Microsoft Balances Internal Chip Ambitions with a $1 Billion EY Alliance as AI Investments Bite

Microsoft pursues dual AI strategy: in-house Maia 200 silicon with Anthropic talks, plus a billion-dollar EY pact to scale enterprise AI from pilot to production.

Microsoft is pursuing a two-front strategy to scale its artificial intelligence business: building its own silicon while simultaneously securing a massive consulting partnership. The software giant has entered early discussions with AI startup Anthropic about deploying its in-house Maia 200 processor, according to reports. On the same day, the company unveiled a multiyear, billion-dollar collaboration with professional services firm EY to help enterprises move AI projects from pilot to production.

The Anthropic talks remain at an exploratory stage, but a deal would carry significant strategic weight. Anthropic has deep ties to both Google and Amazon, receiving financial backing and infrastructure support from those cloud rivals. If the startup were to also adopt Microsoft’s homegrown chips, it would provide a powerful public endorsement of Redmond’s hardware ambitions — and a step toward reducing dependence on Nvidia and other third-party GPU suppliers.

That independence matters because third-party GPUs are a major cost driver in AI. Developing proprietary chips protects margins over the long term, especially in a business that currently consumes enormous amounts of capital.

A Growth Engine Under Heavy Investment Pressure

Microsoft’s AI business is already generating a $37 billion annualized revenue run rate, up 123% year-over-year. Azure posted 40% growth, and the Intelligent Cloud segment — a key measure of Microsoft’s cloud performance — delivered quarterly revenue of $35 billion. Overall company revenue rose 18% in the third fiscal quarter to $82.9 billion.

But the cost of that expansion is steep. Capital expenditures hit roughly $31 billion in the latest quarter, nearly double the year-ago figure. Losses from the company’s OpenAI investment widened to $3.1 billion. The investment community has taken notice: Microsoft shares are down about 11% year-to-date and trade nearly 9% below their 200-day moving average. At around €359 — equivalent to roughly $375 — the stock sits some 23% below its 52-week high set last summer. Still, the recent bounce is notable: the share price has recovered about 16% from its March low and now sits comfortably above its 50-day average.

The forward price-to-earnings multiple of roughly 25 reflects cautious rather than euphoric expectations. The central question for the coming quarters is whether the heavy infrastructure spending will finally translate into measurable operating leverage. The fiscal year ends in July, when Microsoft will report full-year results.

From Pilots to Production: The EY Pact

The EY partnership addresses exactly that scaling challenge. Over five years, the two organizations will jointly invest more than $1 billion — with Microsoft contributing engineering resources and EY contributing industry expertise — through an approach called "AI-native Hypervelocity Engineering." The idea is to move companies beyond isolated experiments and toward measurable, enterprise-wide outcomes.

The timing is no coincidence. Microsoft has just reported strong quarterly numbers, and its cloud infrastructure is expanding at a pace few rivals can match. The EY deal signals confidence that corporate customers are ready to stop testing AI and start deploying it at scale.

Security, Climate, and New Hardware

Beyond the two big strategic pushes, Microsoft made a series of additional announcements. On the security front, the company’s research team took down "Fox Tempest," a cybercriminal platform that had been operating as a malware-signing service since 2025. At the same time, Microsoft’s AI safety team released two internal tools as open source: "Rampart," a framework for protecting AI agents from attacks like prompt injection, and "Clarity," a review tool for AI agent designs. Patches were also issued for two actively exploited vulnerabilities in Microsoft Defender.

In sustainability, Microsoft signed a seven-year agreement with Danish provider BioCirc to secure up to 650,000 tonnes of CO? removal.

On the hardware side, the company introduced the Surface Pro 12 and Surface Laptop 8, both powered by Intel Core Ultra Series 3 processors and designed to run local AI workloads more efficiently. A new "Agentic Browsing" feature in Edge for Business is being tested, which can autonomously complete complex tasks rather than simply retrieving information.

A Dividend Note

Thursday also marked the ex-dividend date for Microsoft’s quarterly payout of $0.91 per share, with payment scheduled for June. That small but steady return for shareholders comes even as the company pours tens of billions into infrastructure — a balancing act that will define Microsoft’s next chapter.