[sudioStudio64]

That's actually how it works. You give it permission to use your O365 account. You give it permission to use your location either at setup or in the config settings at a later date.

A whole host of the Cortana functionality is local that interacts with online services via API's that you authorize.

I don't think that really anything that I say is going to change your mind, but you could check out some of the video's on Channel9 where they go into it in detail. Some of it's pretty good and if you use headphones you can't hear your co-workers talk about stuff that makes you want to slap someone.

[JoshTriplett]

The claim that started this thread was that Cortana needed this data to be supplied to Microsoft, as controlled by the privacy settings mentioned in the linked article. If Cortana or similar services don't actually need this data, great; then they shouldn't ask for it or need to have privacy settings that allow it to be sent to Microsoft.