Microsoft seeks to pursue an open relationship with OpenAI

Microsoft and OpenAI have had something of a symbiotic relationship, with the former giving billions in capital to a startup AI lab and, in return, getting early access to cutting-edge models that are now built into the software suite of Microsoft productivity. The two companies were headed in divergent directions, however, and Reuters reported today that Microsoft is looking to add more models to its 365 Copilot product that are not built by OpenAI.

The reasoning, according to the report, is that Microsoft sees OpenAI’s flagship GPT-4 model as too expensive and not fast enough to satisfy its enterprise customers. Copilot 365 is an AI-powered assistant built into Microsoft’s suite of productivity applications including Word and PowerPoint. The tool is supposed to ingest all the data of a company and do a myriad of things, such as giving users the ability to quickly find information without having to hunt for disparate applications; quickly generate a list of the most profitable business units of the company; or instantly summarize meetings and emails.

Is it supposed to do these things, but customers and insiders are still underwhelmed by Copilot 365, which costs an extra $30 per month per user in a team. In a recent Business Insider historyMicrosoft employees speaking anonymously call the tools “terrible” and “gimmicky,” they don’t work well 75% of the time. On the customer, Business Insider cited a survey of 123 IT executives published by management consultancy Gartner, which found only four say Copilot provides significant value to their companies. It should be noted that some other stories have reported on companies that have found value in using major language models, such as simplify customer support.

Some customers who have spoken Business Insider specifically noted that 365 Copilot is too expensive.

OpenAI’s ChatGPT is a general, frontier model, which means it is trained on vast swathes of data and can be more expensive and slower to run; That’s why most models are offered in “lite” versions that make inference less intensive or “thinking”. Microsoft has formed its own in-house models, smaller ones like the one called Phi-4, and Reuters reports that sources speaking to the outlet said the company is looking to “customize other open weight models to make 365 Copilot faster and more efficient.”

In a sense, it makes sense that Microsoft would want to reduce its reliance on OpenAI. If the company is right and AI will be the next generational change in computing, relying on an independent company for core technology is not a great idea.

Microsoft has poured billions of dollars into OpenAI and will receive it 75% of their profits until he breaks even on his investment, and even then he still holds a large stake in the startup. In effect, the company has to hedge its bets — building its own internal models while holding a lottery ticket in OpenAI in case it continues on its current celestial trajectory.

Despite being the front-runner today, some skeptics of OpenAI say that we may not know a real winner in the AI ​​race (if these technologies are as revolutionary as we are told to believe). In the same way that there were numerous search engines that came online in the 90s, only to be quickly defeated when the late Google showed up. Microsoft is probably careful to cover it.