Tech giant Microsoft announced a decade-long partnership with the London Stock Exchange and took a nearly 4 percent stake in the U.K. Bourse operator.
The $2 billion purchase marks the latest sign of blurring boundaries between Big Tech and financial firms, which has raised concerns among some regulators.
The partnership involves next-generation data and analytics, as well as cloud computing products, according to a statement by the London Stock Exchange.
It includes a new data infrastructure for the London exchange and analytics and modeling solutions with Microsoft Azure, AI, and Microsoft Teams.
Shares in the London Stock Exchange were up 4% in Europe on Monday after the announcement came out.
“This strategic partnership is a significant milestone on LSEG’s journey towards becoming the leading global financial markets infrastructure and data business and will transform the experience for our customers,” David Schwimmer, CEO of the London Stock Exchange, said in the statement.
The London Stock Exchange 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.
There have been deepening ties between the handful of big global cloud companies like Microsoft, Google, Amazon, and IBM, with financial companies like banks and exchanges. It has prompted regulators to scrutinize the links more clearly.
Microsoft has a longstanding relationship with the London Stock Exchange, and the exchange group’s Chief Executive David Schwimmer said that about a year ago they began talks on a more strategic relationship.
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.