Microsoft Diversifies AI Strategy for 365 Copilot

Investing.com — Microsoft (NASDAQ:MSFT) has been incorporating internal and third-party artificial intelligence models into its AI product, Microsoft 365 Copilot, as reported by Reuters on Monday.

This initiative aims to reduce costs and diversify from the existing technology provided by OpenAI.

Despite being a significant supporter of OpenAI, Microsoft is working to decrease its reliance on the AI startup. This marks a notable shift from prior years when Microsoft emphasized having early access to OpenAI's models.

Additionally, Microsoft is looking to reduce 365 Copilot's dependence on OpenAI due to concerns about cost and speed for enterprise users.

A Microsoft spokesperson stated that OpenAI remains a partner for the company on frontier models, which are the most advanced available. The current agreement allows Microsoft to modify OpenAI’s models.

Microsoft is now training its smaller models, including the latest Phi-4, and customizing other open-weight models to improve the speed and efficiency of 365 Copilot. The goal is to lower the operational costs for Microsoft, potentially passing these savings on to customers, according to a source.

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