C3.ai (AI, Financial) came out swinging Tuesday morning, with its stock shooting up over 24% after announcing an “expanded strategic alliance” with Microsoft (MSFT, Financial). The deal has all the buzzwords investors love—technical integration, joint sales and marketing, and a focus on accelerating AI-driven business transformation. Microsoft will now be the go-to cloud provider for C3.ai’s offerings, while C3.ai gets a spot as a preferred AI partner on Azure. Sounds like a win-win, right? Not so fast.
Here’s the catch: this “new” deal isn’t exactly new. Microsoft and C3.ai have been teaming up since 2018, delivering solutions to big names like Shell and Nucor. And while the press release promises enhanced capabilities and shiny innovations, it doesn’t offer a single number to back up the hype—no revenue forecasts, no profit projections, nada. Meanwhile, C3.ai is still bleeding cash, with $280 million in losses last year and no profitability in sight. The power dynamics here also raise eyebrows. Microsoft, with nearly $3.1 trillion market cap, is clearly the dominant player. C3.ai? A niche contributor with a market cap of just $3.3 billion.
The market’s reaction feels more like overexuberance than rational optimism. Sure, the partnership is a credibility boost for C3.ai in a competitive AI market, but let’s not forget that flashy alliances don’t always translate to dollar signs. For now, this looks like a long-term story with a lot of “ifs” and “maybes.” Investors should think twice before piling in based on hype alone.
