Microsoft expands its 365 Copilot AI models to reduce reliance on OpenAI

Microsoft is pushing to diversify the artificial intelligence driving its flagship AI product, Microsoft 365 Copilot, by adding more in-house and third-party models, sources told Reuters. The move will help to reduce costs and lessen dependence on OpenAI, the AI startup that has been central to Microsoft’s AI strategy.

Launched in March 2023, 365 Copilot gained popularity for incorporating the OpenAI GPT-4 model. But Microsoft is now training much smaller in-house models, including Phi-4 small language model and customising open-weight models for efficiency and affordability of its AI assistant.