Microsoft kicked off its annual software developer conference in Seattle on Monday, attracting thousands of developers eager to transform years of investment in artificial intelligence into viable products and services for businesses and consumers alike.
The tech giant, based in Redmond, Washington, is a major investor and key strategic partner of OpenAI, the creators of ChatGPT. This year alone, Microsoft has allocated $64 billion (approximately Rs. 5,46,718 crore) for various initiatives, primarily focusing on the data centers essential for AI services like Copilot, integrated into its widely used Microsoft 365 suite.
However, indications suggest that Microsoft is reassessing its collaboration with OpenAI and positioning itself as a neutral participant in the competitive AI landscape.
Earlier this year, Microsoft permitted OpenAI to partner with Oracle for a significant data center initiative known as the “Stargate” project, located in Texas.
CEO Satya Nadella has emphasized the company’s capabilities to reduce costs through optimization, asserting that once a particular algorithm is finalized, Microsoft can achieve tenfold improvements in performance at the same computational expense.
The demand for AI services within Microsoft’s Azure cloud platform continues to increase.
Thomas Blakey, an equity analyst at Cantor Fitzgerald, noted that Microsoft is increasingly retaining revenue-generating AI services within its own data centers, allowing for ongoing enhancements aimed at cost-efficiency.
The company intends to rely on external data center solutions, like CoreWeave—recognized for its focus on providing AI chips from Nvidia—only when specific projects require additional computing power for short periods.
“They’ve consistently mentioned that they plan to move away from investing in further data centers and instead, will depend on ‘neoclouds’ when there is a need for temporary scalability,” Blakey explained to Reuters.
© Thomson Reuters 2025
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