Overview
- Microsoft disclosed Tuesday that it is testing a fine‑tuned version of DeepSeek V4 and other open‑source models as a lower‑cost engine for Copilot Cowork while moving the product to usage‑based pricing.
- The shift responds to soaring inference bills from heavy Copilot use, with Microsoft executives saying some customers run hundreds of automated tasks a week that drive up compute costs.
- Microsoft says any DeepSeek option would be optional for customers, hosted entirely on Azure, and modified with fine‑tuning and extra safeguards intended to reduce bias and protect customer data.
- The plan creates a policy tension because Microsoft co‑leads industry work to prevent alleged copying by Chinese labs and recent U.S. moves have restricted foreign access to advanced models, so the choice could draw regulatory or political scrutiny.
- If adopted, a cheaper DeepSeek tier would let Microsoft offer a budget Copilot while preserving expensive models for complex tasks, a change that could reshape customer costs, Microsoft margins, and partner dynamics over coming quarters.