Microsoft Corp. MSFT is planning significant investments in proprietary artificial intelligence chip infrastructure to achieve “self-sufficiency in AI,” according to leaked comments from AI CEO Mustafa Suleyman during an internal town hall meeting on Thursday.

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The Redmond-based tech giant is moving to reduce reliance on its $13 billion OpenAI partnership amid ongoing contract renegotiations. Suleyman told employees the company must “be self sufficient in AI” given its business diversity and scale, reported Business Insider.

“We should have the capacity to build world class frontier models in-house of all sizes, but we should be very pragmatic and use other models where we need to,” Suleyman stated during the meeting.

Microsoft’s strategy now encompasses open-source models, third-party partnerships, and internal development. The company recently began integrating Amazon.com Inc. AMZN-backed Anthropic‘s Claude AI into Office 365 applications after testing showed superior performance in Excel financial functions and PowerPoint slide generation.

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Suleyman revealed Microsoft’s MAI-1-preview foundation model was trained on just 15,000 Nvidia Corp. NVDA H100 chips—a “tiny cluster” compared to competitors. Models from Alphabet Inc. GOOGL GOOG, Meta Platforms Inc. META and Elon Musk‘s xAI used clusters six to 10 times larger.

MAI-1-preview currently ranks 24th on LMArena’s text model leaderboard, indicating substantial development needs. The planned chip investments aim to close this infrastructure gap and support in-house model development.

CEO Satya Nadella reassured employees about continued OpenAI collaboration during the town hall. “We have a very good partnership with OpenAI… they’re each other’s customers,” Nadella said, emphasizing the mutual commercial relationship.

Microsoft and OpenAI signed a non-binding agreement Thursday to restructure their partnership terms. The deal could enable OpenAI’s conversion to a for-profit entity while maintaining Microsoft’s access to advanced models. OpenAI is pursuing a $500 billion valuation through secondary stock sales, up from $300 billion earlier this year.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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