Tech giant Microsoft (MSFT) is looking to make significant changes to its Microsoft 365 Copilot by incorporating both internal and third-party AI models in order to reduce its reliance on OpenAI’s GPT-4, according to Reuters. The firm is looking to reduce operating costs and improve performance for enterprise users. While OpenAI remains a strategic partner, Microsoft is actively training its own model to boost speed and efficiency.
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This strategy is part of a broader trend within Microsoft’s business units. GitHub, which the company acquired in 2018, recently added AI models from Anthropic and Google as alternatives to OpenAI’s GPT-4. Similarly, the consumer chatbot Copilot now combines in-house models with OpenAI’s technology. By reducing Microsoft 365 Copilot’s dependence on OpenAI, the company hopes to lower costs and potentially pass those savings on to customers.
Despite these developments, Microsoft 365 Copilot has yet to prove its full value to enterprises. While adoption is growing—BNP Paribas Exane expects over 10 million paid users this year—concerns about pricing and utility remain. Gartner reported that most IT companies are still in the pilot phase with 365 Copilot. However, Microsoft remains optimistic and that 70% of Fortune 500 companies are already using the AI assistant.
Is MSFT Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 27 Buys and two Holds assigned in the last three months. After a 17% rally in its share price over the past 12 months, the average MSFT price target of $501.69 implies 15.24% upside potential.
