In a strategic shift signaling a move away from its dependence on OpenAI, Microsoft is actively developing its own artificial intelligence (AI) reasoning models, internally referred to as ‘MAI.’ The move, first reported by The Information, is designed to strengthen Microsoft’s AI capabilities while reducing its reliance on the ChatGPT maker. Microsoft has already started testing AI models from other prominent companies such as xAI, Meta, and DeepSeek as potential substitutes for OpenAI’s technology in its flagship product, Microsoft 365 Copilot. This shift comes despite Microsoft’s substantial $13.75 billion investment in OpenAI since 2019, reflecting its broader ambitions in the AI domain.
The MAI models are engineered to tackle complex reasoning and problem-solving tasks, with performance capabilities said to rival OpenAI’s and Anthropic’s models. Led by Mustafa Suleyman, who heads Microsoft’s AI division, the company has developed a series of these models. Microsoft employs chain-of-thought techniques — an advanced AI reasoning process that generates answers through intermediate reasoning steps — to train these models. The company is already experimenting with incorporating these MAI models into Microsoft 365 Copilot, replacing OpenAI’s technology in certain use cases. Furthermore, Microsoft is considering launching MAI as an application programming interface (API) later this year, enabling external developers to integrate Microsoft’s AI capabilities into their own applications.
This move aligns with Microsoft’s broader strategy to diversify its AI infrastructure. Initially, Microsoft 365 Copilot was marketed heavily as using OpenAI’s GPT-4 model when it launched in 2023. However, over time, Microsoft began exploring alternatives for three key reasons: to minimize exclusive dependency, cut costs, and improve processing speeds. The shift follows reports from Reuters in December 2024, which highlighted that Microsoft was integrating both internal and third-party AI models into Copilot. While Microsoft remains a key partner of OpenAI, their relationship has evolved. A significant change occurred when Microsoft gave up its exclusive role as OpenAI’s cloud provider and instead entered into a ‘right of first refusal’ agreement. This agreement allows OpenAI to seek cloud services from other providers, including Oracle.
As Microsoft continues developing its in-house AI models, the introduction of MAI could significantly impact the AI ecosystem. If the company successfully deploys these models across its suite of products and makes them available to developers, it could challenge OpenAI’s dominance, reshaping competition in the AI space. This move would also provide businesses with more flexibility in integrating AI-powered solutions into their operations. Both Microsoft and OpenAI have yet to respond to media inquiries regarding these developments, as reported by Reuters.
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