Microsoft Shifts to In-house AI Models to Slash Costs
WHO:
TechCrunch - Microsoft is identified as a Silicon Valley giant.
Techmeme - Sources indicate that Microsoft is involved in the AI cost-cutting trend.
WHAT:
Windows Latest - Microsoft 365 Copilot adoption is under 5% after three years, with only 1% using it weekly.
Windows Latest - Microsoft has raised the price for the Microsoft 365 Copilot add-on to $30 per user per month for enterprise customers, while businesses under 300 seats now pay approximately $21.
Windows Latest - An internal memo from Copilot chief Jacob Andreou stated that Copilot has to “earn the right to exist.”
Windows Latest - Microsoft confirmed that Anthropic’s Claude models are now available inside Researcher and Copilot Studio, expanding to Copilot Chat and Copilot in Excel as well.
Windows Latest - Fewer than 4.5% of Microsoft 365’s 450 million customers pay for Copilot features, and only 1% use it weekly.
Windows Latest - An internal memo from Copilot chief Jacob Andreou stated that Copilot has to “earn the right to exist.”
Windows Latest - Enterprise customers pay $30 per user per month for the Microsoft 365 Copilot add-on, while businesses under 300 seats pay closer to $21.
Windows Latest - Only 20 to 30 percent of the users who pay for Copilot open it on a weekly basis.
TechCrunch - Microsoft is cutting back on its AI spending.
Techmeme - Microsoft is starting to replace AI models from OpenAI and Anthropic with its own MAI models in products like Excel and Outlook.
WHERE:
Techmeme - The changes are being implemented in software products such as Excel and Outlook.
WHY:
Techmeme - Microsoft is looking to reduce AI costs.
HOW:
Windows Latest - Microsoft has wired the AI into Word, Excel, Outlook, Teams, and the Windows 11 taskbar for its Copilot features.
Techmeme - Microsoft is replacing existing AI models with its own MAI models.
(UPDATED July 8, 2026 08:48 UTC)
Microsoft 365 Copilot adoption remains low, with less than 5% of users utilizing it after three years, and only 1% engaging with it on a weekly basis. In response to this, Microsoft has increased the price for the Copilot add-on to $30 per user per month for enterprise customers, while businesses with fewer than 300 seats will pay around $21. Additionally, an internal memo from Copilot chief Jacob Andreou emphasized that Copilot must "earn the right to exist," and Microsoft has confirmed that Anthropic’s Claude models are now integrated into Researcher and Copilot Studio, as well as expanding to Copilot Chat and Copilot in Excel.
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(UPDATED July 7, 2026 23:25 UTC)
Microsoft's Copilot features are seeing limited adoption, with fewer than 4.5% of the 450 million Microsoft 365 customers opting to pay for them, and only about 1% using the service weekly. According to an internal memo from Copilot chief Jacob Andreou, the service must “earn the right to exist,” as only 20 to 30 percent of paying users engage with it on a weekly basis. For enterprise customers, the cost is $30 per user per month for the Copilot add-on, while businesses with fewer than 300 seats pay around $21.
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(UPDATED July 7, 2026 21:28 UTC)
Microsoft, a prominent player in Silicon Valley, is making significant cuts to its AI spending as part of a broader trend in the tech industry. The company is set to replace existing AI models from OpenAI and Anthropic with its own MAI models in popular software products like Excel and Outlook. This shift aims to help Microsoft reduce costs associated with AI technology.