Microsoft

A secret war between Oracle and Microsoft will shape the future of AI

Posted on by Techtime

Photo above: Construction works at Stargate facility, Texas, USA. Credit: OpenAI

The developing competition between Oracle and Microsoft for OpenAI’s huge investments budgets is not accidental and was, in many ways, even expected. However, the scale and outcome of this conflict could reshape the entire ecosystem of Artificial Intelligence in the coming years. Last week, The Wall Street Journal reported that OpenAI had signed an unprecedented $300 billion cloud infrastructure agreement with Oracle, starting in 2027. Following this news, Oracle’s stock on the NYSE surged by about 40% in a single day. While it has since fallen slightly (to $291), the company is now trading at a record high market capitalization of $830 billion.

This agreement comes less than two months after the signing of a collaboration deal to build and operate a 4.5 gigawatts data center in Texas, USA, that will house over 2 million processors. “Oracle began delivering the first Nvidia GB200 racks last month and we recently began running early training and inference workloads, using this capacity to push the limits of OpenAI’s next-generation frontier research.” The project will be executed through a new subsidiary, Stargate Project, with a total investment of about $500 billion over the next four years. The main investors in Stargate Project, alongside OpenAI, are SoftBank, Oracle, and the Emirati investment fund MGX.

Don’t Upset Microsoft

“As part of Stargate, Oracle, NVIDIA, and OpenAI will closely collaborate to build and operate this computing system. This builds on a deep collaboration between OpenAI and NVIDIA going back to 2016 and a newer partnership between OpenAI and Oracle,” OpenAI stated. To appease its largest investor, the company added a note: “OpenAI will continue to increase its consumption of Azure as OpenAI continues its work with Microsoft with this additional compute to train leading models and deliver great products and services.”

Why is this comment so crucial? Because Microsoft and OpenAI have a unique relationship. Since OpenAI’s inception in 2019, Microsoft has been its primary investor. Many analysts in the industry estimate it has invested in OpenAI more than $13 billion to date. Microsoft has also provided significant technological resources to OpenAI, including access to vast computing resources on its Azure cloud for training and hosting models like GPT-3.5 and GPT-4.

In return, it gained the ability to integrate OpenAI’s technology into its products. The Azure OpenAI service allows customers to use OpenAI models through Microsoft’s platform, and Microsoft’s Copilot platform is based on integrating OpenAI technology into Office applications, the Bing search engine, and the Windows operating system. It remains unclear how the two partners will resolve the conflict created by the new alliance with Oracle.

Perhaps to calm investors and customers, they released on September 11, 2025 a joint, brief, and cryptic statement: “OpenAI and Microsoft have signed a non-binding memorandum of understanding (MOU) for the next phase of our partnership. We are actively working to finalize contractual terms in a definitive agreement. Together, we remain focused on delivering the best AI tools for everyone, grounded in our shared commitment to safety.” Is this a peace treaty or a declaration of war? It’s unclear.

The Software Giants Meet in the Cloud

In any case, the financial reports from both Microsoft and Oracle reveal that even if not explicitly stated, the two companies have long been on a collision course. Oracle’s latest quarterly report shows that nearly half of its revenue now comes from its cloud services. In the first quarter of fiscal year 2026, which ended in August 2025, Oracle’s sales totaled $14.9 billion. The main component (48% of sales) was revenue from cloud solutions and services, which grew by 28% compared to the same quarter last year, reaching $7.2 billion. The software sales component dropped to just 38%, compared to 44% last year, totaling $5.7 billion.

The cloud is also becoming the main component of Microsoft’s revenue. In the fourth fiscal quarter ending in June 2025, its sales totaled $76.4 billion. Sales from cloud services grew by 26% compared to the same quarter last year, reaching $29.9 billion, nearly 40% of total sales.

In other words, both software giants are gradually transforming into cloud-based companies. And since artificial intelligence is the largest growth engine for cloud services, they are clashing at a specific moment: when the leading company in AI services is finalizing its strategic plan for the coming years.

