Microsoft Cements AI Dominance as Competitors Scramble to Align

Redmond’s AI empire expands while rivals play catch-up—Wall Street yawns, adjusts spreadsheets.

Once again, Microsoft proves it’s the house in the AI casino where everyone else just rents tables.

Musk, Altman and Huang promise their AI tools on Azure

Musk, who is currently suing Microsoft over its $14 billion investment in OpenAI, joined virtually to announce a deal to put xAI’s Grok models on Microsoft’s Azure Foundry platform. He told Nadella’s customers, “Tell us what you want, and we’ll make it happen.”

His deal means Grok will be available to the same clients already using OpenAI’s models, with no preference given. Microsoft also added Claude Code, made by Anthropic, to GitHub Copilot, continuing its strategy of stacking model options while maintaining platform control.

Jensen Huang, Nvidia’s CEO, also appeared to announce that Microsoft and Nvidia are now “building the largest AI supercomputer in the world.” That system, powered by Nvidia’s top-tier chips, will live inside Microsoft’s data centers.

Sam Altman, CEO of OpenAI, said the Codex model now “integrates very deeply” with GitHub, and that their relationship with Microsoft is central to getting these tools into developers’ hands.

Microsoft is playing every side. It is giving the same treatment to Mistral and Black Forest Labs, two European startups whose models are also being added to Azure’s AI marketplace. Jay Parikh, who was hired last year from Meta to lead Microsoft’s new Core AI division, said, “Openness and choice — that’s what all developers want, and that’s what we’re going to deliver.”

Microsoft sells access, not just models

Microsoft’s control over the enterprise AI stack isn’t just about hosting models — it’s about owning the interfaces customers use every day. The company introduced new coding “agents” this week that work off simple instructions, and a system to let businesses create and manage entire fleets of these AI assistants.

GitHub Copilot, already tied tightly to OpenAI, now supports Claude Code, showing Microsoft doesn’t care which model wins — as long as the work happens on Azure.

That strategy is paying off. Microsoft stock is up more than 8% in 2025, even while most of the other “Magnificent Seven” tech stocks have dropped under pressure from Donald Trump’s economic policies. The company expects its AI suite to pull in at least $13 billion a year, and most of that will come from business users embedding AI into daily tools like Excel, Outlook, and Teams.

Satya, who took over the company in 2014, told attendees the industry is going through “another platform shift.” He described this moment like the early days of the internet, except now it’s models, not websites.

But unlike OpenAI, which still talks about long-term general intelligence, Satya is focused on short-term product delivery. “I don’t think we entirely anticipated this moment two years ago,” said Don Johnson, Docker CEO and former Oracle cloud boss. “Being a platform is in Microsoft’s DNA.”

Microsoft isn’t free of threats. OpenAI is now selling directly to companies and building its own developer ecosystem. CFO Sarah Friar told investors the new Stargate data center — backed by Japan’s SoftBank — ensures OpenAI’s models aren’t dependent on any one partner. She made it clear they want independence and long-term control of their stack.

Still, analysts like Kash Rangan at Goldman Sachs argue Microsoft holds the advantage. Rangan said, “Microsoft’s investment in OpenAI is de minimis.” He added that the Build conference “helped demonstrate the technology’s commercial prospects” and called the event “three pivotal days that made AI happen at scale.”

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