Samedia.ai—Microsoft is actively working to integrate both internal and third-party AI models into its flagship AI offering, Microsoft 365 Copilot, according to sources cited by Reuters. This initiative aims to diversify away from OpenAI’s technology, which currently underpins the product.
Sources familiar with the matter told Reuters that the move is intended to reduce costs and improve performance for enterprise users. The effort marks a shift from recent years when Microsoft highlighted its early access to OpenAI’s models, particularly with the announcement of 365 Copilot in March 2023, which featured OpenAI’s GPT-4 model.
In October, the two companies discussed converting Microsoft’s $14 billion investment in OpenAI into equity in the AI firm. According to a December report, OpenAI plans to remove a clause restricting Microsoft’s access to its most advanced AI models upon achieving artificial general intelligence.
A Microsoft spokesperson confirmed that OpenAI remains a partner for frontier models, the most advanced AI models available. “We incorporate various models from OpenAI and Microsoft depending on the product and experience,” the spokesperson said.
Despite this, Microsoft is seeking to reduce its reliance on OpenAI by developing its own smaller AI models, such as the latest Phi-4, and customizing other open-weight models to enhance 365 Copilot’s efficiency and speed. The objective is to make 365 Copilot cheaper to operate, potentially passing savings on to customers.
Meanwhile, the Wall Street Journal reported that Microsoft is trying a new approach to build excitement for its AI assistant Copilot by pushing it on customers, whether they like it or not. The tech company recently added Copilot to its consumer subscription service for software, including Word, Excel, and PowerPoint, in Australia and several Southeast Asian countries. Along with the AI feature, it raised prices for all Microsoft 365 users in those regions.
The move to diversify AI models and the strategic push of Copilot underscore Microsoft’s commitment to leading in the AI space while balancing cost and performance for its users.
