Microsoft is reportedly looking beyond OpenAI to power its flagship AI product, Microsoft 365 Copilot. The tech giant is reportedly exploring the use of alternative language models. This marks a shift from the company's previous emphasis on its early access to OpenAI's models, which was a key selling point when 365 Copilot launched in 2023.
Why Microsoft is making this change
Citing sources, news agency Reuters reported that Microsoft is also seeking to reduce 365 Copilot's reliance on OpenAI due to concerns about speed for enterprise users. The company is also aiming to reduce its reliance on OpenAI's technology and potentially lower costs.
For this, Microsoft is reportedly training its own smaller models, like the recent Phi-4, and customising open-weight models to improve 365 Copilot's efficiency and performance.
“We incorporate various models from OpenAI and Microsoft depending on the product and experience,” a Microsoft spokesperson told the agency, while confirming that OpenAI remains a partner for “frontier models.”
The goal is also to potentially pass those savings to the end customer, and Microsoft's leaders, including CEO Satya Nadella, are said to be tracking the efforts closely.
This move mirrors similar efforts in other Microsoft business units. GitHub, for example, recently added models from Anthropic and Google as alternatives to OpenAI's GPT-4o. Microsoft's consumer chatbot, Copilot, also now utilizes in-house models alongside OpenAI's technology.
Tension between Microsoft and OpenAI
Several reports have suggested that the close partnership between Microsoft and OpenAI may be facing some challenges. Just a year after Microsoft played a key role in reinstating Sam Altman as OpenAI's CEO, their relationship appears to be showing signs of strain.
While acknowledging the natural tensions in any partnership, Suleyman hinted at the diverging paths of the two companies.
"Every partnership has tension. It's healthy and natural. I mean, they're a completely different business to us. They operate independently and partnerships evolve over time… partnerships evolve and they have to adapt to what works at the time, so we'll see how that changes over the next few years," Suleyman said.
