Microsoft Ditches External AI Alliances, Restructures Security, and Faces a Divided Wall Street Before Earnings
Published on 07/17/2026 at 18:22 | Redaktion boerse-global.de
Microsoft has instructed its sales force to actively steer customers away from the models of its longtime partners OpenAI and Anthropic, pushing instead the company’s own MAI line of artificial intelligence tools. The internal directive, confirmed in a report from July 17, 2026, marks a dramatic break in alliances that had already shown signs of strain. Microsoft holds roughly 27 percent of OpenAI’s for-profit arm — a stake valued at around $135 billion — and has invested $5 billion in Anthropic, which in turn committed to $30 billion in Azure bookings. Yet CEO Satya Nadella has publicly criticized Anthropic’s Fable model for its restrictions, calling for more open and cheaper AI offerings. Seven in-house models have now been released, including MAI-Thinking-1, which the company says matches Claude Opus 4.6 on performance. The Copilot assistant, meanwhile, has attracted more than 20 million paying users, but the strategic pivot suggests Microsoft no longer sees external partners as central to its AI future.
That pivot is not sitting well with equity markets. Microsoft shares closed Friday at €340.80, a 2.74 percent slide according to one report, while another put the close at €343.25, a 2.04 percent decline from Thursday’s €350.40. Either way, the stock has shed roughly 28.7 percent from its 52?week high of €478.10 set in late October 2025. It now trails its 200?day moving average by as much as 9.5 percent, a sign that the downward pressure is more than a short?term tremor. The Relative Strength Index sits at 52.0 — neither oversold nor overbought — and the 30?day annualized volatility of 32.74 percent points to the potential for a sharp move in either direction.
The corporate shake?up extends well beyond AI partnerships. Hayete Gallot, who took over the cybersecurity division in February 2026 and reports directly to Nadella, has replaced several leaders who previously reported to Charlie Bell. Longtime executives Joy Chik and Shawn Bice are leaving, while Microsoft veteran Naseem Tuffaha and former NetApp and HPE executive Rajesh Sundaram have been brought in. In an internal memo, Gallot described the industry as being fundamentally reshaped by artificial intelligence. The restructuring is part of a company?wide reduction of 4,800 positions, or 2.1 percent of the workforce, with hundreds of cuts falling inside the security unit alone. Resources are being redirected to AI?powered products like Security Copilot, automated vulnerability scanners, and agent monitoring tools. The overhaul follows heightened scrutiny after incidents that drew criticism from the US Department of Homeland Security.
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External security concerns are also mounting. JPMorgan Chase CEO Jamie Dimon has publicly warned about the risks posed by Anthropic’s Mythos model, comparing its uncontrolled distribution to handling ballistic missiles. The US government imposed access restrictions on Mythos in June 2026 and lifted them on July 1 after additional safeguards were implemented. The episode underscores the regulatory and reputational minefield that Microsoft’s AI ambitions must navigate.
Wall Street is sharply divided on where Microsoft goes from here. Morgan Stanley analyst Josh Baer reaffirmed a buy rating and a $650 price target, citing a “clear” lead in generative AI. His conviction is backed by a proprietary CIO survey showing that, despite only moderate growth in overall IT budgets in 2026, Microsoft is expected to capture the largest share of new software spending and an increasing slice of enterprise AI budgets. Mizuho Securities also maintained a buy recommendation this week, with a $490 target. But Citigroup lowered its price target, expressing caution about how quickly the heavy AI investment will translate into revenue. The gap between the most bullish and the most cautious targets — $650 versus Citigroup’s trimmed figure — reflects a market struggling to gauge the monetization timeline.
That debate will be put to the test on July 29, when Microsoft reports results for the fourth quarter of fiscal 2026. In the prior quarter, Azure cloud revenue grew 40 percent, the AI business was running at an annualized revenue rate of $37 billion, and the company’s total backlog stood at roughly $627 billion. Against that backdrop, the sell?side optimism on Copilot has some foundation: enterprise licenses for the AI assistant reached 20 million by the end of the third quarter, a 250 percent increase year?over?year. Analysts argue that Microsoft can monetize AI more effectively than standalone players like OpenAI or Anthropic because it can layer Copilot into an enormous existing customer base.
Legal headwinds add another layer of uncertainty. A class?action lawsuit alleging misleading statements about Azure and Copilot is underway, with the August 11, 2026 deadline for investors to step forward as lead plaintiffs fast approaching. The coming earnings report will be the first major opportunity for management to demonstrate that the dual bet — abandoning external model partners while restructuring the security apparatus and continuing to spend heavily on AI — is resonating with customers and investors alike.
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