Microsoft MSFT entered into a multi-year partnership and $1-billion investment in OpenAI.Microsoft intends to empower its cloud platform and Azure with robust AI functionalities with the deal. Both the companies will focus on research in AI to develop innovative “Azure AI supercomputing technologies.”Per the terms of the agreement, OpenAI’s services will run on Azure, marking a noteworthy win. Further, OpenAI will select Microsoft as preferred partner “for commercializing new AI technologies.” The latest deal is expected to aid Microsoft in enhancing competitive position in the cloud infrastructure services market against Amazon Web Services, a dominant player.We believe that Microsoft is capitalizing on the rapid adoption of supercomputing systems, which is expected to be a key catalyst for the company. Per ResearchAndMarkets, the supercomputer market is anticipated to witness a CAGR of around 9.5% during the period between 2019 and 2024. Expanding Azure clientele is infusing confidence in the stock. Notably, shares of Microsoft have returned 30.7% in the past year, outperforming the industry’s rally of 25.9%.Microsoft to Aid OpenAI on AGI DevelopmentThe latest collaboration highlights the tech giant’s goal to democratize the reach of AI responsibly, ethically and securely. Microsoft will aid OpenAI to realize its “artificial general intelligence” or AGI goals.Notably, OpenAI is primarily engaged in developing robust AI technologies. With AGI tech, OpenAI aims to improve various domains concerning humanity, comprising cost-effective high-quality personalized healthcare services, enhancing personalized education and climate change, among others.Key TakeawaysMicrosoft is leaving no stone unturned to augment AI capabilities to gain competitive edge over its peers in the digital transformation era.Be it acquisitions, partnerships with companies that have achieved remarkable feat in AI or investments in AI research and development (R&D), Microsoft is clear in its stance of not foregoing any opportunity to enhance AI capabilities.The company is infusing AI capabilities across its portfolio, be it Azure, LinkedIn, Office365, HoloLens products, gaming, and other software and hardware solutions. These initiatives are enabling the company to secure deal wins, which in turn favors the top line. In fact, the latest major deal win comes from AT&T T, which is reportedly more than $2 billion.Additionally, management execution holds key. As Tech Crunch reveals, Microsoft’s $1 billion bet is a cash investment into OpenAI LP. OpenAI intends to utilize the investment within “five years, and possibly much sooner.”Notably, Microsoft ended fourth-quarter fiscal 2019 with cash and short-term investments balance of $133.8 billion, up from $131.6 billion from the previous quarter. Meanwhile, long-term debt (including current portion) came in at 72.2 billion compared with $73.1 billion from the previous quarter.The significant amount of cash provides the flexibility required to pursue any growth strategy, whether by way of acquisitions or otherwise.Zacks Rank & Other Key PicksMicrosoft currently carries a Zacks Rank #2 (Buy).Some other top-ranked stocks in the broader technology sector are Alteryx AYX and Rosetta Stone RST, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Long-term earnings growth rate for Alteryx and Rosetta Stone is currently pegged at 13.7% and 12.5%, respectively.Today's Best Stocks from ZacksWould you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.See their latest picks free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Rosetta Stone (RST): Free Stock Analysis Report Alteryx, Inc. (AYX): Free Stock Analysis Report To read this article on Zacks.com click here.