Jay Parikh, executive vice president of CoreAI at Microsoft, speaks at a Siemens news conference at the Consumer Electronics Show in Las Vegas on Jan. 6, 2026.
Caroline Brehman | AFP | Getty Images
Microsoft is telling developers working on AI coding projects to rely on OpenAI’s top-tier model over rival products as part of an effort to maximize efficiency.
“Internally, shifting more workloads to OpenAI models helps us get greater value from our token investment,” Jay Parikh, executive vice president of Microsoft’s CoreAI engineering group, wrote this week in a memo to employees that was viewed by CNBC. Tokens measure the scale of AI processing, with one token equal to about three-quarters of a word.
While Microsoft has built its own artificial intelligence programming model and gives cloud customers access to over 11,000 models, including from Anthropic, the company wants staffers to take advantage of valuable intellectual property rights that come from the software giant’s early investment in OpenAI.
Parikh, whose group includes GitHub, Visual Studio and Visual Studio Code, told staffers to default to OpenAI’s flagship GPT-5.6 Sol when working in the GitHub Copilot coding tool, and use that model most of the time. OpenAI released GPT-5.6 Sol in July.
Efficiency in AI spending is becoming increasingly important across corporate America after a brief era of so-called tokenmaxxing, when developers were encouraged to run up large token bills without worrying about their output.
A slew of open-weight models, largely out of China, have gained popularity because they’re cheaper to access than the frontier models and allow users to tweak them and host their work on the infrastructure of their choice.
For the large hyperscalers, Wall Street is starting to demand more from their massive AI spending commitments, with capital expenditures from Microsoft, Amazon, Alphabet and Meta expected to top $700 billion collectively this year. Across the group, free cash flow dwindled in the latest quarter — and even went negative for Amazon and Alphabet. Microsoft’s cash generation fell by 23% from a year earlier, a mild decrease compared to its peers.
Microsoft’s stock rallied 22% last week on earnings, its strongest weekly performance since 1999. It’s still trailing most of the company’s megacap peers, with the stock now up about 1% for the year.
The CoreAI group will adjust defaults as models and products change, Parikh wrote. A Microsoft spokesperson said by email that the company periodically updates “the default model settings in our internal tools to balance performance and efficient use of resources.”
“We have set OpenAI’s GPT-5.6 Sol as the default for Microsoft’s internal use of GitHub Copilot while continuing to offer a range of model options that can be selected at any time by our engineers,” the spokesperson wrote.
The guidance comes nine months after OpenAI completed a corporate restructuring that included extending IP rights for Microsoft through 2032. Microsoft said in April it was ceasing revenue-sharing payments to OpenAI.
In the meantime, Microsoft has been tightening its relationship with Anthropic, agreeing to invest up to $5 billion in the company late last year and releasing the Copilot Cowork product containing its models. Anthropic committed to spend $30 billion on Microsoft Azure cloud services. But the companies haven’t made public assurances on intellectual property.
Microsoft CEO Satya Nadella has said companies can lower costs by separating AI services from models. For example, Anthropic’s Claude Code software development agent only provides access to Anthropic models, while GitHub Copilot offers models from Anthropic, Google, Moonshot AI, OpenAI, xAI and Microsoft itself.
With GitHub Copilot, Microsoft was early to instruct AI models to compose lines of code. Newer products such as Cursor took market share in the rapidly evolving market. Last week Microsoft said GitHub Copilot has 50 million users.
Parikh noted that while Microsoft divisions are managing AI token budgets, CoreAI has not yet established budgets for individual teams or employees. He encouraged each employee to find an example of AI spending that helped a customer or business outcome as well as one that did not.
“If you have a big idea or big project that will need significant token usage, have a quick chat with your manager,” Parikh wrote.
The Sources newsletter reported on the memo earlier.
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