Microsoft developing AI reasoning models to compete with OpenAI: Report

Microsoft is developing in-house artificial-intelligence reasoning models to compete with OpenAI and may sell them to developers, The Information reported on Friday.

The company has begun testing out models from xAI, Meta and DeepSeek as potential OpenAI replacements in Copilot, according to the report.

Microsoft and OpenAI did not immediately respond to Reuters' requests for comment.

Reuters reported exclusively in December that Microsoft has been working on adding internal and third-party AI models to power its flagship AI product Microsoft 365 Copilot, in a bid to diversify from the current underlying technology from OpenAI and reduce costs.