German software giant SAP plunged as much as 11% Thursday after reporting weaker-than-expected growth in its cloud contract backlog in the fourth quarter.

It’s the biggest daily fall since October 2020, when its stock dropped 22% following disappointing third-quarter results. The stock is also on track to close at its lowest price since mid-2024.

Shares were last trading down 9.7%.

SAP’s current cloud backlog rose by 16% in the fourth quarter to 21.1 billion euros [$25.3 billion]. UBS analysts noted Thursday that the cloud backlog growth will be a “disappointment” based on previous expectations of 26% growth.

“Large transformational deals with high cloud revenue ramps in outer years and termination for convenience clauses required by law negatively impacted fourth quarter constant currency current cloud backlog growth by approximately 1 percentage point,” SAP said in its earnings statement.

Chief Executive Officer Christian Klein said the current cloud backlog in the last quarter of the year had laid a “strong foundation” to accelerate revenue growth through 2027.

The German company did however, guide for cloud backlog growth to “slightly decelerate” in 2026.

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Demonstrators hold a banner reading “Liberated Zone” during a protest at the Microsoft campus in Redmond, Washington, on Aug. 19, 2025. Microsoft Corp. employees rallied at the company’s Redmond, Washington, headquarters in an effort to ratchet up pressure on the software maker to stop doing business with Israel over its war in Gaza.

David Ryder | Bloomberg | Getty Images

A Microsoft engineer is resigning after 13 years at the software giant, claiming the company continues to sell cloud services to the Israeli military and that executives won’t discuss the war in Gaza.

Scott Sutfin-Glowski, a principal software engineer, informed colleagues at Microsoft on Thursday that this will be his last week at the company.

“I can no longer accept enabling what may be the worst atrocities of our time,” he wrote.

In the letter, he referred to a February Associated Press article that said the Israeli military had at least 635 Microsoft subscriptions, and he claimed the vast majority of them remain active.

Microsoft declined to comment.

Sutfin-Glowski’s announced departure comes a day after President Donald Trump said Israel and Hamas committed to the first phase of a peace plan two years into the latest conflict. The AP reported on Thursday, citing government officials, that the U.S. is sending roughly 200 troops to Israel to help support the ceasefire deal.

The conflict has been a matter of ongoing tension at Microsoft.

For months, employees have protested the company’s cloud business from the Israeli military. Five employees were fired.

In September, Microsoft said it had stopped providing certain services to a division of the Israeli Ministry of Defense, though it didn’t provide specifics. That decision came after Microsoft investigated an August report from The Guardian saying the Israeli Defense Forces’ Unit 8200 had built a system for tracking Palestinians’ phone calls.

Sutfin-Glowski said the company cut off communication systems that allowed employees to bring up their concerns regarding the Israeli military’s use of Microsoft products.

Outside a building at Microsoft headquarters in Redmond, Washington, on Thursday, employees and community members opened up banners calling on the company to drop ties with Israel, according to a statement from No Azure for Apartheid. The group has been asking Microsoft to listen to the more than 1,500 employees who petitioned the company to endorse a ceasefire.

“Today, the ceasefire in Gaza finally takes effect after two years of genocide, but the atrocities, human rights abuses, war crimes, apartheid, and occupation continue,” Sutfin-Glowski wrote.

WATCH: Microsoft is trending toward a $5T market cap, says Wedbush’s Dan Ives

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Signage at the Alibaba Group Holding Ltd. headquarters in Hangzhou, China, on Thursday, Feb. 6, 2025.

Qilai Shen | Bloomberg | Getty Images

Alibaba‘s Hong Kong listed shares surged more than 19% on Monday as the Chinese tech giant’s cloud computing unit drove strong quarterly results, while details emerged over its new AI chip development.

It’s the highest level for the stock since March. Investors have backed the company’s improving performance in its key cloud unit and are content with the the tech giant’s investment into new areas — particularly in the so-called “instant commerce,” which has become incredibly competitive in China.

The Hong Kong rally builds on the momentum of Alibaba‘s earnings report of Friday, when the company’s New York-listed shares closed nearly 13% higher.

Alibaba last week week posted revenue for the June quarter of 247.65 billion Chinese yuan ($34.73 billion), marking a 2% year-on-year rise that nevertheless missed analyst expectations. On the upside, a 78% annual surge in net income came in ahead of forecasts.

The Chinese company’s cloud computing unit was a bright spot with revenue picking up by an annual 26%, which was a faster growth rate than seen in the previous quarter. Alibaba’s cloud growth has been accelerating over the last few quarter.

