London Daily

Focus on the big picture.
Friday, Aug 22, 2025

Microsoft invests $2 billion in London Stock Exchange cloud deal

Microsoft invests $2 billion in London Stock Exchange cloud deal

Microsoft (MSFT.O) will buy a 4% stake worth $2 billion in the London Stock Exchange Group (LSEG.L), in the latest sign of blurring boundaries between Big Tech and financial firms which have raised some concerns among regulators.
LSEG said on Monday the deal would bring a "meaningful" upside to revenues after 2025 from selling more of its existing products via Microsoft apps to broaden the customer base, along with better pricing of products, but it declined to give any specific estimates.

Deepening ties between the handful of big global cloud companies such as Microsoft, Google (GOOGL.O), Amazon (AMZN.O) and IBM (IBM.N), and financial companies like banks and exchanges, have prompted regulators to scrutinise the links more closely.

Microsoft has a longstanding relationship with LSEG, and the exchange group's Chief Executive David Schwimmer said that about a year ago they began talks on a more strategic relationship.

"It's a long term partnership. In terms of the products we will be building together, I would expect our customers to start to see the benefits of that 18 to 24 months out and we will continue building from there," Schwimmer told Reuters.

In November 2021, Google said it would invest $1 billion in CME Group to move the U.S. derivatives exchange's trading systems to the cloud. In the same month, U.S. exchange Nasdaq and Amazon announced a similar multi-year partnership.

Regulators have expressed concern about the over-reliance of financial firms on too few cloud providers, given the disruption this could cause if a provider serving many clients went down.

The European Union has just approved a law introducing safeguards on cloud providers in financial services, with Britain set to follow suit.

"You should assume we do not like to surprise our regulators," Schwimmer said, when asked if LSEG has ensured that regulators were on board.

'MEANINGFUL"

LSEG said the link with Microsoft, which gives the software group a seat on LSEG's board, is a partnership to reap the benefits of "consumption-based pricing", and not a traditional cloud deal.

"We will continue to maintain our multi-cloud strategy and working with other cloud providers," Schwimmer said.

Incremental costs will total 250 to 300 million pounds over 2023 to 2025, with a 50 to 100 basis points impact on EBITDA margin over that two-year period.

Analysts asked Schwimmer to elaborate on his comment about a "meaningful" upside to revenues from the deal, but he declined to do so.

"This feels like a key milestone in LSEG's journey towards being information solutions-centric, even if 'meaningful' revenue growth specifics are lacking," analysts at Jefferies said.

Jefferies analysts said the deal could "transformationally" broaden the appeal of LSEG's Workspace, with a potentially compelling alternative to Instant Bloomberg available for the first time.

LSEG shares were up about 3% and were the top performers on the blue-chip FTSE 100 index (.FTSE) and on course for their strongest day since mid-August.

Microsoft's Frankfurt listed shares were down about 0.4%.

'INTEROPERABILITY'

As part of the deal, LSEG has made a contractual commitment for minimum cloud-related spend with Microsoft of $2.8 billion over the term of the partnership.

The initial focus will be on delivering "interoperability" between LSEG Workspace and Microsoft Teams, Excel and PowerPoint with other Microsoft applications, and a new version of LSEG’s Workspace, Microsoft said.

LSEG and Microsoft will look at how they could work together to potentially shift trading or clearing activities to the cloud

"It's in a more exploratory phase at this point, but we will update the market as that continues to develop," Schwimmer said.

LSEG bought Refinitiv for $27 billion from a Blackstone and Thomson Reuters' consortium, which turned the exchange into the second largest financial data company after Bloomberg LP.

Microsoft will buy LSEG shares from the Blackstone (BX.N)/Thomson Reuters (TRI.TO), consortium, the exchange operator said. The deal will make Microsoft the seventh biggest shareholder in LSEG, based on Refinitiv data.

Thomson Reuters, which owns Reuters News, has a minority shareholding in LSEG following the Refinitiv deal. LSEG also pays Reuters for news.

Microsoft's purchase is expected to complete in the first quarter of 2023.

($1 = 0.8141 pounds)
Newsletter

Related Articles

0:00
0:00
Close
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
×