Microsoft Plans Proprietary AI To Power Business Software And Reduce OpenAI Dependence: Report

Microsoft Corp MSFT is exploring the development of its own high-performance artificial intelligence platform model, Nikkei Asia cited CEO Satya Nadella on Thursday.

Nadella shared plans to build its capability to complement what it had been doing with OpenAI. Microsoft plans to offer such technology through its business software lest it adds value to customers.

Also Read: Microsoft Halts Expansion Plans, Yet Analysts Still Rank It Among Top Investment Picks

While Microsoft has been leveraging the OpenAI-developed generative AI ChatGPT technology, having its proprietary platform will make it easier to provide services optimized for its business software.

As of Thursday, OpenAI inched closer to finalizing a $40 billion funding round led by SoftBank Group Corp SFTBF SFTBY.

The deal could value OpenAI at $300 billion compared to its previous valuation of $157 billion in the October funding round.

SoftBank will commit an initial $7.5 billion to the company and $2.5 billion from an investor syndicate. The second tranche of $30 billion will include $22.5 billion from SoftBank and $7.5 billion from a syndicate.

Reportedly, OpenAI and Microsoft are facing tensions in their partnership due to financial strain and rising expenses at OpenAI. OpenAI requested Microsoft for additional funding and computing power, but Microsoft has been hesitant since OpenAI's leadership changes.

OpenAI expects to more than triple its revenue in 2025 to $12.7 billion versus $3.7 billion in 2024. Sales are expected to proliferate to $29.4 billion in 2026. Still, OpenAI doesn't expect a positive cash flow until 2029, when it projects revenue to top $125 billion.

A lot has been brewing in the AI space. The emergence of Chinese AI startup DeepSeek and claims of affordable AI models led to Nvidia Corp NVDA losing $600 billion in market cap in a single day. DeepSeek's AI model fueled a domestic price war, prompting Chinese Big Tech companies to roll out affordable AI models.

Price Action: MSFT stock is up 0.40% at $391.54 at the last check on Thursday.

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