**Microsoft Deepens Cloud Partnerships with Databricks and Mistral, Expanding Azure Capabilities Across Europe and Beyond**
Microsoft has significantly strengthened its cloud computing strategy by expanding long-term partnerships with data and AI platform leader Databricks and French artificial intelligence company Mistral. These collaborations encompass Azure infrastructure usage, custom processor adoption, enhanced European computing capacity, and broader AI model distribution.
### **Extended Partnership with Databricks into the 2030s**
Databricks has announced that its partnership with Microsoft will extend well into the 2030s. Under this expanded collaboration, Databricks will intensify its use of Microsoft Azure for internal business operations and advanced analytics. Additionally, the company is migrating more of its workloads onto Azure’s custom silicon, specifically Microsoft-designed processors, to optimize performance and efficiency.
At the core of the partnership is the utilization of **Azure Databricks** to manage Databricks’ core business operations and analytics, while simultaneously building its unified lakehouse platform. According to Ali Ghodsi, Databricks’ co-founder and CEO, the deep integration of **Databricks Genie** and the **Unity AI Gateway** across Microsoft’s product suite enables enterprises to unify their data and ground AI in real business knowledge.
A key component of the agreement involves greater adoption of **Azure Cobalt**, Microsoft’s Arm-based server processors. Databricks is currently using Cobalt 100 processors and plans to transition to **Cobalt 200**, which Microsoft claims offers up to 50% better generational performance, depending on the workload. The new chips include memory encryption by default and are engineered for scale-out workloads such as data pipelines, cloud databases, and agentic AI applications. **Azure Boost** is also leveraged to offload networking and storage functions.
The partnership further integrates Databricks’ technology throughout Microsoft’s software ecosystem, including tools like **Power BI**, **Microsoft Teams**, **Entra**, **Purview**, **Foundry**, and **Copilot**. Features like **Genie**, a natural-language-driven conversational analytics tool, and **Unity AI Gateway**, a centralized governance and operational layer for AI models, are being embedded more deeply into customer workflows.
Databricks reports that its platform is used by over 20,000 organizations, including 70% of Fortune 500 companies. The company recently secured funding in a round that valued it at $188 billion, expected to close later in the summer.
### **Mistral Expands European Infrastructure Options**
In a separate but related development, Microsoft and Mistral have strengthened their infrastructure collaboration with a multibillion-dollar agreement centered on Mistral’s computing facilities in Europe. Under this deal, Azure customers will be able to develop software using Mistral’s data centers located in France. These European resources will be operated by Mistral and made accessible to Azure clients through the partnership.
This arrangement offers European and regulated organizations an alternative for running AI workloads on infrastructure situated in France while continuing to use Microsoft’s software and security services. The deployment options span **Azure**, **Azure Local**, and Mistral’s own European infrastructure, with model availability tailored to the specific product and environment. **Azure Local** enables cloud-connected and fully disconnected environments, allowing select Azure services and management tools to operate outside public cloud regions—addressing needs around data residency, operational control, latency, and business continuity.
Mistral has set an ambitious target of achieving one gigawatt of computing capacity by 2030, with Microsoft’s spending commitment covering a portion of this goal. Mistral plans to scale capacity using thousands of Nvidia Vera Rubin GPUs for model training and large-scale deployments. While Mistral’s data center expansion relies on Nvidia hardware, Databricks is increasing its use of Microsoft’s Cobalt processors. Both Nvidia and Microsoft are existing investors in Mistral.
The partnership also broadens the distribution of Mistral’s AI models through Microsoft products. Models such as **Mistral Medium 3.5** and **OCR 4** are now available through **Microsoft Foundry**, and Medium 3.5 is accessible via **Copilot Studio**. Azure Local customers can also run Mistral models under open or open-weight licensing, subject to the specific terms of each license.
Microsoft President Brad Smith clarified that the agreement does not include a new equity investment in Mistral, noting that both Microsoft and Nvidia had previously invested in the French company. Mistral CEO Arthur Mensch emphasized that the collaboration reflects a joint effort to close the infrastructure gap in Europe, with a shared go-to-market strategy in development. Mistral is focusing on sectors such as manufacturing, financial services, defense, and the public sector, including work with France’s armed forces.
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### **FAQ**
**Q1: What is the duration of Microsoft’s partnership with Databricks?**
A: The partnership between Microsoft and Databricks is extended into the 2030s, indicating a long-term strategic commitment.
**Q2: Which Microsoft processors will Databricks adopt?**
A: Databricks plans to increase its use of Azure Cobalt processors, moving from Cobalt 100 to Cobalt 200, which offers improved performance and memory encryption.
**Q3: How will Mistral’s collaboration with Microsoft benefit European customers?**
A: Mistral’s infrastructure in France will allow Azure customers in Europe to develop and run AI workloads using localized data centers, addressing regulatory and latency concerns.
**Q4: What AI models from Mistral are available through Microsoft?**
A: Mistral Medium 3.5 and OCR 4 are available via Microsoft Foundry, and Medium 3.5 is also accessible through Copilot Studio.
**Q5: Does Microsoft hold equity in Mistral as part of this agreement?**
A: No, Microsoft President Brad Smith confirmed that the agreement does not include a new equity investment in Mistral.
**Q6: What is the role of Azure Local in these partnerships?**
A: Azure Local enables selected Azure services and management tools to run in disconnected or data-residency-sensitive environments, supporting organizations with strict operational and compliance requirements.
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### **Conclusion**
Microsoft’s expanded partnerships with Databricks and Mistral underscore a strategic push to integrate cutting-edge data and AI capabilities more deeply into its cloud ecosystem. By leveraging custom processors, enhancing European infrastructure options, and broadening AI model availability, Microsoft is offering its customers greater flexibility, performance, and compliance options. These collaborations not only reinforce Azure’s position in the cloud market but also accelerate the adoption of AI and advanced analytics across industries worldwide.
