Microsoft is reportedly plotting a future without OpenAI

Microsoft’s AI head is plotting a future without OpenAI. According to a report from The Information, Mustafa Suleyman, the head of Microsoft’s AI division, has set his sights on a bold objective: reducing the company’s dependence on OpenAI.

In a report titled ‘Microsoft’s AI Guru Plots a Future Without OpenAI,’ The Information reported:

“After setbacks, Microsoft’s AI guru Mustafa Suleyman appears to be making slow progress helping the company wean itself off OpenAI” 

Microsoft has poured over $13 billion into the AI firm since 2019, but now it wants more control over its own models and costs. Simple enough in theory—build in-house alternatives, cut expenses, and call the shots. But as a new report from The Information lays out, reality is a lot messier. Or as reporter Aaron Holmes put it, “easier said than done.”

“Last fall, during a video call with senior leaders at OpenAI and Microsoft, Suleyman—who leads Microsoft’s in-house artificial intelligence unit—wanted OpenAI staffers to explain how its latest model, o1, worked, according to someone present for the conversation and two other Microsoft employees who were briefed on it.”

The urgency behind this push became clear last fall during a high-stakes video call that had all the tension of a corporate power struggle. Suleyman and other Microsoft executives pressed OpenAI to reveal key technical details about its latest model, o1. This wasn’t just about curiosity. Since joining Microsoft in March 2024 after co-founding Inflection AI, Suleyman has been steering the company toward a future where its AI ambitions don’t rest on a single partner—no matter how cutting-edge that partner might be.

In a strategic move signaling its ambition in the AI space, Microsoft hired Suleyman a year ago, one of the brains behind Google DeepMind, to spearhead its newly formed consumer AI unit dubbed Microsoft AI

Why the Rush?

Money, for one. OpenAI’s models, including GPT-4, the backbone of Microsoft’s Copilot assistant, aren’t cheap to run. Keeping them live on Azure’s cloud infrastructure racks up significant costs, and Microsoft is eager to lower the bill with its own leaner alternatives.

Then there’s strategy. Posts circulating on X today suggest that Microsoft isn’t just looking to save money—it wants to develop AI reasoning models that can compete directly with OpenAI’s and potentially enter the market. The push for independence also gained steam after OpenAI’s near-meltdown in 2023, when CEO Sam Altman was briefly ousted. That episode made it clear how vulnerable Microsoft was to its partner’s internal chaos.

The Challenge: Breaking Free Won’t Happen Overnight

Microsoft and OpenAI are deeply intertwined. OpenAI’s technology is embedded in Microsoft products, from Copilot to Bing’s AI-powered search features and Microsoft 365’s productivity tools. A tweak in their partnership agreement this January allowed OpenAI to work with other cloud providers like Oracle, but Microsoft still holds exclusive rights to OpenAI’s models for its own products until 2030. That’s a long timeline to unravel.

Suleyman’s team has also been testing alternatives from companies like xAI, DeepSeek, and Meta, according to The Information. They’ve already started swapping out OpenAI models in Copilot where possible, but progress has been slow. The report mentions unspecified “setbacks,” which could mean anything from technical roadblocks to internal resistance.

This isn’t a new idea inside Microsoft. Back in December 2024, Reuters reported that the company had already begun integrating its in-house models, like Phi-4, into Microsoft 365 Copilot to speed things up and bring down costs. The partnership with OpenAI has been lucrative—Microsoft gets a share of the revenue—but it hasn’t been without strain. OpenAI’s projected $5 billion loss in 2024, flagged by The New York Times, only reinforced Microsoft’s desire to have its own AI playbook. Suleyman’s hiring was a clear sign of that shift.

What Happens Next?

The online chatter today reflects a mix of skepticism and intrigue. Holmes tweeted that Suleyman’s team is “actively” replacing OpenAI models in Copilot, while accounts like @LiveSquawk and @CHItraders on X are framing the situation as a battle between giants—except in this case, both sides have deep pockets. Some are questioning whether Microsoft can truly break free when OpenAI’s tech is so embedded in its ecosystem.

If Microsoft pulls this off, the benefits are obvious: cheaper, faster AI services and a chance to stake out its own ground in a competitive market. But between contractual obligations, technical dependencies, and OpenAI’s ongoing innovation, Suleyman’s mission is more of a long grind than a quick win. His team is making moves—one model swap at a time. Can Microsoft fully wean itself from OpenAI? That’s the billion-dollar question.

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