Microsoft wants to build an open relationship with OpenAI

Microsoft and OpenAI have a symbiotic relationship, with the former giving the startup AI lab billions in capital in return for early access to advanced models developed in Microsoft’s suite of productivity software. However, the two companies are headed in different directions Reuters It was announced today that Microsoft intends to add more models to its 365 Copilot product that are not developed by OpenAI.

According to the report, the reason is that Microsoft did not see OpenAI’s advanced GPT-4 model as too expensive and fast enough to satisfy its enterprise customers. Copilot 365 is an AI-powered assistant built into Microsoft’s suite of productivity applications, including Word and PowerPoint. The tool should take in all of the company’s data and do a myriad of things, such as allowing users to quickly find information without having to hunt through different applications; quickly create a list of the most profitable business units of the company; or wrap up meetings and emails instantly.

this it was assumed to do these things, but customers and insiders are still stuck with Copilot 365, which costs an additional $30 per month per user on the team. Recently Business Insider the storyMicrosoft employees who spoke anonymously called the tools “terrible” and “gimmicky,” not working well 75% of the time. On the customer front, Business Insider Citing a survey of 123 IT leaders published by management consulting firm Gartner, only four said Copilot provided significant value to their companies. It should be noted that some other stories report companies that have found value in using large language models, such as by simplifying customer support.

Some customers talking Business Insider specifically noted that the 365 Copilot is too expensive.

A limitation of OpenAI’s ChatGPT is that it is a general model, meaning it is trained on a large data space and can be more expensive and slower to run; therefore, most models are offered in “lite” versions that produce less intensive output or “thinking”. Microsoft trains its own smaller models called Phi-4 and Reuters reports that sources speaking to the outlet said the company is trying to “customize other open-weight models to make the 365 Copilot faster and more efficient.”

In one sense, it makes sense that Microsoft would want to reduce its reliance on OpenAI. If the company is right and AI is going to be the next generational shift in computing, it’s not a good idea to rely on an independent company for the underlying technology.

Microsoft has and will continue to spend billions of dollars on OpenAI 75% of its profit he will have a large stake in the startup until and even after he breaks his investment. The company is effectively hedging its bets—building its own internal models, holding a lottery ticket on OpenAI in case it continues its current skyward trajectory.

Despite its cutting edge today, some skeptics of OpenAI say that we may not yet know the real winner in the AI ​​race (as revolutionary as these technologies are supposed to be). Just as there were many search engines online in the 90s, they were quickly defeated when the late Google appeared. Microsoft is probably smart to hedge.