Microsoft is reportedly preparing its engineering teams to accommodate Elon Musk’s Grok AI model within its infrastructure. Sources indicate that the tech giant has engaged in talks with xAI to enable hosting the Grok AI model, which would be accessible to clients and Microsoft’s internal product teams via the Azure cloud platform. This decision may spark controversy within the company, potentially straining its ongoing partnership with OpenAI.
If finalized, Grok will be integrated into Azure AI Foundry, Microsoft’s platform that provides developers access to AI services, tools, and pre-built models for creating AI applications. This integration would not only allow developers to leverage Grok in their apps but may also see Microsoft incorporating the AI model across its various services. Microsoft declined to comment on the matter.
Microsoft has been actively expanding its Azure AI Foundry offerings over the past year, quickly adopting models from various AI labs that compete with OpenAI. The company accelerated its engagement with DeepSeek, a Chinese startup that gained attention earlier this year for its inexpensive R1 model. The swift deployment of DeepSeek on Azure AI Foundry was notably rapid, with Microsoft CEO Satya Nadella aiming to expedite engineers’ testing and deployment of the system.
Nadella is reportedly eager for Microsoft to be recognized as a primary hosting provider for emerging AI models. The Azure AI teams are consistently tasked with onboarding new models and acquiring hardware to enhance their AI capabilities, contributing to Microsoft’s ongoing ambition to establish a dominant AI platform.
Asha Sharma, corporate vice president of Microsoft’s AI platform, stated in an interview with Technology News that all systems developed over the past 50 years need to be adapted for AI agents. She expressed that their vision for Azure AI Foundry is to evolve into the operating system that supports all AI agents in the background.
Integrating Grok into Azure is a strategic move for Microsoft as it seeks to solidify its position as a crucial platform supporting various AI models. However, not all AI labs are leaning toward Microsoft for their training needs. Musk’s xAI reportedly abandoned a potential $10 billion server deal with Oracle last year, announcing plans to train future models internally.
Details remain unclear about whether Microsoft will hold an exclusive hosting deal for Grok or if other competitors, such as Amazon, will also host the model. Microsoft appears to be focused on providing capacity for hosting Grok rather than offering servers for future model training.
The incorporation of Musk’s Grok AI model could stir further internal tensions, especially regarding his involvement with the controversial Department of Government Efficiency (DOGE) project. Musk is expected to scale back his role with DOGE this month, and an announcement regarding Grok’s availability on Azure might coincide with Microsoft’s Build developer conference slated for May 19th.
Hosting Grok could heighten existing strains in the partnership between Microsoft and OpenAI, particularly following a recent countersuit filed by OpenAI against Musk over claims of obstructive tactics. The ongoing dispute showcases the fallout from Musk’s departure from the AI lab he co-founded.
Moreover, reports suggest that Microsoft and OpenAI have faced challenges regarding model access and capacity requirements. Recent coverage indicates a growing rift between Nadella and OpenAI CEO Sam Altman, with claims that Nadella’s hiring of Mustafa Suleyman serves as a backup against OpenAI and Altman.
Suleyman’s team is reportedly working on AI models intended to rival those of OpenAI, although progress has not been significant. This has led Microsoft to continue to depend heavily on OpenAI for key features in its Office and Copilot products. Speculations also suggest that OpenAI’s anticipated GPT-5 model may not be released this month, following a series of scheduling uncertainties and capacity challenges.
By hosting Grok on Azure, Microsoft signals its readiness to diversify the AI models it supports. Currently, GitHub Copilot, under Microsoft ownership, already features models from Anthropic and Google alongside those from OpenAI. This move raises the possibility that Copilot may one day incorporate a wider selection of competing AI models, reinforcing Microsoft’s ambition to establish itself as a central hub for AI developers and users.
The pad:
- Microsoft launches Recall and AI-powered Windows search for Copilot Plus PCs. The long-awaited Recall feature, which captures screenshots of user activities on Copilot Plus PCs, is now launched alongside an enhanced AI-driven Windows search interface and a new Click to Do feature similar to Google’s Circle to Search.
- Microsoft is raising prices on Xbox consoles, controllers, and games worldwide. Effective immediately, the price of the Xbox Series S and X consoles will increase, with the Series S (512GB) rising from $299.99 to $379.99 and the Series X (1TB) going up from $499.99 to $599.99. Moreover, first-party Xbox game prices are expected to rise from $69.99 to $79.99 later this year.
- Windows 11’s voice typing will soon let you turn off the profanity filter. Users will soon have the option to disable the profanity filter for voice typing on Windows 11, allowing unrestricted use of swear words. Windows Insiders can currently test this feature in Dev and Beta Channel builds.
- Up to 30 percent of some Microsoft code is now written by AI. Nadella recently shared at Meta’s LlamaCon that approximately 20 to 30 percent of code in certain Microsoft projects is now generated by AI, suggesting a growing trend within the company’s code development.
- Microsoft reports strong cloud growth in Q3 earnings. Microsoft announced a strong quarterly performance with cloud revenue reaching $42.4 billion—an increase of 20 percent year over year—despite challenges related to tariff uncertainties and previously elevated inventory levels.
- The Maps app for Windows is disappearing soon. Microsoft plans to remove the Maps app from the Microsoft Store by July, rendering it nonfunctional following earlier unbundling with the 24H2 release of Windows 11.
- Microsoft Edge is getting security connectors for businesses. Microsoft is implementing a new security framework in its Edge browser that allows businesses to connect to authentication and data loss prevention services from various providers.
- Microsoft announces new European digital commitments. During a recent visit to Brussels, Microsoft President Brad Smith unveiled commitments focused on enhancing Europe’s digital resilience, including plans to challenge any governmental attempts to suspend its cloud operations.
- Towerborne arrives on Xbox. XBox players can now access Towerborne in Game Preview after a period of early access on Steam, indicating the game’s development in collaboration with Xbox Game Studios.
- Microsoft’s big AI hire can’t match OpenAI. Reports suggest Microsoft’s efforts to enhance Copilot for consumer engagement have been underwhelming, with user numbers stagnating despite pressures on the AI team to innovate and develop new models.
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