Microsoft is stepping up its artificial intelligence (AI) work, aiming to become less dependent on OpenAI and possibly compete with it directly.
Reports from The Information, Trend and Bloomberg reveal that Microsoft has been building its own powerful AI models while also trying out AI systems from other companies.
This is a major move, considering Microsoft has already invested around $14 billion into OpenAI and uses OpenAI’s technology in many of its products, including the Copilot AI assistant in Microsoft 365 apps like Word and Excel.
Microsoft Is Building Its Own AI
Sources say Microsoft has developed new AI models that are similar in ability to OpenAI’s internal models, such as o1 and o3-mini. Microsoft reportedly asked OpenAI for more technical details about how those models work — but was turned down. That refusal may have pushed Microsoft to focus more on building its own tools.
One of Microsoft’s internal AI projects is a model series called MAI, which could be as powerful as OpenAI’s current models. The company is considering offering MAI to other developers and businesses through an API (application programming interface) later this year.
At the same time, Microsoft is also testing AI models from xAI (Elon Musk’s AI startup), Meta, Anthropic, and DeepSeek as possible options to replace OpenAI’s models in some products.
Big Names Behind the Push
To lead its growing AI division, Microsoft has hired Mustafa Suleyman, co-founder of DeepMind and Inflection AI. Suleyman is a well-known name in the AI world and is expected to help Microsoft compete at the highest level.
With a strong cloud platform (Azure), huge resources, and deep integration into business software, Microsoft is in a good position to become a major AI player, not just a partner or customer of OpenAI.
Although Microsoft and OpenAI are still working together for now, Microsoft’s recent moves suggest it may be preparing to go its own way. If Microsoft turns Copilot into a broader, more advanced tool — perhaps similar to ChatGPT — OpenAI could face real competition from its biggest partner.
