Microsoft Corp., seeking to lower its artificial intelligence expenses, has begun replacing external AI providers such as OpenAI and Anthropic with its own in-house models in applications like Excel and Outlook.
Microsoft's proprietary MAI models now handle many thousands of AI prompts each week within Excel and Outlook, according to a source with knowledge of the shift who spoke on condition of anonymity. Before this change, Excel and Outlook relied more on external models from OpenAI and Anthropic, the individual added.
The extent to which MAI models are being used across Microsoft's workplace software has not been publicly disclosed before. A company representative declined to comment.
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Although this usage still represents a minor fraction of overall AI activity, this development shows Microsoft's progress toward building competitive AI models that are more cost-effective.
Microsoft consumes enormous volumes of AI tokens across products like its Copilot workplace assistant. For the time being, the company benefits from discounted access to advanced models due to its long-standing alliance with OpenAI. However, that favorable pricing arrangement will not last indefinitely, and Suleyman's team is preparing to avoid being forced to pay whatever rates the leading AI labs may set in the future.
This strategic shift reflects Microsoft's broader ambition to reduce dependence on external AI partners. By developing its own models, Microsoft not only cuts costs but also gains greater control over performance, data privacy, and integration with its ecosystem. The move comes as competition in the AI market intensifies, with major tech firms racing to build proprietary models that can match or exceed third-party offerings.
Additionally, having in-house models allows Microsoft to tailor AI behavior specifically for its Office suite, potentially improving user experience and reducing latency. For users, the change is mostly invisible; Excel and Outlook's AI features continue to work as before, but Microsoft's internal models may eventually enable faster responses and tighter integration.
The new models span various capabilities, including language understanding, generation, and coding, giving Microsoft a broader portfolio to draw from.
Microsoft's MAI models are also accessible through GitHub Copilot, its AI-powered coding assistant. Suleyman mentioned that a Microsoft-developed transcription model will soon be integrated into the Teams videoconferencing platform and other products within the next few months. This expansion indicates that the company intends to apply its own models across multiple product lines, gradually phasing out external dependencies.
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