Microsoft Replaces OpenAI/Anthropic Models in Copilot

Microsoft is now quietly replacing AI models from OpenAI and Anthropic with its own internally built models for several products. This shift impacts GitHub Copilot, Excel, and Outlook, with Copilot Chat and PowerPoint next in line. Satya Nadella explains this move is primarily about cost. He says software now has a real marginal cost, making the choice of AI model a business decision. Microsoft's in-house MAI models are designed to perform just as well as, or even better than, general-purpose frontier models on many tasks, but at a fraction of the cost. For example, the MAI model for Excel matches GPT 5.4 performance while running up to ten times more efficiently. This efficiency translates to significant savings given Microsoft's scale. The company is also offering this capability to other enterprises through its Foundry service. This strategy aims to use expensive models only where they are essential, and cheaper, proprietary models for everything else.