Link: Sources: Microsoft is working on adding more first- and third-party AI models to power 365 Copilot, to lower its reliance on OpenAI amid cost and speed concerns (Reuters)

Microsoft is diversifying its AI strategy for Microsoft 365 Copilot by incorporating internal and third-party models alongside OpenAI's technology. This shift aims to reduce dependency on OpenAI, partly due to cost and speed concerns for enterprise users.

As Microsoft's major partner, OpenAI continues to provide its cutting-edge models, although Microsoft now customizes these models to better meet its needs.

One strategic change includes the development and use of Microsoft's smaller, in-house models like Phi-4, enhancing the efficiency and speed of 365 Copilot.

The efficiency improvements and model diversification might reduce operating costs, potentially lowering prices for end users.

Despite these advancements, enterprise adoption of Microsoft 365 Copilot is still in the preliminary stages, with many companies not moving past pilot tests.

However, reports from BNP Paribas Exane highlight a pickup in adoption, projecting over 10 million paid users this year, indicating growing interest and potential success for Microsoft's AI integration in enterprise settings. #

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