AI is changing the technology game so quickly that Microsoft CEO Satya Nadella can’t stop long-posting on Twitter.

Microsoft has been improving its AI prowess, and the company is beginning to use its homegrown AI models inside its own products.

And last week, Redmond detailed progress thereof. Two things matter: First, an internally built AI model “deployed in Excel is on par with GPT-5.6 for the most common tasks while being more cost-efficient,” the company states. I doubt it’s on par with GPT-5.6 Sol, but Microsoft probably doesn’t need to present pure frontier intelligence to the normies; they aren’t reading leaderboards anyway. And the cost point is critical; Microsoft wants to serve lots of AI to its customers without shipping all that revenue to its two portfolio companies, customers, vendors, and competitors, OpenAI and Anthropic.

See also: Microsoft is taking control of its AI future

Second, Microsoft’s MAI-Code-1-Flash model, which was “post-trained within the GitHub Copilot harness,” is being used by “millions of developers” since launch for “their day-to-day work, where it’s outperforming other similarly sized models while using fewer tokens.”

Apart from cost, how does it perform? Microsoft claims that it has an “approximately 10% higher code accept rate than GPT 5.4 Mini and Claude Haiku 4.5 in VS Code,” and slightly better user retention metrics compared to the same.

Is Microsoft suddenly flipping the AI tables? No. But it is proving that it can build AI models itself that work for its customers in production settings. Microsoft is also learning from a massive trove of enterprise coding and work data — you can’t leak to an AI lab when you are the AI lab. In theory, Microsoft should be able to quickly improve its model/harness/workflow combination thanks to that advantage, what it calls its ‘hill-climbing machine.’

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