The New Microsoft AI Deal Highlights Strengthening AI Supply Chain Connections

Microsoft’s partnership with AI leaders like Nvidia and Anthropic has again made the buzz around the market, with an opportunity to redefine how IT makes AI choices.

After the announcement from Microsoft, Anthropic, and Nvidia about their latest collaboration on Tuesday, the market analysts said that instead of giving the flexibility to IT buyers, the deal will further complicate their choices.

“This partnership will make [Anthropic’s] Claude the only frontier model available on all three of the world’s most prominent cloud services. Azure customers will gain expanded choice in models and access to Claude-specific capabilities,” the statement from Microsoft said.

“Anthropic is scaling its rapidly growing Claude AI model on Microsoft Azure, powered by Nvidia, which will broaden access to Claude and provide Azure enterprise customers with expanded model choice and new capabilities. Anthropic has committed to purchase $30 billion of Azure compute capacity and to contract additional compute capacity up to one gigawatt.” “Nvidia and Microsoft are committing to invest up to $10 billion and up to $5 billion, respectively, in Anthropic”, it further said.

Satya Nadella, CEO of Microsoft, also said in an accompanying video, ”For us, this is all about deepening our commitment to bringing the best infrastructure, model choice, and applications to our customers. And of course, this all builds on the partnership we have with OpenAI, which remains a critical partner for Microsoft, and provides more innovation and choice.”

However, analysts across the market are still questioning whether the new partnership will deliver more choices for the IT industry or will eliminate the existing ones. According to some analysts, this partnership, along with other similar efforts involving Oracle and Softbank, will be reshaping the AI choices for IT leaders.

Sanchit Vir Gogia, chief analyst at Greyhound Research, shared, “A lot of CIOs are starting to question whether their current AI infrastructure choices will hold up in the long run. It’s not just about picking a cloud provider anymore. The lines between cloud, models, and hardware are blurring fast. This deal also reveals how tightly linked the AI supply chain has become, with cloud capacity, model availability, and silicon strategy now moving in lockstep rather than as separate decisions.”

Gogia also highlighted the potential purchase decision strategy that might be driving more significant changes. “Here’s the part that matters to CIOs: when you pick a model now, you’re not just picking a model. You’re picking a hardware path, a cloud footprint, and a cost profile that will shape how your AI projects scale or don’t. Microsoft’s move to integrate Claude into Foundry and Copilot isn’t just about more choice. It signals a shift in posture. What used to be a one-model strategy is now moving toward a portfolio play. That gives buyers more options, but it also introduces more complexity. There is also a deeper pattern emerging. The flow of capital, compute, and model access between these companies is becoming circular in nature. Infrastructure vendors are funding the very AI labs that become their largest customers, which can blur the real economics for enterprises planning long-term budgets. You’ll need stronger governance to keep those options manageable.”

Another analyst highlights the growing needs of Anthropic through the partnership. Patrick Moorhead, CEO of Moor Insights & Strategy, said, “Anthropic, like OpenAI, needs to hedge its bets across multiple XPU and GPU vendors. This is smart, as they can compare TCO across all the vendors over time and keep vendors hungry.”

Forrester Senior Analyst Alvin Nguyen also agreed by saying, “Anthropic has partnerships with AWS and Google as well, I see this as a hedge to ensure they are not locked in to any single vendor. This also acts as a hedge for Microsoft and Nvidia to ensure they are not locked in too closely with OpenAI.”

“No single vendor is able to satisfy the entirety of the demand for AI. Anthropic is at a size where their growth will be limited by staying with too few vendors. This brings concerns, given that virtually all major AI vendors are invested in each other. The ultimate take for enterprises is to not bet on any single one,” he further added.

According to Gogia, the focus of this deal should be on Anthropic. “What this really shows is Anthropic continuing a very deliberate multi-chip strategy. They are using Nvidia, TPU v5, and AWS Trainium for different strengths, rather than trying to push everything through one platform,” Gogia said. “Nvidia gives Anthropic stronger inference performance, wider enterprise reach, and access to an ecosystem that already powers most production AI deployments. The partnership also includes joint engineering on future Claude models for upcoming Nvidia architectures. That kind of co-design creates long-term benefits for both sides, but it does not replace Anthropic’s reliance on TPUs or Trainium.”

Gogia also shared that he doesn’t think Anthropic has chosen a winner in the AI battle. “It is Anthropic, making sure it never becomes dependent on a single hardware source. GPU supply volatility, rising inference costs, and the scale of future models are all pushing the company toward a diversified compute strategy. If anything, this move signals to enterprises that the smartest AI builders are hedging across all major chip platforms, and that long-term resilience will require the same mindset,” he said.

“Anthropic isn’t cutting ties with other platforms. They’re still working with Google’s TPUs and Amazon’s Trainium chips. That’s a smart hedge. It also tells us something important: no single cloud or hardware vendor owns the future of AI infrastructure. We’ve also seen a jump in CIO involvement in AI hardware decisions. Nearly half of enterprise tech leaders are now weighing in directly on chip selection, which would’ve been unthinkable just two years ago. AI infrastructure is no longer a back-end topic. It’s a boardroom one,” he further added.

Phil Smith, the systems engineer for AI architecture for Substratos, said that the limitations and capabilities of emerging technologies are one of the most powerful driving forces behind the new alliance. “Frontier models saturate HBM [high bandwidth memory] bandwidth long before they saturate raw FLOPs. Nvidia and TPU memory topologies hit different limits, which makes diversification essential, and make no mistake: this does appear to be diversification. There is no mention of exclusivity,” he said.

He also commented on whether this partnership is directly about choosing a winner, with some of the elements suggesting yes, while others suggesting no.

On the “Yes, it was about choosing a winner” side, he said, “by aligning so deeply with Nvidia’s architecture on the hardware side, Anthropic is signaling that it believes Nvidia’s platform will be a key winner for large-scale AI training and inference. The cooperation to optimize Anthropic’s workloads for Nvidia’s future chips suggests a bet: that Nvidia’s next-gen hardware will form the base of a major model deployment pipeline.”

Similarly, he also made a statement by referring to the opposite point. “The AI hardware landscape remains highly competitive and multi-node. Many players, including cloud providers, chip vendors, and custom ASICs, are in play. Aligning with one major vendor doesn’t exclude future diversification. Even here, Anthropic may not be publicly committing to only Nvidia, at least not in this announcement, though it’s heavily biased. Microsoft and Anthropic still need to remain competitive with other ecosystems, including Google, AWS, and custom chips, so a single-vendor alignment is risky if that vendor stalls or gets constrained by supply chain, regulation or export control,” he commented.

“In effect, this is both a bet and a hedge. [Anthropic] is placing a big bet on Nvidia and Microsoft’s stack, but likely still preserving some optionality,” he also added. “So yes: it is a strong signal that Nvidia is being bet on, but I’d avoid saying it is locked in. The war is not over yet.”