Microsoft reportedly plans to start using Anthropic’s Claude models to power some Copilot features in Office 365 applications, marking a potential shift away from its exclusive reliance on OpenAI technology. The move suggests growing tensions between Microsoft and OpenAI as the companies navigate disputes over OpenAI’s restructuring plans, while also highlighting Microsoft’s assessment that Claude 4 Sonnet outperforms competing models in specific use cases.
What you should know: Microsoft currently uses OpenAI’s technology to power most AI features in Word, Excel, Outlook, and PowerPoint, but plans to announce the integration of Anthropic models “in the coming weeks.”
• The company will access Claude Sonnet 4 through Amazon Web Services (AWS), Anthropic’s primary cloud provider, rather than directly from Anthropic.
• Copilot pricing will remain unchanged at $30 per user per month, despite Microsoft incurring additional costs to access Anthropic’s models through AWS.
• Microsoft can currently access OpenAI models at no additional cost as part of its investment partnership with the AI lab.
Why this matters: The decision signals a deepening rift between Microsoft and OpenAI, two companies that have been closely aligned since Microsoft became OpenAI’s largest investor and played a crucial role in Sam Altman’s reinstatement as CEO in 2023.
• Recent reports indicate growing tensions over OpenAI’s plans to restructure its for-profit division as a public benefit corporation.
• Microsoft’s willingness to pay additional costs for Anthropic models suggests the company is actively diversifying its AI partnerships rather than remaining dependent on a single provider.
Performance considerations: Microsoft believes Claude 4 Sonnet “performs better in subtle but important ways” than GPT-5, particularly in generating more aesthetically pleasing PowerPoint presentations.
• This assessment comes from testing an older Anthropic model that isn’t even the company’s flagship offering, suggesting potential for even greater performance advantages with newer versions.
• The specific improvements in presentation generation highlight how AI model performance can vary significantly across different use cases and applications.
What they’re saying: Microsoft denied that the move stems from conflict with OpenAI, with a company spokesperson stating: “As we’ve said, OpenAI will continue to be our partner on frontier models and we remain committed to our long-term partnership.”
• However, the decision likely represents unwelcome news for OpenAI, which stands to lose revenue from one of its most significant enterprise partnerships.
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