Microsoft has begun reducing its reliance on third-party AI models from OpenAI and Anthropic, instead deploying its own in-house MAI models to handle a portion of user prompts in Excel and Word, Bloomberg reported on July 7, 2026.
The company had previously advertised that large parts of Office 365 were powered by models from both OpenAI and Anthropic. While Microsoft still uses those third-party models, it has increasingly moved to build out its own AI capabilities. At its annual Build conference last month, Microsoft announced seven new MAI models, including an agentic coder and a text-to-image generator. When contacted for comment, Microsoft said it had nothing further to share.
The shift is driven by the rising cost of providing and purchasing AI services. After a period of heavy AI spending earlier in 2026, tech companies have broadly pulled back. Amazon, Uber, Meta, and Accenture have also reportedly taken steps to curb AI-related expenditures. The cost pressures have become significant enough that some companies are reportedly exploring Chinese AI models as a more affordable alternative for agentic solutions, though concerns about potential security issues have accompanied that trend.
Microsoft’s move suggests that even companies with deep ties to leading AI providers may find the economics of third-party models difficult to sustain at scale. By developing and deploying its own models for widely used productivity software, Microsoft may be positioning itself to better control long-term AI infrastructure costs — though the full extent and pace of that transition remains unclear.
Source: TechCrunch