Microsoft plans to pay Anthropic over $2B a year to keep Copilot competitive

Claude models now power key Copilot tasks in Office, while a model router leans on OpenAI to protect margins Microsoft is preparing to write Anthropic some very large checks. According to a report from The Information on October 12, 2026, the company plans to pay Anthropic more than $2 billion annually to use its Claude AI models inside Copilot. Copilot had a performance problem. Microsoft faced significant pressure from clients over the assistant’s subpar results, particularly inside Microsoft Office applications. Microsoft responded by bringing Anthropic’s models into Copilot in the summer of 2025. That marked a clear break from the company’s earlier preference for OpenAI models. Under their substantial partnership, Microsoft could previously access those models at no additional cost.

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