After being exposed that Copilot is "slimming down," Microsoft is again rumored to be "self-reliant" for cost reduction: using its own AI to replace OpenAI and Anthropic models.

Recent reports indicate that in addition to a large-scale reorganization of its own AI assistant Copilot, Microsoft is also taking the "self-reliance" path: replacing third-party AI suppliers with self-developed models across multiple core products, simultaneously cutting costs and rebuilding market competitiveness.

According to a U.S. media report on Tuesday, Eastern Time, Microsoft has begun replacing models from OpenAI and Anthropic with its internally developed MAI model in key office apps such as Excel and Outlook, with tens of thousands of AI prompts processed weekly by the MAI model.

A few days ago, another U.S. media outlet learned that Microsoft Executive Vice President Jacob Andreou sent a memo to internal teams announcing the integration of consumer and enterprise versions of Copilot apps, eliminating inefficient features, with the goal of "earning the right to exist" in the eyes of customers.

The above measures reflect the dual pressures Microsoft currently faces: on one hand, reliance on external AI models brings high procurement costs; on the other hand, Copilot's market performance continues to face pressure. Microsoft's stock price has fallen nearly 20% year-to-date, ranking at the bottom of the "Magnificent Seven" (Mag 7), with some major shareholders having gradually reduced their holdings.

Accelerated penetration of self-developed models aims to reduce costs

This Tuesday, Bloomberg reported, citing an anonymous insider, that Excel and Outlook now process tens of thousands of AI prompts per week using the MAI model, whereas these apps previously relied more on models from OpenAI and Anthropic. A Microsoft spokesperson declined to comment on the news.

The scale of MAI model penetration into Microsoft's office products has never been publicly disclosed before. Although the MAI model still accounts for only a small portion of overall AI usage, this progress shows that Microsoft is achieving substantive breakthroughs in low-cost self-developed AI.

Mustafa Suleiman, head of Microsoft's AI model business, publicly stated in June that the company is "paying Anthropic a lot of money, with the goal of reducing and eventually eliminating this cost." Microsoft released seven new AI models at its developer conference in June, one of which is said to achieve code generation capabilities comparable to Anthropic's popular Opus 4.6 model at a lower cost.

Microsoft consumes massive amounts of tokens in AI computing. Currently, through a long-term partnership with OpenAI, Microsoft can still obtain a large amount of technical support at a discount, but this arrangement is not indefinite. Suleiman's team is working hard to build internal capabilities to avoid being passively subjected to external pricing in the future.

In addition to Excel and Outlook, the MAI model can now be invoked in the code assistance service GitHub Copilot. Suleiman also said that Microsoft's self-developed speech transcription model will be deployed in the Teams video conferencing app and other products in the coming months.

Copilot major integration: cutting ineffective features, betting on "super app"

According to a report by The Information on Thursday, November 2, Jacob Andreou announced in an internal memo of about 1,200 words that Microsoft will merge the consumer and enterprise versions of Copilot into a unified app, while integrating AI programming tools and a new generation of AI agents called AutoPilot. These AutoPilot agents are positioned as "always online," handling daily routine tasks on behalf of users. One agent, called Scout, can manage schedules and automatically organize inbox email summaries.

The reorganization plan also includes feature trimming. The report said that insiders revealed that Copilot Podcasts, which can automatically generate podcasts based on user-uploaded content, and Copilot Labs, an experimental feature platform for developers, will both be shut down, as neither gained widespread user recognition. Additionally, Andreou previously ordered the removal of some Copilot entry buttons appearing in Windows apps—data shows that most users clicked these buttons by mistake and closed them immediately.

The integrated new version of Copilot is planned to launch in August this year. In addition to basic features, premium features such as AI programming tools, AutoPilot agents, and Copilot Cowork will be available as paid add-on modules. Microsoft also announced the establishment of a $2.5 billion AI consulting division, Microsoft Frontier Company, which will deploy 6,000 industry and engineering experts to assist customers in implementing AI systems.

Copilot user growth accelerates, but gap with competitors remains large

Copilot's commercialization progress has recently improved. Microsoft disclosed in January that it had 15 million paid users, which grew 33% to 20 million by April. The product is priced at $30 per employee per month. Microsoft management said Copilot has helped boost revenue growth in the Office business in recent quarters.

However, compared to major competitors, the gap remains significant. ChatGPT currently has over 50 million paid subscribers; in terms of monthly active users, Sensor Tower estimates that Copilot has about 38.5 million, while ChatGPT has about 1 billion.

Andreou acknowledged in the memo that the overexpansion of Copilot features has caused user confusion and "become an embarrassing internal issue." He said that enterprise customers are increasingly scrutinizing the return on investment of AI, and "the bar is rising across the entire enterprise software space." Andreou also emphasized that Copilot should focus on "real work" and be "results-oriented," rather than "pursuing intelligence for the sake of intelligence."

Andreou joined Microsoft last spring and was promoted by CEO Satya Nadella earlier this year to lead the Copilot overhaul, with his responsibilities expanded to cover both consumer and enterprise product lines, as well as Bing, MSN, and Edge browser businesses, managing a team of over 11k employees. Nadella's evaluation metrics for him include Copilot's overall growth, user retention, and customer satisfaction.

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