Microsoft is stepping up its artificial intelligence (AI) development to compete with OpenAI despite being a major investor in the company. Reports suggest that Microsoft is working on its own advanced AI models and exploring alternative technologies to power its Copilot assistant.
According to The Information, Microsoft has created AI “reasoning” models comparable to OpenAI’s o1 and o3-mini. However, tensions have risen between the two firms after OpenAI reportedly refused to share technical details about how o1 operates.
Microsoft’s new AI models and partnerships
Bloomberg reports that Microsoft has developed a family of AI models called MAI, which are designed to rival OpenAI’s technology. The tech giant is also considering offering these models through an API later this year, allowing businesses and developers to integrate them into their applications.
Alongside developing its models, Microsoft tests AI technologies from other companies, including xAI, Meta, Anthropic, and DeepSeek. These tests could lead to Microsoft replacing OpenAI’s models in Copilot, which is used across Windows and other Microsoft products.
Major investment and leadership shifts in AI strategy
Despite its growing competition with OpenAI, Microsoft remains a significant investor, having poured approximately US$14 billion into the AI firm. However, Microsoft has been making strategic hires to reduce its reliance on a single AI provider. One of its latest moves includes bringing Mustafa Suleyman, co-founder of DeepMind and Inflection, to lead its AI division.
As AI continues to evolve, Microsoft’s latest efforts signal a shift in its strategy. It ensures it remains a leader in the industry while keeping its options open for future AI development.