Microsoft Acquires CyberX to strengthen Azure’s IIoT

Posted on by Techtime

Photo above: CyberX’ CEO Omer Schneider (left) and the CTO Nir Giller

Microsoft announces it is acquiring CyberX from Herzliya, Israel, to help solve IoT security and IoT security monitoring challenges in Mocrosoft’s cloud service, Azure. CyberX will complement the existing Azure IoT security capabilities, and extends to existing devices including those used in industrial IoT, Operational Technology and infrastructure scenarios.

The announcement came four months after CyberX Announces Integration with Microsoft Azure Security Center for IoT. The combination of CyberX’s agentless security platform and Azure Security Center for IoT provides comprehensive IoT device protection and zero trust security for organizations seeking to reduce risk from enterprise IoT threats as well as from industrial IoT, Smart Buildings, Smart Retail, and more.

CyberX provides industrial cybersecurity platform for continuous, non-invasive risk assessment and M2M anomaly detection inside ICS and SCADA systems. The company was founded in 2013 by Omer Schneider and Nir Giller, both veterans of an elite IDF cybersecurity unit charged with securing Israel’s national critical infrastructure. CyberX has successfully deployed its continuous ICS threat monitoring and risk mitigation platform in Global 2000 enterprises across critical infrastructures, including energy & utilities, pharmaceuticals, chemicals, oil & gas, and manufacturing.

In a message to employees in the company’s blog, Omer Schneider and Nir Giller wrote that the move enables a unified IT/OT security. “We’ll be part of the business unit managed by Yuval Eldar, Microsoft GM of IoT Security, and in worldwide sales, we’ll be working with the Cybersecurity Solutions Group (CSG).” CyberX’ platform, XSense, acts as an invisible layer that covers the operational technology network, modeling it as a state machine.

Once plugged in, XSense commences the Collection stage: It performs Deep Packet Inspection and extracts the devices of the network, and the different patterns that are used and operational processes. Than it begins the analysis stage: XSense constructs the network’s State Machine during learning mode and once in operational mode, it knows whenever the Network is in each particular state.

Once a new state is introduced, a classification process takes place. Based on multiple signals that are fed into the XSense algorithm, during the Collection and Analysis stages, XSense determines whether the new state is malicious or operational. Than the a definition of a new state as malicious or operational generates an alert that is delivered in real-time to the network operator.

Intel and Microsoft Promote Security Standard for AI

Posted on by Techtime

Last week, Intel and Microsoft brought together nearly 100 security and Artificial Intelligence (AI) experts to discuss new standards for Homomorphic Encryption (HE), which is emerging as a leading method to protect privacy in machine learning and cloud computing. The HE standards workshop took place on Intel’s Santa Clara, California campus. Following the first meeting in October, 2018, Intel and Microsoft initiated the founding of the HomomorphicEncryption.org group.

As more data is collected and used to power AI systems, concerns about privacy are on the rise. Casimir Wierzynski from the office of the CTO of AI Products Group at Intel, said that Intel is collaborating with Microsoft Research and Duality Technologies on standardizing HE, “to unlock the power of AI while still protecting data privacy.”

Fully homomorphic encryption, or simply homomorphic encryption, refers to a class of encryption methods envisioned by Rivest, Adleman, and Dertouzos already in 1978, and first constructed by Craig Gentry in 2009. Homomorphic encryption differs from typical encryption methods in that it allows computation to be performed directly on encrypted data without requiring access to a secret key. The result of such a computation remains in encrypted form, and can at a later point be revealed by the owner of the secret key.

It allows AI computation on encrypted data, thus enabling data scientists and researchers to gain valuable insights without decrypting or exposing the underlying data or models. This is particularly useful in instances where data may be sensitive – such as with medical or financial data.  Homomorphic encryption also enables training models directly on encrypted data, without exposing its content. Such encryption would enable researchers to operate on data in a secure and private way, while still delivering insightful results.