Microsoft Replaces OpenAI Image Generation in PowerPoint and Bing with In-House Models
Alina Collins
Microsoft is swapping out OpenAI's image-generation technology in PowerPoint and Bing for its own MAI models, cutting running costs by roughly 85%. This means Microsoft is shifting from buying AI to building it — and OpenAI's real footprint inside Microsoft products is shrinking.
Why is Microsoft replacing its own partner's models?
Microsoft AI chief Mustafa Suleyman gave four reasons: faster, cheaper, higher quality, and better user retention.
The key number: MAI's running cost in PowerPoint is roughly 85% lower than OpenAI's model.
This means → even though Microsoft gets OpenAI's models for free under their partnership deal, the compute infrastructure to run them is still on Microsoft's tab. In plain terms = the model is free, the electricity bill is not — switching to an in-house model cuts that bill.
Why does image generation matter so much?
Suleyman noted that "generate an image" is the most common first AI command new users issue.
Users frequently create infographics and other visual content in PowerPoint, making image generation a high-frequency use case.
This means → first impressions drive retention. If a user's very first AI command delivers a poor experience, they are likely to drop off. Microsoft chose to swap in its own model here first — starting where the impact on user retention is greatest.
Text models are being replaced too — this isn't just about images?
Bloomberg previously reported that Microsoft has begun replacing OpenAI and Anthropic text models across its Office suite with MAI.
Microsoft says MAI matches OpenAI's GPT-5.6 on common Excel tasks, at lower cost.
MAI models now run in more than half of Microsoft's products and are being tested across all of them. Suleyman said: "This is very strong performance, and we will keep pushing hard."
What does this mean for OpenAI?
Microsoft also announced that T-Mobile and EasyJet have started using Microsoft's latest voice-generation AI model in their call centers — the in-house model footprint is expanding from text and images into voice.
This reflects a broader shift: Microsoft is moving from being OpenAI's "biggest customer" toward becoming OpenAI's "biggest competitor."
In plain terms = OpenAI's actual share inside Microsoft's product lineup is becoming the key metric to watch for the health of the partnership — the lower that share goes, the weaker OpenAI's bargaining position with Microsoft becomes.
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