Microsoft launches new AI reasoning model amid broader shift towards agentic AI

SAN FRANCISCO: Microsoft launched its own AI reasoning model as it prepares to compete with other proprietary models, such as those from OpenAI and Anthropic.

At its annual developer conference, Microsoft Build, in San Francisco, Chairman and CEO Microsoft Satya Nadella unveiled a number of initiatives, including the proprietary reasoning model MAI-Thinking-1.

“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,” Kyle Daigle, Microsoft’s developer marketing chief and GitHub operating chief, wrote in a blog post.

Introducing MAI-Thinking-1: our flagship reasoning model. pic.twitter.com/tdDY1NTm73

— Microsoft AI (@MicrosoftAI) June 2, 2026

Microsoft said that the model is built with enterprise readiness. The move comes at a time when the AI battle is heating up with Anthropic and OpenAI preparing to go public. Anthropic filed confidentially for an IPO and is valued close to a trillion dollars. OpenAI is expected to follow suit and file for an IPO.

The company also unveiled other models in the MAI family. MAI-Image-2.5 and its flash variant are Microsoft’s first models to serve both text-to-image and enabling image-to-image workloads, Daigle said.

The Microsoft executive introduced other new members of the MAI family. “The MAI Transcribe 1.5 combines state-of-the-art accuracy across 43 languages, with streaming coming soon. MAI-Voice-2 and its flash variant are now available in more than 15 additional languages with new voice options. And MAI-Code-1, our inference efficient coding model tuned for GitHub, is now available in Copilot and VS Code,” Daigle added.

Microsoft executives signalled a broader shift in company strategy, focusing on autonomous AI agents. Its chief, Satya Nadella, showcased Surface RTX Spark Dev Box, a new powerful computer that runs on an Nvidia chip.

Earlier, Nvidia had unveiled its most powerful PC chip N1X processor, that will power Windows laptops, marking its entry into the personal computing space. In partnership with Microsoft, the chip maker said that the new RTX Spark PC chip will bring AI directly to PCs.

The company said its models will serve people and organisations and not replace them. (ANI)