Microsoft works to add non-OpenAI models into 365 Copilot products, sources say

Microsoft has been working on adding internal and third-party AI models to power Microsoft 365 Copilot.

Microsoft has been working on adding internal and third-party artificial intelligence models to power its flagship AI product Microsoft 365 Copilot, in a bid to diversify from the current underlying technology from OpenAI and reduce costs, sources familiar with the effort told Reuters.

It is the latest effort by Microsoft, which is a major backer of OpenAI, to lessen its dependence on the AI startup - a departure from recent years when Microsoft touted its early access to OpenAI's models. When Microsoft announced 365 Copilot in March 2023, a major selling point was that it used OpenAI's GPT-4 model.

Microsoft is also seeking to reduce 365 Copilot's reliance on OpenAI due to concerns about cost and speed for enterprise users, according to the sources, who requested anonymity to discuss private matters.

A Microsoft spokesperson said OpenAI continues as the company's partner on frontier models, a term for the most advanced AI models available. The original agreement between the two companies allows the software giant to customize OpenAI’s models.

"We incorporate various models from OpenAI and Microsoft depending on the product and experience," Microsoft said in a statement. OpenAI declined to comment.

In addition to training its own smaller models including the latest Phi-4, Microsoft is also working to customize other open-weight models to make 365 Copilot faster and more efficient, the sources added.

The goal is to make it less expensive for Microsoft to run 365 Copilot, and potentially pass along those savings to the end customer, one of the sources said.