Like some of its Chinese and U.S. tech rivals, Alibaba has been investing in AI infrastructure and developing its own models, as well as selling AI services for its cloud computing unit. Investors see the division as key to the company’s efforts to monetize artificial intelligence, much like Microsoft or Google.

AI-related product revenue “maintained triple-digit year-over-year growth for the eighth consecutive quarter,” the company said Friday.

That same day, CNBC reported that Alibaba is developing a new AI chip, which also supported the share price rally on Monday.

Alibaba’s core e-commerce business has meanwhile been showing signs of revival, while the company has jumped into China’s cut-throat instant commerce space in China. This is a feature introduced this year on Taobao, one of Alibaba’s main Chinese e-commerce apps, which provides deliveries of certain products in China within an hour.

Investments in quick commerce weighed on Alibaba’s adjusted earnings for its e-commerce business. Investors have given the company some leeway to invest for now.

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From left, President Donald Trump, Oracle Executive Chairman Larry Ellison, SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman appear in the Roosevelt Room of the White House in Washington on Jan. 21, 2025. Trump announced a joint venture to fund artificial intelligence infrastructure.

Aaron Schwartz | Sipa | Bloomberg | Getty Images

Microsoft, the biggest investor in OpenAI and its principal cloud partner, is losing its designation as exclusive provider of computing capacity for the artificial intelligence startup.

In a blog post Tuesday, Microsoft said it’s still in a favorable position with OpenAI. Going forward, when OpenAI seeks additional capacity, Microsoft will have the “right of first refusal” before OpenAI checks with other parties.

The change in their relationship was disclosed as part of President Donald Trump’s announcement of the Stargate Project, a joint venture with OpenAI, Oracle and Softbank to invest billions of dollars in AI infrastructure in the U.S. Executives from those companies committed to invest an initial $100 billion and up to $500 billion over the next four years in the project, which will be set up as a separate company.

Oracle is a “key initial technology partner” alongside Arm, Microsoft and Nvidia in setting up data center infrastructure, OpenAI said in a blog post.

“The data centers are actually under construction,” Oracle Chairman Larry Ellison said at a news conference at the White House, alongside Trump. “The first of them are under construction in Texas. Each building is a half a million square feet. There are 10 buildings currently being built, but that will expand to 20 and other locations beyond the Abilene location, which is, which is our first location.”

Oracle shares jumped 7% on Tuesday.

In 2019, three years before the launch of ChatGPT, Microsoft invested $1 billion in OpenAI, which committed to moving its services to Azure. As OpenAI’s computing needs expanded, Microsoft signed contracts with third-party cloud providers, such as CoreWeave, to supplement its Azure cloud infrastructure.

Oracle entered the mix last year. The database software maker, which trails Amazon, Microsoft and Google in the cloud market, said in June that Microsoft’s Azure AI platform would be extended to Oracle’s cloud.

OpenAI said Tuesday that it will continue to increase consumption of Azure, and Microsoft said OpenAI recently made “a new, large Azure commitment” for products and model training. Microsoft still has rights to OpenAI’s intellectual property, which can go in products such as Copilot. And it still has the exclusive on supplying computing requests for OpenAI’s application programming interface.

But the relationship has shown signs of strain, and Microsoft named OpenAI as a competitor in July. Microsoft CEO Satya Nadella talked about OpenAI CEO Sam Altman’s big ambitions on a podcast with investors Brad Gerstner and Bill Gurley that was released in December.

“What he wants to do, I have to accommodate for, so that he can do what he does,” Nadella said. “And he needs to accommodate for the discipline that we need on our end, given the overall constraints that we may have.”

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The World Artificial Intelligence Conference in Shanghai in July 2023.

Aly Song | Reuters

Alibaba is cutting prices on its large language models by up to 85%, the Chinese tech giant announced Tuesday.

The Hangzhou-based e-commerce firm’s cloud computing division, Alibaba Cloud, said in a WeChat post that it’s offering the price cuts on its visual language model, Qwen-VL, which is designed to perceive and understand both texts and images.

Shares of Alibaba didn’t move much on the announcement, closing 0.5% higher on the final trading day of the year in Hong Kong.

Nevertheless, the price cuts demonstrate how the race among China’s technology giants to win more business for their nascent artificial intelligence products is intensifying.

Major Chinese tech firms including Alibaba, Tencent, Baidu, JD.com, Huawei and TikTok parent company Bytedance have all launched their own large language models over the past 18 months, looking to capitalize on the hype around the technology.

