April 30 (UPI) -- Microsoft announced Wednesday that it has expanded its cloud and AI infrastructure in Europe and will follow local laws, hours before the company announced better-than-expected earnings.
The expansion will allow each country to "fully use these technologies to strengthen their economic competitiveness," said Microsoft Vice Chair and President Brad Smith, "and they include a promise to uphold Europe's digital resilience regardless of geopolitical and trade volatility."
Later Wednesday evening after the markets closed, Microsoft announced first-quarter revenue of $70.7 billion and earning per share of $3.46, both numbers being better than analysts' early projections.
Microsoft plans to increase its European datacenter capacity by 40% over the next two years, across 16 European countries, which when combined with recent construction will more than double its European datacenter capacity between 2023 and 2027. This will result in cloud operations in more than 200 data centers across the continent.
Microsoft said it will invest tens of billions of dollars every year, and each investment will be "permanent structures and subject to local laws, regulations, and governments."
"Like every citizen and company, we don't always agree with every policy of every government. But even when we've lost cases in European courts, Microsoft has long respected and complied with European laws," Smith said.
He added that Microsoft understands that European laws apply to its business practices, and that includes the European competition law and the Digital Markets Act, among others.
"We're committed not only to building digital infrastructure for Europe, but to respecting the role that laws across Europe play in regulating our products and services," Smith said.
However, Smith noted that "in the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court."
He added that Microsoft has a demonstrated history of pursuing litigation when that has been needed to protect the rights of our customers and other stakeholders," which included four lawsuits filed against the U.S. Executive Branch when Barack Obama was President, in order to "protect the privacy of our customers' data in the United States and Europe."
Microsoft also went before the Supreme Court during President Donald Trump's first term and scored a successful decision that upholds the rights of employees who are also immigrants.
"When necessary, we're prepared to go to court," Smith said, "We are confident of our legal rights to ensure continuous operation of our datacenters in Europe. And we are prepared to back this confidence with our contractual commitments to European governments."
Smith also promised that Microsoft will fight to protect the rights of its European customers, and its data from unauthorized access.
"We have consistently fought legal demands that conflict with European law and have taken our challenges all the way to the Supreme Court of the United States," he said.
Microsoft has reportedly made a commitment it calls "Defending Your Data," which is an agreement to fight any government demand "for EU public sector or enterprise customer data where we have a legal basis for doing so."
Under that commitment, Microsoft has promised "to compensate customers if we disclose their data in violation of EU law."
Microsoft announces earnings
After the stock market closed at 4 p.m., Microsoft announced revenue grew 13% in one year, and net income climbed 18% to $25.8 billion as the company braces for the effects of the Trump administration's tariffs.
The tech company's shares closed at $395.26, up 0.31% and rose 6% in extended trading. The company has a market capitalization of $2.94 trillion, No. 2 behind Apple's $3.192 billion.
