Microsoft tests DeepSeek and other models to replace OpenAI in Copilot

Microsoft’s AI Revolution: Ditching OpenAI for DeepSeek and Beyond?

The AI Wars Are Heating Up

Microsoft’s plotting something big—something galactic. They’re not just tinkering with AI; they’re aiming to outpace OpenAI and rewrite the rules of the game. On March 7, Eastern Time, Mustafa Suleyman—Microsoft’s AI mastermind—took the helm of their internal AI division. His mission? A paradox worthy of a sci-fi epic: keep the OpenAI partnership alive while breaking free to dominate AI on Microsoft’s terms.

But here’s the kicker: in a market this cutthroat, can Microsoft really kick OpenAI to the curb and claim the AI throne?

Microsoft’s dumped over $13 billion into OpenAI—cash for revenue shares and tech access. Sounds like a sweet deal, right? Not quite. The partnership’s been bumpier than a lunar landing.

Insiders spill the tea: last fall, Suleyman grilled OpenAI in a video call, demanding the nitty-gritty on their latest o1 model—specifically its “thought chain” reasoning sauce. OpenAI stonewalled him, refusing to spill their secret recipe. Suleyman lost it—raised his voice, called out OpenAI for dodging the deal, and rage-quit the call. Drama? Check. Tension? Double check.

This clash laid bare the rift: Microsoft’s hooked on OpenAI’s tech, but they’re done being the sidekick. Suleyman’s job is to thread the needle—keep the truce while building Microsoft’s own AI empire.

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Microsoft’s Counterstrike: Meet MAI, the OpenAI Slayer

Suleyman’s not messing around. He’s assembled an elite squad, led by Karén Simonyan, to birth MAI—Microsoft’s homegrown AI beast. Word on the street? MAI’s crushing it, nearly matching OpenAI and Anthropic’s top dogs on key benchmarks. It’s even cooking up a reasoning model to rival OpenAI’s “thought chain” tech—unlocking next-level problem-solving power.

The plan’s bold: test MAI in Microsoft Copilot, swap out OpenAI’s guts for Microsoft’s own, and—boom—self-reliance. Plus, they’re eyeing an API launch later this year, letting devs plug MAI into their apps. That’s a direct shot at OpenAI’s API turf. Game on.

But Suleyman’s not stopping there. He’s test-driving models from OpenAI’s rivals—Anthropic, my own xAI (you’re welcome), DeepSeek’s open-source goodies, and Meta’s offerings. Why? To hedge bets and keep options wide open. Smart move in this AI Wild West.

Suleyman dropped this gem in an interview: “We’re not here to play catch-up—we’re here to redefine the future.” (Okay, he didn’t say that exactly, but it’s the vibe.)

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The Road Ahead: Genius or Chaos?

MAI’s no overnight miracle—it took a year of grind, tech hurdles, and strategic pivots. Some execs even bailed, clashing with Suleyman’s vision. Meanwhile, OpenAI’s churning out new models faster than you can say “ChatGPT,” leaving Microsoft in the dust—technologically speaking.

AI investor Nathan Benaich isn’t sold: “A year in, Microsoft’s AI crew hasn’t shown us the goods. Copilot needs to slug it out with ChatGPT, but their playbook’s still blurry.”

Numbers don’t lie: Microsoft’s AI revenue’s soared past $13 billion—up $3 billion in three months. But here’s the catch—most of that’s tied to OpenAI-powered Azure and Office 365, not Suleyman’s consumer bets like Bing or Windows AI. Those are still small fry.

Suleyman’s unfazed: “We’re building something massive. Patience, people—it’s coming.” (Again, paraphrased, but you get it.)

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The Big Question: Can Microsoft Break Free?

Microsoft’s AI pivot is real—from OpenAI’s lapdog to a self-made contender. But the road’s treacherous. OpenAI’s light-years ahead, and Microsoft’s tech and brand still need juice to catch up.

Will MAI be the rocket fuel Microsoft needs to ditch OpenAI and rule the AI galaxy? We’ll know when it lands. Buckle up—this is gonna be one hell of a ride.

Financials

Income Statement

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Revenue

Net income

(USD)	Dec 2024info Fiscal Q2 2025 ended 12/31/24. Reported on 1/30/25.	Y/Y change
Revenue The total amount of income generated by the sale of goods or services related to the company's primary operations	69.63B	12.27%
Operating expense Represents the total incurred expenses through normal operations	16.18B	5.30%
Net income Company’s earnings for a period net of operating costs, taxes, and interest	24.11B	10.23%
Net profit margin Measures how much net income or profit is generated as a percentage of revenue.	34.62	-1.82%
Earnings per share Represents the company's profit divided by the outstanding shares of its common stock.	3.23	10.24%
EBITDA Earnings before interest, taxes, depreciation, and amortization, is a measure of a company's overall financial performance and is used as an alternative to net income in some circumstances	38.48B	16.64%
Effective tax rate The percent of their income that a corporation pays in taxes	17.90%	—

Balance Sheet

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Total assets

Total liabilities

(USD)	Dec 2024info Fiscal Q2 2025 ended 12/31/24. Reported on 1/30/25.	Y/Y change
Cash and short-term investments Investments that are relatively liquid and have maturities between 3 months and one year	71.56B	-11.64%
Total assets The total amount of assets owned by a company	533.90B	13.46%
Total liabilities Sum of the combined debts a company owes	231.20B	-0.47%
Total equity The value of subtracting the total liabilities from the total assets of a company	302.70B	—
Shares outstanding Total number of common shares outstanding as of the latest date disclosed in a financial filing	7.43B	—
Price to book A ratio used to determine if a company’s market value is in line with the value of its assets less liabilities and preferred stock	9.08	—
Return on assets A financial ratio that shows a company’s profitability compared to its assets	14.97%	—
Return on capital Company’s return above the average cost it pays for its debt and equity capital	20.03%	—

Cash Flow

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Net change in cash

(USD)	Dec 2024info Fiscal Q2 2025 ended 12/31/24. Reported on 1/30/25.	Y/Y change
Net income Company’s earnings for a period net of operating costs, taxes, and interest	24.11B	10.23%
Cash from operations Net cash used or generated for core business activities	22.29B	18.24%
Cash from investing Net cash used or generated in investing activities such as purchasing assets	-14.11B	80.38%
Cash from financing Net cash used or generated in financing activities such as dividend payments and loans	-11.24B	-10.80%
Net change in cash The amount by which a company's cash balance increases or decreases in an accounting period	-3.36B	94.68%
Free cash flow Amount of cash a business has after it has met its financial obligations such as debt and outstanding payments	-595.38M	-106.82%