**Microsoft is Trying To Lessen Its Addiction To OpenAI as AI Costs Soar**

Microsoft's push to put artificial intelligence into its software has hinged almost entirely on OpenAI, the startup Microsoft funded in exchange for the right to use its cutting-edge technology. But as the costs of running advanced AI models rise, Microsoft researchers and product teams are working on a plan B. The Information: In recent weeks, Peter Lee, who oversees Microsoft's 1,500 researchers, directed many of them to develop conversational AI that may not perform as well as OpenAI's but that is smaller in size and costs far less to operate, according to a current employee and another person who recently left the company. Microsoft's product teams are already working on incorporating some of that Microsoft-made AI software, powered by large language models, in existing products, such as a chatbot within Bing search that is similar to OpenAI's ChatGPT, these people said.

\[...\] Microsoft's research group doesn't have illusions about developing a large AI like GPT-4. The team doesn't have the same computing resources as OpenAI, nor does it have armies of human reviewers to give feedback about how well their LLMs answer questions so engineers can improve them. Undeniably, OpenAI and other developers -- including Google and Anthropic, which on Monday received $4 billion from Amazon Web Services -- are firmly ahead of Microsoft when it comes to developing advanced LLMs. But Microsoft may be able to compete in a race to build AI models that mimic the quality of OpenAI software at a fraction of the cost, as Microsoft showed in June with the release of one in-house model it calls Orca.

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