malicious activity. In its latest update Friday, the company said it was "seeing early stabilization and capacity improvements as recovery actions continue." It said it was using "a measured approach to identify and repair affected infrastructure" and would treat the incident "with urgency and priority until full resolution."

The outage affected Microsoft 365 features that depend on Exchange Online, the company's cloud-based messaging platform for email, calendar, contacts and tasks. Elements that do not rely on Exchange Online remained functional. More than 430 million people use Microsoft 365 apps, according to the company.

Recovery efforts falter

A series of posts by Microsoft on the social media platform X suggested engineers were struggling to get the problem under control. Hours after saying it had restored service health and functionality, the company updated its list of affected services and said it was continuing to address the issue. In a later post, it said changes meant to improve serviceability were "not taking as expected."

Downdetector reported problems from roughly 130,000 users in dozens of countries accessing Outlook on Thursday, though new reports have since fallen from that peak.

Australian Home Affairs Minister Tony Burke, who also serves as the country's cybersecurity minister, said he spoke with Microsoft's top executive in Australia and the government's national cybersecurity coordinator. He said Microsoft told him it did not believe it was dealing with a cyberattack.

"They believe that they are dealing in some ways (with something) similar to what we saw with respect to CrowdStrike where there is an update that has gone awry," Burke told reporters in Sydney. He added that the impact is "very much on email systems."

In July 2024, a global tech outage grounded flights and disrupted hospitals, banks and retailers after Texas-based cybersecurity firm CrowdStrike pushed a faulty update to computers running Microsoft Windows.

Governments affected

Australia's spy agency and federal police were among the organizations caught up in the outage. The U.S. House of Representatives said its users were affected and that its engineers were working with Microsoft.

In Japan, Deputy Chief Cabinet Secretary Masanao Ozaki said the outage affected the government's IT infrastructure and that officials were "keeping a close eye on the developments." The government said it had secured alternative communication tools such as telephones.

Singapore's Government Technology Agency said government emails were down and that it was working with Microsoft to resolve the problem. The Philippines' Supreme Court said the outage affected some of its operations, including email responses.

Businesses, markets

The disruption caused problems at trading firms and delayed some companies' earnings announcements.

Workhorse Group Inc., an electric truck maker based in the U.S., rescheduled its results to Nov. 16 after delaying a quarterly earnings call. Switzerland's Richemont briefly delayed its first-half results announcement Friday.

In Europe, stock exchange operator Euronext said its listing teams were having email problems. British insurer Aviva said it was putting backup plans in place for its earnings calls, and Danish shipping company Maersk warned customers of delays to emails and updates.

In Taiwan, the outage disrupted fund management at securities firms, life insurers and investment trust companies. One company canceled a bond repurchase transaction, a source familiar with the situation told Reuters. Another financial company resorted to using fax to confirm trades, a second source said.

In Hong Kong, Danny Lau, who runs an aluminum firm, said his company's Outlook accounts could not receive updates from U.S. customers. A prolonged outage could "impact the production timeline," he said. Some Hong Kong banks also saw part of their operations disrupted.

Indian airlines Air India, IndiGo and Akasa Air said their email support services were affected. Air India and IndiGo said flight operations were unaffected. Air India said it temporarily rerouted its email services so customer queries would continue to reach it.

OpenAI and Anthropic each said they had problems connecting with Microsoft 365 tools, underscoring the ripple effects as more people use AI platforms to interact with other companies' software.

Questions about reliability

It is the second disruption to hit Microsoft 365 this year. The company also had 365 outages in January and in October last year, and last month it reported an outage of its Azure cloud platform that affected its productivity software and industries worldwide.

Josh Gilbert, a market analyst at trading platform eToro, said investors would likely shrug off the outage for now because few customers can leave the Microsoft ecosystem overnight.

"The bigger worry is that this isn't the first 365 outage this year, and if reliability starts to look like a recurring problem, it hands every IT department a reason to think twice before putting even more of their business in one provider's hands," he said.