OpenAI designates GPT-5.6 as 'preferred model' for Microsoft 365 Copilot following cost-cutting reports

OpenAI announced Thursday that GPT-5.6 will serve as the "preferred model" for Microsoft 365 Copilot, according to a company blog post published alongside the model's launch.

The designation means GPT-5.6 will power Microsoft's productivity suite including Word, Excel, PowerPoint, and Cowork. OpenAI stated in the blog post: "Our partnership with Microsoft has always been about bringing the benefits of advanced AI to more individuals and organizations, and we're excited to continue building on that shared commitment."

Timing follows cost-cutting reports

The announcement comes three days after Bloomberg reported that Microsoft is replacing some OpenAI software with its own in-house models, known as MAI, to reduce costs. According to that report, the MAI models are increasingly powering applications like Word and Excel.

OpenAI's announcement appears designed to counter speculation about the partnership's status, though the company did not clarify what "preferred model" means in concrete terms beyond continued integration.

Partnership status remains ambiguous

The "preferred model" designation does not necessarily contradict Bloomberg's reporting. Microsoft can simultaneously use GPT-5.6 for certain Copilot functions while deploying MAI models elsewhere in its product suite.

Neither OpenAI nor Microsoft has disclosed specific deployment ratios, pricing arrangements, or which features use which models. The companies have not publicly addressed whether Microsoft's use of MAI models represents a shift in the partnership structure established when Microsoft invested $13 billion in OpenAI.

What this means

The vague "preferred model" language suggests both companies are managing a complex transition. Microsoft has clear financial incentives to reduce dependence on costly third-party models, while OpenAI needs to maintain its largest commercial partnership. The ambiguous phrasing allows both companies to claim continued collaboration while Microsoft likely increases MAI deployment in cost-sensitive areas. Watch for more specific disclosures about which Microsoft products use which models—until then, the actual division of labor remains unclear.