LATEST: Microsoft is starting to replace OpenAI and Anthropic with its own MAI models in products like Excel and Outlook as it looks to cut AI costs.

What happened

Microsoft began swapping OpenAI and Anthropic AI services for its own Microsoft AI (MAI) models in products such as Excel and Outlook to lower its AI spending.

Confirmed

Global impact / market context

Switching to internal AI models can reduce Microsoft’s licensing expenses, improve profit margins, and give it more control over AI features, which may influence its competitive position in the enterprise software market.

Confirmed

Microsoft is a major cloud and software provider that has been paying large fees to external AI developers. Reducing those fees can improve its profit margins and affect the broader AI services market.

Confirmed

What to watch

1. How quickly Microsoft can scale MAI models to match the performance of OpenAI and Anthropic, which will determine whether customers stay satisfied with the new features. Analyst inference
2. Whether other large tech firms will follow Microsoft’s cost‑cutting path by building in‑house AI, potentially reshaping AI vendor competition. Proposed
3. The impact on Microsoft’s cloud revenue if lower‑cost MAI models attract more enterprise users to Azure, boosting spending on its infrastructure services. Analyst inference

Evidence

• x.com