Microsoft is shifting its Copilot Cowork enterprise subscription to a pay-per-use model and testing a fine-tuned version of DeepSeek V4 as a cheaper alternative for running AI agents.
Charles Lamanna, Microsoft's vice president, revealed that internal tests showed Copilot Cowork couldn't sustain unlimited usage. Because agent tools call AI models frequently during tasks, some users were running hundreds of tasks per week, quickly pushing compute consumption beyond what standard plans could handle.
To lower operating costs, Microsoft plans to offer cheaper model options in the coming weeks. It's currently evaluating fine-tuned versions of DeepSeek V4 or other open-source models as supplements to the current flagship models from Anthropic and OpenAI.
If Microsoft goes ahead with DeepSeek, the new model will be an optional configuration hosted entirely on Azure. The company says this setup ensures enterprise data stays within Microsoft's cloud and meets Azure's security and compliance standards. Microsoft also fine-tuned the model to add bias-reduction safeguards. Still, adopting an AI model from a Chinese developer could expose Microsoft to scrutiny or compliance questions.