Microsoft Eyes Potential Boost from Moonshot Deal as Azure Growth Soars
Microsoft's MSFT stock has been on an unusual trajectory in 2026. Despite a sharp increase from its June low, it remains only 4% up year-to-date (YTD). The latest Moonshot development is worth monitoring as the Chinese AI startup enters early talks with Microsoft, Amazon.com (AMZN), and Alphabet's Google regarding revenue-sharing deals for its Kimi K3 model.
Moonshot seeks to secure as much as 30% of revenue generated by K3-related services hosted on cloud platforms. For Microsoft, this opportunity is more about driving massive computing demand through Azure usage rather than one AI model.
A major model can drive significant computing demand, leading to increased cloud consumption, customers, and potential additional recurring revenue for Microsoft. However, Moonshot faces scrutiny over alleged intellectual property and chip-acquisition issues, making it far from a done deal.