Microsoft swaps OpenAI, Anthropic for its own AI in some apps

Microsoft ↗ 6.68% is starting to swap out AI models from OpenAI and Anthropic in some of its software products, replacing them with in-house alternatives as the company moves to cut AI costs, Bloomberg reported on Monday.bloomberg

The shift affects products including Excel and Outlook, where Microsoft's proprietary MAI models are now taking over tasks previously handled by third-party systems. The move marks a concrete step in what the company has framed as a broader push toward AI self-sufficiency, one that began taking shape publicly at Build 2026 in early June.

From Partner Models to In-House Alternatives

Microsoft unveiled a family of seven MAI models at its Build developer conference on June 2, built from scratch by its AI Superintelligence Team. The lineup includes MAI-Thinking-1, a reasoning model; MAI-Code-1-Flash for coding tasks; and models for image generation, voice, and transcription. The company positioned MAI-Thinking-1 at roughly 40 percent below comparable OpenAI pricing on Azure.geekwire+3

The company has invested $13 billion in OpenAI and $5 billion in Anthropic while making their models available through Azure. But as recently as March 2026, a reorganization shifted Microsoft AI CEO Mustafa Suleyman's focus toward creating the company's own models rather than relying on external partners.cnbc+1

AI Orchestration and Cost Strategy

The replacement strategy aligns with Microsoft's broader approach to model orchestration through its Foundry platform, which enables developers to route tasks to the cheapest or most capable model for a given job. Microsoft Foundry's documentation emphasizes "intelligent routing" — sending each task to the right model based on complexity and budget constraints.devblogs.microsoft

The timing adds pressure on OpenAI and Anthropic, both of which are reportedly preparing IPOs later in 2026 and have been engaged in price competition of their own. For enterprise customers, Microsoft's approach could serve as a cost-reduction lever, with one consulting firm reporting that model routing cut a client's monthly inference costs by 60 percent.facebook+2

A Multi-Model Future

Despite the shift, Microsoft has not abandoned third-party models entirely. As recently as April, the company introduced settings allowing Anthropic's Claude as a default model option in Microsoft 365 Copilot apps for certain regions, and those options remain available to administrators. The MAI models are being layered in where they can handle tasks at lower cost, rather than replacing external models across the board.learn.microsoft