Microsoft is diversifying its AI models in 365 Copilot to cut costs and improve performance. The shift includes using both in-house and third-party models.
Microsoft is taking steps to incorporate internal and third-party artificial intelligence products into its AI model, Microsoft 365 Copilot. According to a Reuters report, Microsoft is integrating its AI model to reduce its reliance on OpenAI, which will help to cut costs. The technology company will be using the amount at the customer end for a better experience.
Currently, Microsoft is using OpenAI but it plans to diversify to reduce operational costs. The company is taking these steps to reduce its reliance on OpenAi, which will help in improving and promoting its 365 Copilot. In 2023, Microsoft used OpenAI's GPT-4 model as the major pitch while launching its 365 Copilot.
Microsoft Expands AI Models in 365 Copilot
According to sources, Microsoft has been planning to reduce its dependence on OpenAI because of cost and speed concerns. Microsoft's spokesperson said, "OpenAI will continue to be our partner for frontier models, the advanced AI models." He also said that the agreement between both companies allows Microsoft to customize OpenAI's models.
Microsoft said, "We incorporate various models from OpenAI and Microsoft depending on the product and experience." Some sources also claimed that Microsoft is not only training its smaller AI models like Phi 4 but also working on open-weight models, which will make 365 Copilot AI faster and more efficient.
What's Ahead for Microsoft 365 Copilot AI?
Microsoft 365 Copilot, the AI tool embedded in Microsoft's software like Word and PowerPoint, is still working to prove its value to businesses. While Microsoft hasn't shared sales figures, a survey by Gartner revealed that most companies have yet to move beyond testing phases. However, analysts from BNP Paribas Exane predict rapid growth, with over 10 million paid users expected this year. Microsoft also announced that 70% of Fortune 500 companies are already using 365 Copilot.
Microsoft is following a trend seen across its business units by diversifying its use of AI models. For example, GitHub, which Microsoft bought in 2018, started using models from Anthropic and Google in October alongside OpenAI's GPT-4. Similarly, Copilot, Microsoft's consumer chatbot, now uses both OpenAI and its in-house models after being updated in October.
Microsoft Stock Update
In the recent trading session, Microsoft stocks closed at $435.25, marking a dip of -0.31% from the prior day. The stocks did not perform well compared to the S&P 500, which saw a daily gain of 0.73%. The Dow also saw a rise of 0.16% and the NASDAQ 100 saw a 0.98% increase.
Investors are eagerly awaiting Microsoft's upcoming earnings report, where analysts predict the company will report earnings of $3.14 per share.