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The Street
The Street
Ian Krietzberg

Tech News Now: Microsoft's new deal, Zoom's stock surge, and more

Good morning, and welcome to Tech News Now, TheStreet's daily tech rundown. 

In today's edition, we're covering Microsoft's new deal with Mistral, Google Cloud urging antitrust regulators to take a look at Microsoft's cloud business and Zoom's earnings report and subsequent stock spike. 

Tickers we're watching today:  (MSFT) (ZM) and  (GOOG) .

DON'T MISS: Yesterday, the Supreme Court heard oral arguments regarding 2021 laws from Texas and Florida that sought to restrict the ability of social media companies to engage in content moderation. 

Related: Big Tech clashes with Texas, Florida at Supreme Court

Mistral, the new OpenAI

In a move that feels similar to Microsoft's work with ChatGPT-maker OpenAI, Microsoft on Monday announced a new, multi-year partnership with French startup Mistral AI. 

As part of the deal, Microsoft will provide Mistral with infrastructure to support its models, and Mistral's larger models will be made available through Microsoft Azure. 

The deal comes with a 15 million euro investment into the startup, which a Microsoft spokesperson told Reuters would convert into equity in the company's next funding round. 

On the same day as the announcement, Mistral unveiled its new flagship model, Mistral Large, which is meant to compete with OpenAI's GPT-4. The model, unlike Mistral's previous work, will not be open source. It will be available through Azure. 

The move comes several weeks after Mistral lobbied to water down the European Union's AI Act

Mistral CEO Arthur Mensch, saying that too much restriction would limit innovation among smaller companies, said in November: "We simply want rules that do not give an unfair advantage to incumbents (that all happen to be non-European)."

The European Commission, which is already looking into Microsoft's $13 billion partnership with OpenAI, told Reuters it would analyze the company's deal with Mistral. 

"What is emerging shows even more that it was good not to water down our ambition on the safety of GPAI (general purpose AI) models with systemic risks, following legitimate but strong lobbying from companies like Mistral," Brando Benefei, a member of the European Parliament who oversaw the drafting of the AI Act, said. 

"This story that is emerging will need to be further investigated."

Related: How Uniphore is expanding control and reducing hallucinations within its AI models

Google Cloud exec calls Microsoft a monopoly

As Microsoft continues to build out its cloud business — and with a valuation in excess of $3 trillion — Google Cloud Vice President Amit Zavery told Reuters that Google is worried about "Microsoft wanting to flex their decade-long practices where they had a lot of monopoly on the on-premise software before and now they are trying to push that into the cloud now." 

"So they are creating this whole walled garden, which is completely controlled and owned by Microsoft, and customers who want to do any of this stuff, you have to go to Microsoft only," he said.

Zavery said that antitrust regulators ought to provide both guidance and regulations that "prevent the way Microsoft is building the Azure cloud business, not allow your on-premise monopoly to bring it into the cloud monopoly."  

A Microsoft spokesperson dismissed the argument, saying that competition between the hyperscalers remains healthy. 

Related: Grammys CEO Says AI Must Be a Tool For Artists; It Can't Replace Them

Zoom shares jump 7%

Shares of Zoom jumped around 7% Tuesday after the company reported a narrow beat in its fourth-quarter earnings results. 

Zoom reported earnings of $1.22 per share on revenue of $1.15 billion for the quarter, above expectations of $1.15 per share and $1.13 billion respectively. 

The company's revenue represents a 3% year-over-year growth. 

Zoom guided revenue of $1.125 billion for the current quarter and $4.6 billion for the year. 

Still, neither the stock surge nor the revenue growth are in line with the numbers Zoom saw at the height of the pandemic; shares of Zoom hit $559 in 2020. The stock is currently trading below $70. 

In reporting fourth-quarter results in 2020, Zoom reported 369% year-over-year growth. 

Related: Zoom walks back controversial privacy policy

The AI Corner: EU's AI Act

This feels like a good time to revisit the EU's AI regulatory efforts, which have been in process for months. 

The EU's AI Act was approved on Feb. 13 — after last-minute opposition from France, Germany and Italy finally eased up — encompassing a number of restrictions and regulations. Negotiations for the act had been ongoing for months before the committees landed at a satisfactory place. 

The agreement bans AI applications that threaten the rights of civilians, including emotion recognition at work and in schools and AI designed to manipulate or exploit people. 

Transparency requirements, specifically pertaining to high-risk models, were additionally baked into the framework. 

Despite its early approval, the act still needs to be formally adopted, something that will happen during an upcoming Parliament session. The different restrictions laid out by the regulation will begin to take effect in the months following the formal adoption of the law. 

Contact Ian with AI stories via email, ian.krietzberg@thearenagroup.net, or Signal 732-804-1223.

Related: Senate Judiciary Committee seeks to build new framework to rein in Big Tech

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