C3.ai (NYSE:AI) came out swinging Tuesday morning, with its stock shooting up over 24% after announcing an expanded strategic alliance with Microsoft (NASDAQ:MSFT). The deal has all the buzzwords investors lovetechnical integration, joint sales and marketing, and a focus on accelerating AI-driven business transformation. Microsoft will now be the go-to cloud provider for C3.ais offerings, while C3.ai gets a spot as a preferred AI partner on Azure. Sounds like a win-win, right? Not so fast.

• Warning! GuruFocus has detected 5 Warning Signs with AI.

Heres the catch: this new deal isnt exactly new. Microsoft and C3.ai have been teaming up since 2018, delivering solutions to big names like Shell and Nucor. And while the press release promises enhanced capabilities and shiny innovations, it doesnt offer a single number to back up the hypeno revenue forecasts, no profit projections, nada. Meanwhile, C3.ai is still bleeding cash, with $280 million in losses last year and no profitability in sight. The power dynamics here also raise eyebrows. Microsoft, with nearly $3.1 trillion market cap, is clearly the dominant player. C3.ai? A niche contributor with a market cap of just $3.3 billion.

The markets reaction feels more like overexuberance than rational optimism. Sure, the partnership is a credibility boost for C3.ai in a competitive AI market, but lets not forget that flashy alliances dont always translate to dollar signs. For now, this looks like a long-term story with a lot of ifs and maybes. Investors should think twice before piling in based on hype alone.

This article first appeared on GuruFocus.