Microsoft's expansion into more layers of the AI landscape will put pressure on OpenAI, Anthropic, and Google. It should also give developers more options and reduce how much it costs to use AI.
Microsoft announced seven in-house models during Build 2026, though some of them are variants of the same bases. The flagship model is MAI-Thinking-1, which is the company's first reasoning model.
MAI-Thinking-1 is built for efficiency and performance, but Microsoft emphasized the low token cost of the model in a blog post. The tech giant was eager to share that MAI-Thinking-1 matched Opus 4.6 on coding abilities.
With Microsoft owning the model and the cloud compute powering the experience, the tech giant can reduce costs to developers.
Here are all the new models from Microsoft:
- MAI-Thinking-1
- MAI-Code-1-Flash
- MAI-Image-2.5
- MAI-Image-2.5-Flash
- MAI-Transcribe-1.5
- MAI-Voice-2
- MAI-Voice-2-Flash
Microsoft's Mustafa Suleyman discussed the new models:
"All these models are built on a shared foundation, hill-climbing from the bottom with zero distillation. They share the same data discipline, the same infrastructure and the same evaluation framework. They are designed to work together, and to integrate directly into the products people use every day. But the models themselves are only part of the story."
A major differentiator is that Microsoft’s new models use zero distillation. Distillation is the process of training a smaller model to imitate a larger, preexisting one. It’s cheaper and faster than training a model from scratch, but it also limits the ceiling of the resulting model because the "student" can only ever match the behavior of its "teacher."
Microsoft stresses that its new models are “trained from scratch with zero distillation,” meaning they aren’t imitations of another system. They’re original architectures.
MAI-Image-2.5 and its flash variant are the first models from Microsoft capable of text-to-image and image-to-image workloads. Both new image models are rolling out to PowerPoint and OneDrive for Foundry (preview) users.
MAI models will be available on Fireworks AI, Baseten, and Open Router in the future.
Microsoft has invested in AI to the tune of billions of dollars over the last few years. Azure powers several of the most popular AI tools and Microsoft works closely with the biggest AI companies. But Microsoft now has its own in-house models.
Join us on Reddit at r/WindowsCentral to share your insights and discuss our latest news, reviews, and more.
