The tech titan's pledges come as the return of President Donald Trump has upended the relationship between the United States and Europe, reversing decades of US policy.
Trump has taken umbrage over the European Union's rules against Big Tech -- dominated by US giants including Microsoft -- threatening retaliation against any moves.
But Microsoft President Brad Smith struck a positive note during a visit to Brussels.
"We are at a moment in time when business needs to be a bridge across the Atlantic," Smith said.
Microsoft is expanding its data centre operations in 16 European countries and help build an artificial intelligence "ecosystem" on the continent.
It also wants to establish partnerships with European cloud players. Currently, US tech firms -- Amazon, Google and Microsoft -- dominated the cloud market in Europe.
But Europe's dependence on US tech has been called into question since Trump's return and threats to impose tariffs, take over Greenland and cut support for Ukraine.
The worry is that Washington could use its tech dominance as a weapon in any standoff with Brussels if transatlantic ties, already strained, deteriorate further.
For example, Europeans worry access to US servers could possibly be cut if Trump, whose ties with tech titans have grown, opted to use this leverage.
Microsoft's Smith alluded to this scenario in a blog post published on Wednesday without ever naming Trump, describing it as "unlikely" to occur.
But, Smith vowed, if Microsoft was asked to suspend or cease cloud operations in Europe, it would "promptly and vigorously contest such a measure".
"We are committing today that if any government anywhere in the world ever issues an order that seeks to compel Microsoft to suspend or cease operations and support for Europe out of our data centres here, we will go to court," Smith said in Brussels.
"We appreciate that it is a real concern of people across Europe," he added.
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