All is reportedly not right between Microsoft and ChatGPT maker OpenAI. According to a report by news agency Reuters, Microsoft is developing in-house artificial intelligence reasoning models to compete with OpenAI and may sell them to developers. The report quotes ‘The Information’, citing a person said to be involved in this initiative. Microsoft has reportedly started exploring alternatives to OpenAI’s technology in its Copilot product by testing models from xAI, Facebook parent Meta, and China DeepSeek.
Elon Musk too shared a post on the same. “Microsoft has begun cutting ties with OpenAI and is now testing models from xAI, Meta and DeepSeek for replacements in Co-pilot it’s so fucking over,” read the Twitter post shared by Elon Musk. The Twitter post also shared the headline of the Information report, Microsoft’s AI Guru wants Independence from OpenAI. That’s Easier Said Than Done.
Despite its early collaboration with OpenAI giving Microsoft a strong position in the competitive AI market among major tech firms, the company is now seeking to lessen its reliance on the ChatGPT creator. In December 2024, Reuters exclusively reported that Microsoft has been integrating both internal and external AI models into its flagship Microsoft 365 Copilot to diversify beyond OpenAI’s technology and cut costs.
Microsoft’s AI Czar may be the reason
When Microsoft introduced 365 Copilot in 2023, a key highlight was its use of OpenAI’s GPT-4 model. The Information report indicates that Microsoft’s AI division, under Mustafa Suleyman’s leadership, has finished developing a set of models known internally as MAI. These models perform almost as well as top models from OpenAI and Anthropic on standard benchmarks.
The division is also reportedly working on reasoning models that employ chain-of-thought methods—a process that provides answers with step-by-step reasoning for complex issues—which could directly challenge OpenAI’s models, according to the report.
Suleyman’s team has begun testing the replacement of OpenAI’s models with the much larger MAI models, compared to Microsoft’s earlier Phi models, in Copilot, the report noted. Microsoft is contemplating launching the MAI models as an application programming interface later this year, enabling external developers to incorporate them into their applications, per the report.
Neither Microsoft nor OpenAI immediately responded to Reuters’ requests for comment.