Microsoft is quietly routing some Excel and Outlook prompts to its own MAI models instead of OpenAI or Anthropic, aiming to cut the cost of running Copilot. The move builds a three-way AI hedge as MSFT trades near a 52-week low, down about 20% year-to-date.
Microsoft has started routing some Excel and Outlook prompts to MAI, its in-house model family, rather than to OpenAI or Anthropic, according to Bloomberg reporting cited by MarketBeat. Tens of thousands of prompts a week already run on Microsoft's own tech. That is still a small slice of total Copilot traffic, but the direction matters more than the current split.
The reason is margins. Copilot is a $30-per-seat subscription that, before the MAI launch, ran on top of someone else's expensive model by default. Every prompt costs Microsoft money to process, and across hundreds of millions of Office users that bill adds up fast. MAI does not need to beat every rival — it just needs to be good enough for everyday spreadsheet formulas and email drafts at a fraction of the cost.
Seven new MAI models
In June, Microsoft launched its proprietary models across select Office applications. At Build 2026 it unveiled seven MAI models, including its first reasoning model, MAI-Thinking-1, which the company says matches Anthropic's Claude Opus 4.6 on coding tasks. According to MarketBeat, AI chief Mustafa Suleyman framed the goal bluntly: "We pay a lot of money to Anthropic, so our goal is to reduce and ultimately eliminate that cost."
The shift is incremental, and Microsoft has not published any timeline for expanding it. Most Copilot workloads still run on outside models today. There is also a quality question: Microsoft's own materials frame MAI as matching prior-generation Anthropic models, not necessarily the current ones, so weaker features could cost more in goodwill than they save.
A three-way hedge
Microsoft now runs three AI lanes at once. It holds a stake in OpenAI, embeds Anthropic's Claude in Copilot, and leans on its own models where the economics make sense. Its discounted OpenAI deal is not set to expire until 2032, so a credible in-house alternative gives Microsoft leverage in any future renegotiation.
That leverage is growing sharper as the labs change shape. Anthropic filed confidentially for an IPO in June, and OpenAI is reportedly preparing a similar filing — meaning their biggest enterprise distribution partner is now also a competitor.
Where the stock sits
The backdrop is a bruised share price. MSFT hit a 52-week low in late June, and the 10% bounce off that level suggests investors are leaning into the value case after a fall of about 20% year-to-date.
At around 22 times forward earnings, the stock trades at a discount to the S&P 500 and to its own history, a valuation the bulls point to. The consensus price target of $559.84 sits about 45% above its recent level, and of 48 analysts tracked by MarketBeat, 41 rate MSFT a Buy and seven a Hold. Fresh support comes from the balance sheet: Microsoft reported revenue of $82.9 billion in Q3 2026, up 18.3% year-over-year.
Sources: MarketBeat, Quiver Quantitative
Trading involves risk.
Risk Disclaimer
