Report: Microsoft Considering AI Models to Replace OpenAI’s in Copilot

Microsoft is reportedly testing artificial intelligence (AI) models from other companies that could replace OpenAI’s models in Copilot.

The tech giant is also training models that could compete directly with OpenAI’s, both for use in Copilot and for sale to outside developers who could add them to their own apps, Reuters reported Friday (March 7), citing a paywalled article from The Information that cited unnamed sources.

Microsoft has completed training of a family of models that perform nearly as well as OpenAI’s leading models on commonly accepted benchmarks, according to the report.

Reached by PYMNTS, a Microsoft spokesperson said in an emailed statement: “As we’ve said, we are using a mix of models, which includes models from Open AI as part of our partnership, as well as Microsoft AI and open-source models.”

Reuters reported in December that Microsoft was considering powering Copilot with in-house and third-party models, according to the report.

Microsoft is a major backer of OpenAI and benefited from its early partnership with the company but has been looking to diversify its technology and reduce its costs, the report said.

It was reported in August that Microsoft added OpenAI to its list of competitors in its fiscal 2024 report. Microsoft counts OpenAI among its competitors in the search and news advertising fields, along with Google and various social media platforms.

While the relationship between the two firms has been critical — with Microsoft turning to OpenAI for help in building AI systems, while also giving the small company financial backing to the tune of $13 billion — the companies’ desire to tap a greater share of the AI market put them at odds.

Microsoft disclosed in a January blog post that it would no longer be OpenAI’s exclusive cloud provider for its AI models, and instead would have the right of first refusal to host OpenAI’s AI workloads in Azure.

This marked a change in their 2019 agreement, when Microsoft became OpenAI’s exclusive cloud provider after investing $1 billion in OpenAI, PYMNTS reported at the time of the blog post. The investment was also three years before ChatGPT and generative AI took the world by storm.

At the same time, the blog post said Microsoft would retain the exclusive rights to OpenAI’s application programming interface (API), which is how most companies access and integrate the startup’s AI models into their own applications, products or services.