Microsoft joins AI cost-cutting trend by relying more on its own models
Microsoft is the latest Silicon Valley giant to cut back on its AI spending.
Indeed, when it comes to two of its most widely used programs — Excel and Word — Microsoft has begun to use its homemade MAI models to respond to a certain percentage of user prompts, Bloomberg reported Tuesday. In the past, the company had advertised the fact that large parts of Office 365 are powered by models from both OpenAI and Anthropic. While Microsoft still relies on those third-party models, it has also increasingly sought to stand up its own AI agents. Last month, at its annual Build conference, the company announced the launch of seven new MAI models, including an agentic coder and a text-to-image generator. When reached for comment by TechCrunch, Microsoft said that it had nothing further to share. Microsoft’s apparent cutbacks are part of a broader trend. After a brief blitz of “tokenmaxxing” earlier this year, the last few months have seen a news cycle awash in stories about tech companies acting significantly more thrifty. Other large companies — like Amazon, Uber, Meta, and Accenture — have also reportedly made moves to curb spending. The immense cost of providing and buying AI services has become a controversial part of the industry. The sticker shock has gotten so bad in some parts of Silicon Valley that some companies are reportedly looking to Chinese models for more affordable agentic solutions — despite some concerns over potential security issues. Last chance to save up to $190 on TechCrunch Founder Summit. Join 1,000+ founders and VCs at all stages for real-world scaling insights and connections that move the needle.Savings end June 26, 11:59 p.m. PT. Every weekday and Sunday, you can get the best of TechCrunch’s coverage. TechCrunch Mobility is your destination for transportation news and insight.
