❯ Microsoft’s Copilot now mixes models from several labs and is reportedly on track to pay Anthropic more than $2 billion a year

More than $2 billion a yearThe Information published a profile of Charles Lamanna, Microsoft’s new Office chief, on October 12. According to AI Weekly’s account, one source said Microsoft is on track to pay Anthropic more than $2 billion a year for models that power Copilot. The figure rests on a single source, and the report does not say whether the money buys per-use access, dedicated capacity or a longer-term commitment.

It started with customer complaintsThe report says customers had complained that Copilot was buggy and not good enough at automating work in Excel and PowerPoint. Lamanna persuaded CEO Satya Nadella to pay for Anthropic’s models despite internal concern about the higher cost. Anthropic’s models reportedly did better on advanced Excel financial functions and on building PowerPoint decks from instructions, and Microsoft now blends Claude with OpenAI technology in Word, Excel, Outlook and PowerPoint.

"The Costco of AI"In an official post, The Information says Lamanna wants Copilot to choose the cheapest model that can complete each task without sacrificing quality, so that more people can afford it. That means Copilot’s competitiveness is no longer tied to one model company, though each added supplier is another cost to account for. The profile also says several senior Microsoft executives see Lamanna as a possible successor to Nadella.

▮ SIGNALSoftware companies are starting to buy models the way they buy components, picking whichever is better or cheaper for each kind of task, and that loosens the hold any one model company has on a customer.