Microsoft no longer wants to borrow its AI, it wants to build it

Microsoft has been pushing AI on consumers whether they wanted it or not. Given the ferocity with which the company has been pushing AI into its products, you might be surprised to learn that it didn’t use its own AI. It took OpenAI’s technology, wrapped it into Copilot and Teams, and called it a day.

But things are changing. Whether the company noticed the public’s negative reaction to its bloated Windows 11 operating system or saw Linux gaining market share in gaming, Microsoft is finally working to introduce a calmer Windows 11 and focus on developing its own AI models.

As reported by Bloomberg, Mustafa Suleiman, CEO of Microsoft AI, made the ambition clear: “Certainly by 2027, the objective is to really get to state-of-the-art,” covering models that can handle text, images, and audio.

What was stopping Microsoft from doing this sooner?

A contract. Microsoft’s deal with OpenAI previously prevented the company from building its own broadly capable AI models. That clause was removed as part of a renegotiated agreement last year, giving Microsoft the freedom to operate independently.

The company isn’t starting from zero, either. In October, Microsoft began using a cluster of Nvidia GB200 chips to build the computing power needed for frontier-level AI development. Regarding the timeline, “we’re sort of ramping over the next sort of 12 to 18 months to get to frontier-scale compute,” Suleyman said.

What does this mean for you?

The first sign of this push is here. Microsoft has released a speech transcription model that outperforms rival products in 11 of the 25 most widely spoken languages. It’s built to handle noisy environments and will soon be rolling out to Teams and other Microsoft apps.

The bigger picture is that Microsoft wants long-term AI self-sufficiency. CEO Satya Nadella reinforced the message this week, emphasizing the importance of building state-of-the-art models over the next three to five years.

For everyday users, more competition in AI means better, smarter tools built into the apps you use. On the other hand, it also means another big company exponentially ramping up purchases of GPUs and RAM, which will drive prices for consumer RAM, GPUs, and SSDs even further.