Microsoft is dramatically expanding its artificial intelligence efforts, focusing on developing its own large-scale AI models and custom hardware. The tech giant outlined a new strategy that moves beyond sole reliance on its partner, OpenAI. This shift includes an $80 billion investment in AI-enabled data centers for fiscal year 2025.^[1] ### Building In-House AI Power Microsoft has formed a new internal division named the MAI Superintelligence Team, or MAIST. This team will spearhead the company's advanced AI research. Mustafa Suleyman, head of Microsoft AI and co-founder of DeepMind, leads this significant initiative. Karen Simonyan, a prominent AI researcher, serves as the team's chief scientist.^[2][3][4] The MAIST aims to build "humanist superintelligence." This means creating advanced AI systems designed to serve and assist people rather than replacing them. The focus is on developing specialist AI systems with strong safety measures. These systems will target areas like medical diagnostics, personal AI companions, and clean energy solutions.^{[5][6][2][3][4][7][8][9][10]} Microsoft's new roadmap signals a more competitive role in the AI field. The company plans to accelerate the development of its own core models and strengthen its in-house AI infrastructure. This also involves exploring new commercial and enterprise opportunities around these technologies.^[5] ### Custom Chips and Diverse Models To support its ambitious AI plans, Microsoft developed its own custom AI chips. These include the Azure Maia 100 AI Accelerator, designed for intensive AI workloads like generative AI, and the Azure Cobalt 100 CPU, an Arm-based processor for general cloud computing. Microsoft announced these chips in November 2023, and they became available in 2024.^{[11][12][13][14][15]} The Maia 100 chip is built to Microsoft's in-house specifications. It boasts 105 billion transistors and uses a 5-nanometer process technology, making it one of the largest chips possible with current technology.^[12][15] Microsoft shared designs for the Maia 100 with OpenAI to optimize it for large language workloads.^[11][12][14] The Cobalt 100 CPU is already powering services like Microsoft Teams and Azure SQL.^[15] Scott Guthrie, executive vice president of Microsoft's Cloud + AI Group, said the company is "reimagining every aspect of our data centers" to meet customer needs. He noted that optimizing and integrating every layer of the infrastructure stack helps maximize performance, diversify the supply chain, and offer customers more infrastructure choices.^[11] These custom chips are a critical part of owning the entire AI development pipeline, from hardware to software.^[1] Microsoft is also diversifying the AI models powering its Copilot ecosystem. As of August 2025, Copilot uses a combination of OpenAI models like GPT-5 and GPT-4o, along with models from Anthropic (Claude Sonnet 4, Claude Opus 4.1) and Google Gemini. These models are dynamically routed based on the task and service tier.^[16][17] This multi-model approach aims to reduce operational costs, improve performance, and give Microsoft more control over its AI capabilities.^[18] ### Strategic Investments and Future Vision Microsoft is making substantial financial commitments to its AI infrastructure. The company plans an $80 billion outlay on AI-enabled data centers for fiscal year 2025. Much of this investment will go towards U.S.-based infrastructure to support the training and deployment of AI models. This expansion includes server clusters that are six to ten times larger than those used for its MAI-1 preview model, a 500 billion-parameter model.^[1] This strategic shift aims to enhance Microsoft's cloud and productivity tools. It also comes amid increasing scrutiny from investors about the high costs of AI development across the industry.^[1] Satya Nadella, Microsoft's CEO, recently stated that the primary challenge for AI growth is now the availability of electrical power, not a shortage of computer chips. He noted that Microsoft currently has AI GPUs in inventory that it cannot use due to insufficient power.^[19][20] Nadella also acknowledged that the AI revolution could make some of Microsoft's biggest and most profitable businesses less relevant in the future. He emphasized the need for constant adaptation, stating that companies must build what is "secular in terms of the expectation, instead of being in love with whatever we've built in the past."^[21][22] Despite this, he expects Microsoft's headcount to grow in the future, with new hires benefiting from "AI leverage" to be more productive.^[23] Microsoft's updated agreement with OpenAI allows the tech giant to pursue artificial general intelligence (AGI) independently. Microsoft retains a significant 27% stake in OpenAI's newly formed public benefit corporation, an investment valued near $135 billion.^[4][24] While OpenAI has committed to spending $250 billion on Microsoft's Azure cloud services, it now has the flexibility to deploy its products on competing cloud platforms.^[25][24] Microsoft, however, maintains intellectual property rights over OpenAI's models and products through 2032.^[25][24] The company is also developing a multi-agent AI strategy. This focuses on interconnected AI systems with persistent memory. These systems are designed to collaborate on complex tasks and revolutionize enterprise workflows, moving beyond single-purpose AI tools.^[26] This comprehensive approach positions Microsoft to control more of the AI development pipeline, from core research and custom hardware to diverse models and enterprise applications.

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