On Tuesday, tech giant Microsoft (MSFT) announced new partnerships with chipmaker Nvidia (NVDA) and AI startup Anthropic (PC:ANTPQ). This move shows that Microsoft is making an effort to rely less on AI firm OpenAI (PC:OPAIQ). As part of the deal, Microsoft will invest $5 billion into Anthropic, while Nvidia will invest $10 billion. In return, Anthropic has agreed to spend $30 billion on Microsoft’s Azure cloud services and may use up to one gigawatt of additional computing power in the future.
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Interestingly, this is the first time that Nvidia and Anthropic are teaming up. More specifically, they will work to improve Anthropic’s AI models by optimizing their performance on Nvidia’s hardware. This includes using Nvidia’s latest Vera Rubin and Grace Blackwell chips. Unsurprisingly, Nvidia CEO Jensen Huang said that he’s excited about the collaboration and even called it a dream come true after praising Anthropic’s work on its Claude language models.
While Microsoft already has a big investment in OpenAI, which is worth around $135 billion due to its 27% ownership, it’s now expanding its reach. It is also worth noting that Anthropic was actually started in 2021 by ex-OpenAI researchers, including CEO Dario Amodei. Nevertheless, Microsoft CEO Satya Nadella said that the goal isn’t to have one winner in AI, but to build long-lasting tools that work for everyone. Nvidia, meanwhile, is expected to report earnings on Wednesday, and it is likely that this new deal could come up during the call.
Is MSFT Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 35 Buys assigned in the last three months. Furthermore, the average MSFT price target of $632.07 per share implies 29.4% upside potential.
