San Francisco: Microsoft has introduced its proprietary AI reasoning model, marking a significant step as the technology giant intensifies competition with rivals like OpenAI and Anthropic in the rapidly evolving artificial intelligence landscape.
The announcement was made by Chairman and CEO Satya Nadella at the company’s annual Build developer conference in San Francisco. Among several new initiatives unveiled, the highlight was the launch of MAI-Thinking-1, described as a mid-sized model with 35 billion active parameters and a 256K context window.
According to Kyle Daigle, Microsoft’s developer marketing chief and GitHub operating chief, the model delivers high efficiency and strong performance while maintaining a low token cost. “It’s a mid-sized, 35 billion active parameter model with a 256K context window built for high efficiency and performance, but importantly, at a low-token cost,” Daigle wrote in a blog post.
Microsoft emphasised that the new reasoning model has been developed with enterprise readiness in mind. The development comes amid heightened activity in the AI sector, as both Anthropic and OpenAI prepare for potential public listings. Anthropic has already filed confidentially for an IPO and is reportedly valued near a trillion dollars, while OpenAI is expected to follow with its own filing.
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Alongside MAI-Thinking-1, Microsoft introduced additional models under the MAI family. These include MAI-Image-2.5 and its flash variant, the company’s first models capable of handling both text-to-image and image-to-image tasks. Other additions comprise MAI Transcribe 1.5, offering state-of-the-art accuracy across 43 languages with streaming capabilities planned soon; MAI-Voice-2 and its flash variant, now supporting more than 15 additional languages with new voice options; and MAI-Code-1, an inference-efficient coding model optimised for GitHub and now available in Copilot and VS Code.
The announcements also signal a broader strategic shift towards autonomous AI agents, often referred to as agentic AI. Nadella showcased the Surface RTX Spark Dev Box, a powerful new development device powered by an Nvidia chip. This aligns with Nvidia’s recent unveiling of its N1X processor for Windows laptops, aimed at bringing advanced AI capabilities directly to personal computers.
Microsoft has stressed that its AI models are designed to assist people and organisations rather than replace them.