Microsoft has developed in-house artificial intelligence models designed to rival industry leaders, including its partner OpenAI, according to a source familiar with the matter.
The company’s new family of models, known internally as MAI, have shown promising test results. These results suggest they are competitive with leading AI systems developed by OpenAI and Anthropic, the source said, speaking on condition of anonymity to discuss internal matters. The Redmond, Washington-based company has tested the MAI models on various tasks, including integrating them into its Copilot AI assistants. The Copilots are designed to address a broad range of user inquiries and offer assistance to people working on documents or participating in conference calls.
Microsoft is also developing reasoning models, which are designed to handle complex questions and exhibit human-like problem-solving capabilities – an area of AI development where OpenAI, Anthropic, and Alphabet Inc. are also investing heavily. Last month, Microsoft integrated OpenAI’s o1 reasoning model into its Copilot products. “As we’ve said previously, we are using a mix of models, which includes continuing our deep partnership with OpenAI, along with models from Microsoft AI and open source models,” a Microsoft spokesperson said.
The Information previously reported on Microsoft’s work on these models.
The development of MAI models could potentially reduce Microsoft’s dependence on OpenAI. Microsoft has invested approximately $13 billion in the ChatGPT maker, and the relationship between the two companies has been a subject of discussion within the tech industry. The two companies recently renegotiated their agreement, announcing in January that OpenAI could use servers from other cloud-computing rivals to power its services, provided Microsoft did not want to provide the service itself. Their agreement extends until 2030.
OpenAI declined to comment. At a Morgan Stanley conference earlier this week, Microsoft Chief Financial Officer Amy Hood stated, “We’re both successful when each of us are successful. So as you go through that process, I do think everybody’s planning for what happens for a decade, or two decades. And that’s important for both of us to do.”
Microsoft already offers smaller, internally-developed models, known as Phi, and resells AI models from a range of other companies. The Information reported that it has also tested models from Anthropic, DeepSeek, Meta Platforms Inc., and Elon Musk’s xAI to determine their suitability for supporting Copilot. “We feel great about having leading models from OpenAI, we’re still incredibly proud of that,” Hood said earlier. “But we also have other models, including ones we build, to make sure that there’s choice.”
