Microsoft Cuts AI Costs by Shifting to In-House Models
Microsoft reportedly begins shifting away from third-party AI models in favor of its own in-house alternatives as part of a cost-savings strategy. For widely used programs like Word and Excel, the company now uses its homemade MAI models to handle a certain percentage of user prompts, according to Bloomberg. Microsoft had previously marketed Office 365 as being powered by models from OpenAI and Anthropic.
While the tech giant still relies on those third-party providers, it continues to invest heavily in building out its own AI capabilities. At its annual Build conference last month, Microsoft announces the launch of seven new MAI models, including an agentic coder and a text-to-image generator. The move signals a clear push toward greater self-reliance in the AI space.
Microsoft's strategy reflects a broader industry trend as major tech companies grapple with the immense costs of providing and purchasing AI services. Firms like Amazon, Uber, Meta, and Accenture also reportedly take steps to curb AI-related spending. In some cases, companies even explore Chinese AI models for more affordable options, despite potential security concerns.