It’s not the first time Alibaba has announced price cuts to incentivize businesses to use its AI products. In February, the company announced price reductions of as much as 55% on a wide range of core cloud products. More recently, in May, the company reduced prices on its Qwen AI model by as much as 97% in a bid to boost demand.

Large language models, or LLMs for short, are AI models that are trained on vast quantities of data to generate humanlike responses to user queries and prompts. They are the bedrock for today’s generative AI systems, like Microsoft-backed startup OpenAI’s popular AI chatbot, ChatGPT.

In Alibaba’s case, the company is focusing its LLM efforts on the enterprise segment rather than launching a consumer AI chatbot like OpenAI’s ChatGPT. In May, the company said its Qwen models have been deployed by over 90,000 enterprise users.

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UKRAINE – 2022/01/07: In this photo illustration a Microsoft Azure logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

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LONDON — Microsoft on Tuesday was accused of unfairly overcharging customers of rival cloud companies in a lawsuit claiming damages of more than £1 billion ($1.27 billion).

The lawsuit alleges customers using Amazon Web Services (AWS), Google Cloud Platform or Alibaba Cloud — all key competitors to Microsoft’s Azure cloud — are forced to pay more to license the tech giant’s cloud-based Windows Server software on rivals’ infrastructure.

Microsoft offers a cheaper price to firms running Windows Server on Azure than on direct competitors like AWS, Google’s cloud or Alibaba Cloud. The lawsuit argues firms running the widely-used server software are essentially being overcharged to use alternative cloud computing solutions.

It adds Microsoft leverages its dominant market position in cloud-based server operating systems by extracting higher prices and inducing customers into moving to Azure. Claimant Maria Luisa Stasi, a competition lawyer, is seeking more than £1 billion in compensation for firms affected.

Microsoft was not immediately available for comment when contacted by CNBC.

“Put simply, Microsoft is punishing UK businesses and organisations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server,” Stasi, who is head of law and policy for digital rights advocacy group Article19, said in a statement shared with CNBC.

“By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”

She added the lawsuit “aims to challenge Microsoft’s anti-competitive behavior, push them to reveal exactly how much businesses in the UK have been illegally penalized, and return the money to organizations that have been unfairly overcharged.”

Thousands of British businesses and organizations are represented in the lawsuit, which is an “opt-out” collective action. That means that any company potentially affected is automatically counted and can receive a payout if Microsoft loses.

Stasi represents the customers of Amazon, Google and Alibaba but doesn’t represent any of these firms, her spokesperson told CNBC.

CMA preparing competition remedies

The development comes as the U.K.’s Competition and Markets Authority is preparing “behavioral” remedies addressing anti-competitive practices in the cloud industry following a months-long probe, with two sources telling CNBC last month a provisional decision could come as soon as this week.

The CMA declined to comment on the specific timing of its provisional decision. However, it’s previously set a deadline of November to December 2024.

Earlier this year, Microsoft struck a 20 million euro ($21 million) settlement with cloud trade body CISPE and its members ending an EU antitrust complaint accusing the tech giant of unfair software licensing practices at its cloud division.

The deal saw Microsoft agree to charge firms the same price for running its software on smaller cloud companies’ systems as it does on its own Azure platform.

But in September, Google filed a fresh antitrust complaint against Google with the European Commission, the executive body of the EU.

The suit alleged that Microsoft’s software licensing terms effectively lock businesses into its Azure platform and make it harder to switch — and thus exerting control over the cloud market.

Solange Viegas Dos Reis, chief legal officer of French cloud computing firm OVHCloud, told CNBC some cloud hyperscalers are essentially “selling together two products that should be totally separated” — widely-used software and cloud infrastructure.

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There’s also an issue of hyperscalers offering more functionality of their software when it’s running on their own cloud services than on third-party cloud services, Dos Reis said without singling out any particular vendor.

From 2017 to 2022, European cloud firms’ market share halved from 27% to 13%, lagging international rivals as the entire European cloud market grew fivefold to 10.4 billion euros ($11 billion), according to data from Synergy Research Group.

The issue of software licensing in cloud is one that’s not been assessed previously, Dos Reis told CNBC in an interview last week, adding OVH has “a lot of hope” with the CMA’s cloud competition case.

OVHCloud agreed its own settlement with Microsoft in July, which saw it drop its own EU antitrust complaint against the U.S. tech giant.

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