Dec. 24 (Bloomberg) -- According to Reuters, sources familiar with the matter revealed thatMicrosoftis working on its flagship AI product Microsoft 365 Copilot The introduction of in-house and third-party artificial intelligence models inwith a view to moving away from the current focus on OpenAI technology dependency and reduce operating costs.
This is the latest move by Microsoft to reduce its reliance on OpenAI, which it supports. Previously, Microsoft had heavily touted its early access to OpenAI models. when Microsoft released 365 Copilot in March 2023, one of its main selling points was the use of OpenAI's GPT-4 models.
Microsoft is also looking to reduce 365 Copilot's reliance on OpenAI out of concerns about cost and speed for enterprise users, the sources said.
A Microsoft spokesperson said OpenAI remains the company's partner for "cutting-edge models," meaning state-of-the-art AI models. The initial agreement between the two companies allowed Microsoft to customize OpenAI's models. "We integrate various models from OpenAI and Microsoft based on product and experienceOpenAI declined to comment.
In addition to training its own small models, including the latest Phi-4, Microsoft is also working to customize other open-source models to improve the speed and efficiency of 365 Copilot, the sources added. The goal of the move is to reduce Microsoft's cost of running 365 Copilot, one of the sources said. Microsoft executives, including CEO Satya Nadella, are said to be keeping a close eye on the effort.
1AI notes that this move is similar to the way other Microsoft business units have adapted the way OpenAI models are used.GitHub, which Microsoft acquired in 2018, added Anthropic and Google's models in OctoberCopilot is a replacement for OpenAI's GPT-4, which was revamped in October. Copilot, its consumer chatbot that was revamped in October, is also now powered by internal models as well as OpenAI models.
Microsoft 365 Copilot, an AI assistant built into Microsoft's suite of enterprise software, including Word and PowerPoint, is still trying to prove its ROI to organizations. Microsoft has yet to release specific sales figures on the number of licenses sold, and there are concerns about pricing and usability. Microsoft said in a November blog post that 70% Fortune 500 companies are using 365 Copilot.