Microsoft Pays Anthropic $2B Annually for Copilot While Steering Users Back to OpenAI Models

Microsoft is on track to pay Anthropic more than $2 billion annually to power Copilot, even as it increasingly redirects tasks to cheaper OpenAI models to protect profit margins. The arrangement reflects a dramatic reversal in Microsoft's AI strategy after internal pressure and customer complaints prompted leadership to diversify beyond OpenAI's models. In summer 2025, Charles Lamanna, the 38-year-old vice president leading Office and Copilot, convinced CEO Satya Nadella that Anthropic's Claude models outperformed OpenAI's offerings at specific tasks. Live demonstrations showed Claude excelled at automating financial calculations in Excel and generating well-formatted PowerPoint presentations—capabilities that customers had complained Copilot lacked.