Microsoft Swaps Out OpenAI, Kills SMS Login for AI Security
Microsoft is rewiring itself for the AI era, on both offence and defence. This week, it took two significant steps that appear unrelated but are driven by the same force.
1. Substituting OpenAI Models with Microsoft’s Own
Microsoft is replacing OpenAI’s image models in its most-used apps like PowerPoint and Bing with its own technology, as reported by Bloomberg. Mustafa Suleyman, Microsoft’s AI chief, stated that the company’s MAI models run at approximately 85% lower cost than OpenAI’s.
2. Retiring SMS Login Due to AI-Powered Phishing
Starting September 1st, passkeys will become the default sign-in method for Microsoft’s business identity service, Entra ID. By February 1st, 2027, Microsoft will completely stop sending SMS and voice-call codes for authentication. This change is primarily due to AI making phishing emails much more convincing, with a 54% click-through rate compared to just 12% for conventional ones.
In summary:
These two moves reflect Microsoft’s dual strategy of reducing costs through in-house AI solutions while enhancing security measures against increasingly sophisticated AI-driven threats.