Microsoft Develops AI Models to Compete With OpenAI
Microsoft Corp. has developed its own artificial intelligence models, internally referred to as MAI, which the company believes can rival industry leaders, including its partner OpenAI, according to sources familiar with the matter.
One source, who requested anonymity to discuss internal matters, stated that the family of MAI models has recently produced test results suggesting they are competitive with state-of-the-art rivals, including those from OpenAI and Anthropic. The Redmond, Washington-based company has been testing the models’ performance on various tasks, including powering its Copilot-branded AI assistants.
Copilots are designed to address a wide array of user queries and provide specific suggestions for people working on documents or during conference calls.
Microsoft is also working on so-called reasoning models, which are designed to handle more complex queries and demonstrate human-like problem-solving abilities. OpenAI and Anthropic, as well as Alphabet Inc., are also investing in the development of similar models. Last month, Microsoft incorporated 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 stated.
The Information previously reported on Microsoft’s in-house model development.
Microsoft’s MAI models could eventually decrease the company’s dependence on OpenAI. Microsoft has already invested approximately $13 billion in the ChatGPT maker, and the relationship between the two companies has been a topic of discussion in tech industry circles. Microsoft and OpenAI recently renegotiated their deal, and in January, it was announced that OpenAI could power its services with servers from other cloud-computing rivals, provided that Microsoft did not want the business itself. Their agreement is set to run until 2030.
OpenAI declined to comment on the matter.
“We’re both successful when each of us are successful,” Microsoft Chief Financial Officer Amy Hood said earlier this week at a Morgan Stanley conference. “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.”
The company already offers a set of smaller, Microsoft-built models, named Phi, and resells AI models made by many other companies. It has tested how well models from companies including Anthropic, DeepSeek, Meta Platforms Inc., and Elon Musk’s xAI would perform in support of Copilot, The Information reported.
“We feel great about having leading models from OpenAI, we’re still incredibly proud of that,” Hood previously said. “But we also have other models, including ones we build, to make sure that there’s choice.”
