Microsoft Eyes DeepSeek V4 for Copilot Cowork to Cut AI Costs
- Apple’s Native Linux Container Tool Has Arrived — But Can It Really Replace Docker?
- 60% of MD5 Password Hashes Can Be Cracked in Under an Hour with a Single GPU
- Dirty Frag: Root Access on Every Major Linux Distribution — No Patch, No Warning
- Proton Mail: Data Transferred to FBI Again!
- How Close Are Quantum Computers to Breaking RSA-2048?
- What is the best alternative to Microsoft Office?
Microsoft Eyes DeepSeek V4 for Copilot Cowork to Cut AI Costs
Microsoft is exploring a self-hosted, fine-tuned version of the Chinese open-source model DeepSeek V4 as a lower-cost option to power its enterprise AI agent Copilot Cowork — while simultaneously shifting the product to usage-based pricing.
The move, first reported by Axios on June 16, comes as agentic AI tools like Copilot Cowork, Anthropic’s Claude Code, and OpenAI’s Codex drive a phenomenon known as “tokenmaxxing” — where continuous model calls during complex tasks generate steep and unpredictable inference bills. Microsoft says it expects to announce its choice of lower-cost model within the coming weeks.
Currently, Copilot Cowork runs primarily on Anthropic’s models, with some versions compatible with OpenAI’s offerings. Both vendors have raised prices in recent years and moved away from earlier unlimited-use plans, putting cost pressure on Microsoft as it scales enterprise access.
“We have users who do hundreds of tasks a week, which is great — they’re way productive — but the consequence is the costs can go very high.” — Charles Lamanna, Microsoft EVP for Copilot, agents and platform
Key details
Microsoft says the DeepSeek option, if adopted, would be optional for enterprise customers, fully hosted on Azure, and covered by Azure’s enterprise compliance and data-residency controls. The company says it has also fine-tuned the model and added safeguards, including changes aimed at reducing bias.
The decision sits awkwardly alongside U.S. regulatory trends. The Trump administration has intensified scrutiny of foreign AI models and has previously discussed banning DeepSeek from the American market, accusing Chinese AI companies of stealing U.S.-trained models. Separately, U.S. regulators recently suspended access to Anthropic’s latest-generation models for foreign nationals, signaling a general tightening of cross-border AI technology flows.
The strategic backdrop is also notable. CEO Satya Nadella recently published a lengthy essay on X arguing that allowing a small number of AI companies to dominate advanced model capabilities would ultimately harm both the economy and society — a public signal that Microsoft intends to diversify its model relationships rather than remain reliant on any single supplier.
The shift to usage-based billing may prove the more lasting change. Microsoft is moving away from the flat per-user fee model that has governed enterprise software for decades, replacing it with metered pricing tied to compute consumed per task. That restructuring positions Copilot Cowork as a paid-by-the-task agent rather than a conventional software seat — a model that, if successful, could reshape how enterprise AI is packaged and sold industry-wide.
