Microsoft is preparing to launch a new in-house artificial intelligence coding model next week at its annual Build developer conference in San Francisco, according to a report by The Information.
The new model is expected to strengthen the capabilities of GitHub Copilot, Microsoft’s AI-powered coding assistant, as competition intensifies in the rapidly evolving AI software development market.
The report said Microsoft is also developing additional AI models focused on transcription, reasoning, speech, and image generation as the tech giant accelerates efforts to reduce dependence on long-time partner OpenAI.
Reuters reported that Microsoft declined to comment on the development.
The move comes as Microsoft intensifies investment in its own AI ecosystem amid shifting dynamics in its partnership with OpenAI. Both companies have recently adjusted aspects of their collaboration in a bid to reduce mutual dependence.
Until now, Microsoft has relied heavily on AI models from OpenAI, Anthropic, and Google to power GitHub Copilot and other AI services.
Although GitHub Copilot enjoyed strong early adoption, newer competitors such as Anthropic’s Claude Code have gained traction among software developers, increasing pressure on Microsoft to strengthen its proprietary offerings.
Microsoft shares rose nearly 3 per cent following the report, reflecting renewed investor optimism over the company’s AI strategy.
The company is also reportedly exploring acquisitions of AI startups to expand its talent base and accelerate development of advanced proprietary AI systems. Reuters earlier reported that Microsoft aims to build a frontier-level AI model by next year.
The Build conference is expected to provide deeper insight into Microsoft’s evolving AI roadmap as competition with Google, Amazon, and emerging AI firms continues to intensify.
