Microsoft has unveiled its first in-house developed artificial intelligence (AI) models, signaling a head-on challenge to OpenAI and Anthropic, the two leading AI model developers it had previously supported. Microsoft also preemptively introduced an AI agent capable of running around the clock, putting itself ahead in the race to popularize agents among major AI companies.
At its annual developer conference "Build," held Tuesday at Fort Mason Center in San Francisco, Microsoft unveiled seven proprietary models, including the reasoning AI model "MAI-Thinking-1."
MAI-Thinking-1 is a mid-sized reasoning model with 35 billion active parameters that Microsoft trained from scratch on its own data. The company said the model received higher evaluations than "Claude Sonnet 4.6" and scored similarly to "Claude Opus 4.6" on "SWE Bench Pro," a benchmark that measures coding capabilities. Opus is positioned above Sonnet in Anthropic's lineup.
Mustafa Suleyman, CEO of Microsoft AI and a co-founder of DeepMind who is leading the company's AI model development, said the model consumes fewer tokens, with cost efficiency up to 10 times higher than GPT-5.5. In an interview with the Financial Times, he stressed that Microsoft has "closed the gap with Anthropic in just six months."
Microsoft also unveiled "MAI-Code-1," a coding model aimed at enterprise customers and developers. The coding market is growing rapidly as "vibe coding" — generating code through natural language commands — gains popularity. With coding becoming accessible not only to developers but also to people without technical expertise, developers including Anthropic and OpenAI have been aggressive in building coding tools, and Microsoft has now thrown down the gauntlet. Microsoft highlighted that, given its proprietary "Maia 200" chip and its own cloud platform (Azure), customers can also reduce token usage by leveraging its reasoning model and coding tools.
Microsoft also showcased "MAI-Image-2.5," an upgraded version of the image generation model it released in April. The company said the image model scored higher than Google's competing model "Nano Banana Pro."
The moves mark Microsoft's transformation from an enterprise AI platform company into a provider that directly serves its own AI models. Microsoft is a key investor in OpenAI and its second-largest shareholder, but it signaled a shift to a competitive footing in April when it agreed with OpenAI to convert its previously exclusive AI model usage rights into a non-exclusive license. Microsoft also participated in Anthropic's large funding rounds, playing the role of backer, but with overlapping business models, competition has become inevitable.
Microsoft also unveiled "Scout," an AI agent that runs 24 hours a day. Scout was built on OpenClo, an open-source agent platform. It can be used in various ways for corporate operations, such as having the agent ask the organizer to reschedule when meeting times overlap, or having sales staff direct questions to the agent instead of a manager.
OpenClo, created by Austrian developer Peter Steinberger, generated a sensation after it was released in January this year on GitHub, the developer-sharing website. As an open-source platform, OpenClo allows ordinary people to easily run agents. In February, Microsoft CEO Satya Nadella disparaged OpenClo by comparing it to a "virus" because of its security vulnerabilities, but as its popularity surged, Microsoft set up a dedicated development team to seize the lead in the personal agent market.
Microsoft also unveiled the "Surface RTX Spark Dev Box," a computer to be released in collaboration with Nvidia. A day earlier, at "GTC Taipei" in Taiwan, Nvidia unveiled its first AI PC chip, "N1 X," and announced it was joining hands with Microsoft to enter the AI laptop market. The Surface RTX Spark Dev Box is another product the two companies will release together, following AI laptops. It is a compact developer computer equipped with an Nvidia chip and built on Microsoft's Windows platform. Nadella called the product a "dream machine" and said he expects it to make waves.
