Microsoft reportedly plans to use models from Anthropic — OpenAI's biggest rival — to power AI features in Office 365 apps like Word, Excel, and PowerPoint, according to report by The Information. It's Microsoft's clearest signal yet that its once-cozy relationship with OpenAI isn't what it used to be.
Key Points:
- Microsoft is adding Anthropic’s Claude Sonnet 4 to Office 365 Copilot.
- Claude outperformed GPT on Excel automation and PowerPoint design.
- Microsoft will pay AWS to access Anthropic’s models, while OpenAI remains a core partner.
For the past two years, Copilot in Office has been powered almost entirely by OpenAI. Now, Microsoft says some of its most important productivity apps—Word, Excel, and PowerPoint—will start leaning on Anthropic’s Claude Sonnet 4 for more advanced tasks. According to people involved, Claude is better at crunching financial functions inside Excel and creating more polished slides in PowerPoint than OpenAI’s flagship GPT-5.
It’s a big signal. Microsoft has a deep, multibillion-dollar deal with OpenAI that gives it essentially free access to GPT models through Azure. But to run Anthropic’s tech, Microsoft is paying Amazon Web Services—its cloud rival and one of Anthropic’s biggest backers. That’s not just a technical choice, it’s a business one: Microsoft is willing to pay extra to get better performance.
The Big Picture
OpenAI is locked in tense negotiations with Microsoft over restructuring ahead of a possible IPO. So while Microsoft insists OpenAI remains its partner on “frontier models,” the addition of Anthropic looks both pragmatic and political.
Office 365 Copilot isn’t small potatoes—it’s used by over 100 million customers, and analysts peg revenue at more than $1 billion a year despite bugs that have frustrated early adopters. Bringing in Anthropic could help Microsoft fix those pain points and make Copilot worth the extra $30 per seat per month.
What We're Watching
This isn’t the first defection. GitHub Copilot already uses Anthropic for advanced “agent” features, and Microsoft has been testing Anthropic, xAI, and its own MAI-1 models as possible replacements in the consumer Copilot app. The pattern is clear: OpenAI may still be the backbone, but Microsoft wants redundancy—and leverage. Call it the portfolio approach to AI dominance.