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Microsoft's AI demand under scrutiny as investors seek payday

Economic Times

Economic Times · 8m ago

Microsoft's AI demand under scrutiny as investors seek payday

Microsoft is projected to report its slowest quarterly revenue growth in a year as investors seek signs of artificial intelligence (AI) demand and worry about the return on investment in the technology. Although seen as a frontrunner in generative AI, Microsoft's key products, including its enterprise assistant Copilot, have experienced slow adoption. Concerns over capital expenditures, margin compression, lack of evidence on AI returns, and financial resegmentation have added to apprehension around Microsoft's earnings. Microsoft's stock performance has also underperformed the S&P 500. Azure cloud computing is expected to have grown by 33%, while overall revenue is expected to increase by 14.1%.

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Microsoft’s OpenAI ties face potential EU merger investigation

Livemint

Livemint · 1y ago

Microsoft’s OpenAI ties face potential EU merger investigation

Microsoft's $13 billion investment in OpenAI is under scrutiny from the European Union (EU) for a potential merger investigation. The deep ties between the two companies were exposed during a recent leadership change at OpenAI. Microsoft's integration of OpenAI's products has solidified its position as a leading AI company, surpassing rivals like Google. The EU is calling for feedback on competition issues related to generative AI and virtual worlds, as the market for these technologies continues to grow rapidly.

Microsoft shares slide 5% as cloud forecast, AI spending disappoint

Economic Times

Economic Times · 5m ago

Microsoft shares slide 5% as cloud forecast, AI spending disappoint

Microsoft's cloud computing business forecast fell short of expectations, causing its shares to drop by 4.5%. Despite beating quarterly sales estimates, concerns linger over high spending in AI and competition from cheaper Chinese models. Azure's growth projections are below expectations, with revenue growth missing estimates. Microsoft's capital expenditures exceeded expectations, and the rise of Chinese AI models like DeepSeek has heightened price war fears. Investors seek assurance on the monetization of significant AI investments.

Private credit secondary sales set to rise as market turmoil spurs hunt for cash

VCCircle

VCCircle · 3m ago

Private credit secondary sales set to rise as market turmoil spurs hunt for cash

Investors are increasingly considering secondary sales of private credit holdings amid market volatility triggered by trade wars under U.S. President Donald Trump. This $1.5-trillion industry, including companies like Apollo Global Management, may see more secondary sales as investors seek liquidity due to falling public market values and a need for cash. With rising demand, managers like Pantheon raised significant funds for buying private credit stakes, viewing current conditions as an opportunity for strategic purchases.

AI deals between Microsoft and OpenAI, Google and Samsung, in EU crosshairs

Economic Times

Economic Times · 1y ago

AI deals between Microsoft and OpenAI, Google and Samsung, in EU crosshairs

The European Union (EU) may launch an antitrust investigation into Microsoft's collaboration with OpenAI due to concerns over exclusivity clauses, while Google's AI deal with Samsung is also under scrutiny. EU regulators are seeking additional perspectives to understand the potential negative impact on competitors. This highlights worldwide unease about tech giants leveraging their dominance in the AI sector. EU competition chief, Margrethe Vestager, has sent information requests to major tech companies regarding their AI partnerships. Microsoft's partnership with OpenAI will not be subject to EU merger rules, but concerns persist regarding Big Tech blocking smaller AI developers. Google's arrangement with Samsung is also being examined, as are acqui-hires, where one company acquires another primarily for talent.

Microsoft made a $16 million investment in Mistral AI

TechCrunch · 1y ago

Microsoft made a $16 million investment in Mistral AI

Paris-based AI startup, Mistral AI, has announced the development of a large language model to compete with OpenAI's GPT-4. Alongside this announcement, the company also revealed a distribution partnership with Microsoft, who is investing €15 million ($16.3 million) in Mistral AI. The investment will convert into equity in Mistral's next funding round and Microsoft's stake in the startup will depend on the valuation of that round. Mistral AI's unveiling of Mistral Large, its flagship language model, is not open source and can be accessed via Mistral's API platform. Microsoft's investment is now under scrutiny by the European Commission.

US investigating Meta for role in drug sales: report

Economic Times

Economic Times · 1y ago

US investigating Meta for role in drug sales: report

U.S. federal authorities are investigating the potential involvement of Meta Platforms in the illegal drug trade, according to the Wall Street Journal. The investigation focuses on the sale of drugs facilitated through the platform. Meta Platforms, previously known as Facebook, is under scrutiny as authorities seek to uncover any potential connections to the illegal drug market.

Microsoft results disappoint investors wanting more from AI

Economic Times

Economic Times · 5m ago

Microsoft results disappoint investors wanting more from AI

Microsoft's Azure cloud business growth disappointed investors despite beating revenue estimates due to high AI expenses and competition from low-cost Chinese AI technologies. The stock dropped by 2% as Microsoft struggles to demonstrate returns on substantial AI investments. Azure's revenue growth fell short of expectations, exacerbated by a rising Chinese AI model, DeepSeek. Microsoft's shares gained 8% over the year but lagged behind rivals like Alphabet and Amazon. Despite this, Microsoft's AI capabilities continue to lure investors.

Inside Microsoft’s complicated relationship with OpenAI

The Verge

The Verge · 27d ago

Inside Microsoft’s complicated relationship with OpenAI

Cracks are appearing in the Microsoft-OpenAI partnership, a result of OpenAI's growing need for more compute power and desire to reduce dependence on Microsoft. Tensions have heightened around OpenAI's potential acquisition of AI coding tool Windsurf, which it wants exempt from Microsoft's contract. This discord might lead OpenAI to accuse Microsoft of anticompetitive behavior, prompting further regulatory scrutiny, as Microsoft's $13 billion AI investment and partnership terms with OpenAI face potential antitrust violations investigation.

Banks' infra bond funding to turn expensive as investors demand higher returns

VCCircle

VCCircle · 4m ago

Banks' infra bond funding to turn expensive as investors demand higher returns

Indian banks face increased costs in raising funds through infrastructure bonds as investors seek higher returns amid a surge in debt supply. Domestic lenders have raised a record 892 billion rupees this fiscal year but face challenges as demand from long-term investors weakens, widening spreads between corporate and government bonds. Despite rising secondary market yields, institutional investors demand higher yields, affecting state-run banks and companies as they strive to meet fundraising targets.

Microsoft partners with OpenAI-rival Mistral for AI models, drawing EU scrutiny

Arstechnica

Arstechnica · 1y ago

Microsoft partners with OpenAI-rival Mistral for AI models, drawing EU scrutiny

Microsoft's recent investment in French AI company Mistral, and plans to offer its AI models through Azure, have come under scrutiny from European Union regulators. Concerns have been raised regarding potential influences on AI regulations, lobbying efforts, and calls for a fair and competitive digital market. The controversy has highlighted the tension between Big Tech companies, the role of European champions in the tech industry, and the need for increased regulatory oversight in the rapidly evolving AI landscape. Additionally, Mistral announced the release of its new large language model, Mistral Large.

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