Microsoft (MSFT) Turns to In-House AI Models to Cut Costs and Reduce Reliance on Rivals

Microsoft Corp (NASDAQ:MSFT) is one of the best stocks to buy for the AI boom in the second half of 2026. Analysts see more than 47% upside potential in Microsoft stock from the current price. Microsoft is a huge favorite of elite investors, as it’s backed by 282 hedge funds.

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On July 7, Bloomberg reported that Microsoft has started replacing OpenAI and Anthropic models from some of its software products, including Outlook and Excel, in a bid to reduce its AI costs. The report stated that Microsoft is replacing the third-party models with its in-house model called MAI. Microsoft’s internal models are getting better at their job, and the company now feels it can reduce its reliance on outside providers and lower its AI usage costs.

In a June 4 report, Bloomberg quoted Microsoft’s AI executive, Mustafa Suleyman, as saying that the company was looking for alternatives as Anthropic has become extremely expensive.

Microsoft Corp (NASDAQ:MSFT) provides AI infrastructure through its Azure AI cloud platform. With this, it offers the computing power and resources required to train and run AI models. Microsoft also develops its own AI models for various applications.

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