Microsoft shifts towards proprietary AI models to control costs
Microsoft has begun integrating its own AI models, known as MAI models, into products like Word and Excel to reduce dependency on external providers and manage rising AI costs.
What happened?
Microsoft has implemented a strategy to reduce the costs of generative AI by increasing the use of its own models. The company has begun replacing some usage of models from OpenAI and Anthropic with its proprietary MAI models in applications such as Word and Excel. This was reported on 7 July 2026. The change means that a percentage of user queries are now handled by Microsoft's internal AI systems.
Key facts
| Datum för rapport | 7 juli 2026 |
|---|---|
| Typ av modeller | MAI-modeller |
| Berörda produkter | Word, Excel |
| Antal nya MAI-modeller | 7 |
| Lansering av nya MAI-modeller | Föregående månad (juni 2026) |
”As AI costs continue to rise, companies are looking for ways to cut back. The most recent example is Microsoft, which has reportedly begun to deploy a cost-savings strategy by relying less on software from OpenAI and Anthropic and instead deploying its own in-house models.”
”Indeed, when it comes to two of its most widely used programs — Excel and Word — Microsoft has begun to use its homemade MAI models to respond to a certain percentage of user prompts, Bloomberg reported Tuesday.”
Why it matters
The shift is part of a broader trend among technology companies to control rapidly increasing AI operating costs. By developing and implementing its own models, Microsoft can reduce expenditure on licensing and resource usage from third-party providers. During its Build conference last month, the company introduced seven new MAI models, including a code generator and a text-to-image generator, illustrating its growing internal capability.
Who is affected?
This change primarily impacts Microsoft as a corporation through lower operational costs. Partners like OpenAI and Anthropic may see a decrease in demand for their models from Microsoft. For Office 365 end-users, it represents a shift in which AI models process certain requests, but functionality is expected to remain consistent as this is solely a backend migration.
What else you should know
Microsoft previously marketed that large parts of Office 365 were powered by models from OpenAI and Anthropic. It is noteworthy that the company is now reframing its strategy to include a larger proportion of proprietary technology.
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