Microsoft starts replacing OpenAI and Anthropic models with its own MAI in Excel and Outlook

Microsoft has begun replacing OpenAI and Anthropic models with its own internally built MAI models inside Excel and Outlook to cut the cost of AI features, according to people familiar with the move. Tens of thousands of AI prompts a week in the two apps are now reportedly handled by Microsoft’s models rather than third-party ones.

The shift marks a turn in the AI economics of the most widely used office software. Microsoft has spent heavily on models from OpenAI and Anthropic to power its assistant features, and moving high-volume, routine tasks to cheaper in-house systems is a direct attempt to protect margins as usage scales.

Microsoft’s flagship reasoning model, MAI-Thinking-1, has about 35 billion active parameters and a 256,000-token context window. A version adapted for Excel work reportedly matched a frontier OpenAI model at up to 10 times lower cost, the sort of gap that makes swapping in a homegrown model attractive for repetitive spreadsheet and email tasks.

The rollout is narrow so far. MAI does not broadly replace OpenAI or Anthropic inside Microsoft Copilot, where those models still handle most production traffic. The performance and cost figures come from reporting rather than a published Microsoft benchmark, and the company has not confirmed the Excel and Outlook change in a dated first-party post, so the scale and pace of the swap remain unverified.

The move continues a broader push by large AI buyers to control model costs, first visible in enterprise cost-control efforts reported on July 2. How far Microsoft extends MAI beyond Excel and Outlook will show whether this is targeted cost trimming or the start of weaning Copilot off outside models.