Microsoft Corp. has started replacing AI models from OpenAI and Anthropic with its own internally developed MAI models in flagship productivity tools like Excel and Outlook, according to sources cited by Bloomberg. The shift is part of a broader push to reduce reliance on third-party AI providers and lower associated costs. The move signals a strategic pivot as the tech giant seeks greater control over its AI stack.
This transition comes as Microsoft deepens its investment in custom AI capabilities while maintaining its partnership with OpenAI, which has been a key driver of its Copilot features. The decision reflects a common industry trend where major tech firms increasingly develop proprietary models to reduce external dependencies and licensing fees. Analysts view this as a natural evolution as AI becomes a core competitive differentiator.
Cost reduction appears to be the primary motivator, with external AI model usage carrying significant per-token expenses at scale. By deploying MAI models across widely used applications like Excel and Outlook, Microsoft can potentially save millions in annual licensing fees. The company has been quietly building its internal AI team and infrastructure to support such a transition.
The replacement is expected to roll out gradually to avoid disrupting user experience, with Microsoft likely focusing on less critical features first. If successful, this approach could set a precedent for other enterprise software giants to follow. The move also underscores the growing importance of vertical AI integration in the productivity software market.
Industry observers note that while cost reduction is a clear benefit, in-house models may initially lack parity with specialized models from OpenAI in complex reasoning tasks. Microsoft has not publicly commented on the timeline or specific performance benchmarks for MAI models in these applications.