Microsoft Replaces Third-Party AI With In-House Models in Excel and Outlook
On July 9 at 1:00 PM, Microsoft announced it would integrate its proprietary MAI series AI models into Excel and Outlook. The move came after rising expenses associated with external providers like OpenAI and Anthropic. The company unveiled seven new models, including MAI-Thinking-1, which features 35 billion active parameters and supports a context window of up to 256,000 tokens.
Every week, the MAI models handle tens of thousands of queries across Excel and Outlook. In internal blind tests, MAI-Thinking-1 matched the coding performance of Anthropic's Claude Opus 4.6. Microsoft also released models for image generation, speech recognition, voice processing, and programming.
“Anthropic remains a very expensive supplier”
Mustafa Suleyman, CEO of Microsoft AI
Pricing data confirms the cost disparity:
- DeepSeek V4-Pro: $0.435 per million input tokens and $0.87 per million output tokens.
- Anthropic Fable 5: $10 per million input tokens and $50 per million output tokens.
- GPT-5.5 via OpenAI API: $5 per million input tokens and $30 per million output tokens.
Microsoft benefits from discounts tied to its partnership with OpenAI, which runs through 2032. This shift underscores the company's drive to cut reliance on third-party technology while boosting the efficiency of its own AI solutions.
Benefits of Adopting Proprietary Models
By deploying its own AI models, Microsoft aims to lower licensing costs and gain greater independence in technology development. This strategy also strengthens its competitive edge in the software market, where companies are constantly seeking ways to improve product performance. With demand for AI-powered tools on the rise, these new models could help Microsoft better serve user needs and solidify its market position.
As Microsoft continues to enhance its AI capabilities, the establishment of a new AI division with a substantial budget highlights its commitment to innovation. This strategic move not only aims to reduce costs but also positions the company to lead in the competitive landscape of artificial intelligence. For more insights into Microsoft's ambitious plans and budget allocation, check out this article on Microsoft's new AI division.