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The Tech Basic > News > Can Microsoft Succeed Without OpenAI? New AI Strategy Revealed
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Can Microsoft Succeed Without OpenAI? New AI Strategy Revealed

S.Dyema Zandria
Last updated: 10 March 2025 20:26
S.Dyema Zandria
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Image Source: Inside Telecom
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Microsoft, one of OpenAI’s biggest backers, is quietly working to depend less on the AI startup it once bet billions on. The tech giant’s AI chief, Mustafa Suleyman, is leading efforts to build homegrown AI models that could replace OpenAI’s tech in products like Copilot. Here is why and what it means for the future of AI.

Why Microsoft Wants Out

Microsoft has invested over $13 billion in OpenAI since 2019. But relying on another company’s tech comes with risks. Last year’s chaos at OpenAI, when CEO Sam Altman was briefly fired, showed Microsoft how shaky partnerships can be. Now, Microsoft wants control.

  1. High Costs

Running OpenAI’s models (like GPT-4) on Microsoft’s Azure cloud is expensive. Building cheaper in-house tools could save money.

  • Strategic Independence

Microsoft wants its own AI brainpower. Suleyman, who co-founded Google’s DeepMind, was hired in 2024 to lead this charge.

  • Fear of Falling Behind

OpenAI keeps innovating, but Microsoft doesn’t want to play second fiddle forever.

Microsoft AI
Image Sorce: The New York Times

The Rocky Road Ahead

Breaking up won’t be easy. OpenAI’s tech powers Microsoft’s Copilot, Bing AI search, and Office 365 tools. A 2030 contract gives Microsoft exclusive rights to OpenAI’s models, but Suleyman’s team is already testing replacements from companies like Meta and Elon Musk’s xAI.

Last fall, tensions flared during a video call where Microsoft pushed OpenAI to explain how its latest model, “o1,” worked. Insiders say Suleyman’s team wants technical secrets to build similar tools.

Small Wins, Big Challenges

Microsoft has started swapping OpenAI models in Copilot with its own, like Phi-4. But progress is slow. Technical issues and team conflicts seem to be responsible for reported delays according to known accounts.

According to The Information, the complete replacement of GPT-4 in Copilot demands starting from raw features to reconstruct them manually because it requires complex work. OpenAI’s models function extensively within Microsoft products. Untangling them could take years.

Microsoft AI
Image Source: The Guardian

What is Next for Microsoft and OpenAI?

If Microsoft succeeds, it could slash costs and lead the AI race on its own terms. But OpenAI isn’t standing still. Its models still set industry standards, and the partnership brings Microsoft revenue.

The tech world is watching closely. Can Microsoft truly go solo, or will it stay tied to OpenAI? For now, Suleyman’s team is taking it one AI model at a time.

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S.Dyema Zandria
By S.Dyema Zandria
View enlightening tech pieces written by S. Dyemazandria. Keep up with the most recent news, advice, and trends in the field of technology.

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