In an attempt to diversify from the current OpenAI underlying technology and cut expenses, Microsoft has been working on integrating both internal and external artificial intelligence models to power its flagship AI product, Microsoft 365 Copilot products , according to sources familiar with the project who spoke to Reuters.
Microsoft, a significant supporter of OpenAI, is making a new attempt to reduce its reliance on the AI firm. This is different from previous years when Microsoft boasted about having early access to OpenAI’s models. One of Microsoft’s main selling points when it unveiled 365 Copilot in March 2023 was that it made use of OpenAI’s GPT-4 model.
According to individuals who asked not to be named in order to discuss private things, Microsoft is also looking to lessen 365 Copilot’s reliance on OpenAI because of worries about cost and speed for enterprise users.
According to a Microsoft representative, OpenAI remains the company’s partner on frontier models, which are the most cutting-edge AI models on the market. The software behemoth is permitted to alter OpenAI’s models under the terms of the initial agreement between the two businesses.
Depending on the product and experience, we use different OpenAI and Microsoft models,” Microsoft said in a statement. OpenAI chose not to respond.
According to the sources, Microsoft is working to improve 365 Copilot products speed and efficiency by customizing various open-weight models in addition to training its own smaller models, such as the most recent Phi-4.
In an attempt to diversify from the existing OpenAI underlying technology and cut expenses, Microsoft has been working on integrating both internal and external artificial intelligence models to power its flagship AI product, Microsoft 365 Copilot, according to people familiar with the project who spoke to Reuters.
According to a Microsoft representative, OpenAI is still the company’s partner on frontier models, which are the most cutting-edge AI models on the market. The software behemoth is permitted to alter OpenAI’s models under the terms of the initial agreement between the two businesses.
According to a statement from Microsoft, “we incorporate various models from OpenAI and Microsoft depending on the product and experience.” OpenAI chose not to respond.
This adjustment is similar to other Microsoft corporate groups that have modified their OpenAI model usage. In October, Anthropic and Google models were added to GitHub, which Microsoft purchased in 2018, as alternatives to OpenAI’s GPT-4o. Redesigned in October, its consumer chatbotCopilot is now driven by both OpenAI and in-house models.
The AI helper Microsoft 365 Copilot, which is integrated into Microsoft’s business software package, which includes Word and PowerPoint, is still attempting to demonstrate to businesses how much it is worth. Concerns have been raised regarding pricing and usefulness, and Microsoft has not disclosed precise sales figures regarding the quantity of licenses sold.
According to a poll conducted in August by research firm Gartner, the vast majority of 152 IT businesses have not advanced their 365 Copilot programs beyond the pilot level.
Nevertheless, BNP Paribas Exane analysts noted that adoption has accelerated and predicted that Microsoft will sell 365 Copilot to over 10 million paying customers this year. In a November blog post, Microsoft also claimed that 365 Copilot is used by 70% of Fortune 500 businesses.
(Reporting by Anna Tong in San Francisco and Krystal Hu in Toronto; Additional reporting by Jeffrey Dastin in San Francisco; Editing by Matthew Lewis)
