Microsoft Cuts AI Costs by Using Own Models

Microsoft is quietly shifting away from expensive third-party AI models from OpenAI and Anthropic, opting instead to deploy its homemade MAI models for features in Excel and Word. This move is a clear cost-savings strategy as AI expenses skyrocket across the tech industry. While Microsoft once heavily promoted its use of OpenAI and Anthropic tech in Office 365, it now handles a percentage of user prompts with its own models. At its Build conference, Microsoft even launched seven new MAI models, including an agentic coder and text-to-image generator. This trend isn’t isolated—Amazon, Uber, Meta, and Accenture are also tightening their AI budgets. The high price of AI services has become a hot-button issue, with some companies even turning to Chinese models for cheaper alternatives, despite security concerns. Why it matters: Microsoft’s pivot signals that even the biggest players are feeling the pinch of AI’s soaring costs, potentially reshaping how the industry approaches model development and deployment.