Microsoft is exploring third-party AI models for its products, including Microsoft 365 Copilot, as part of an effort to reduce its reliance on OpenAI and curb escalating costs. The tech giant, which has been a major backer of OpenAI, investing an estimated $10 billion in the startup, is now reconsidering the financial impact of its dependence on ChatGPT for corporate use.
While specific third-party options have not been disclosed, Microsoft is exploring alternatives amid the growing AI market. The company has already begun diversifying its AI offerings across different divisions. For example, GitHub, which Microsoft acquired in 2018, incorporated models from Anthropic and Google as alternatives to OpenAI’s GPT-4 in October. Microsoft itself has also been developing its own AI models, including the Phi-4, an updated AI with 14 billion parameters, introduced in December and designed to solve mathematical problems more effectively.
Microsoft 365 Copilot, an AI assistant integrated into popular Microsoft software like Word and PowerPoint, was launched shortly after the success of ChatGPT. However, despite being used by nearly 70% of Fortune 500 companies, Microsoft has yet to reveal whether the product has been profitable, as it is not included in public financial reports.
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