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

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.

Why Microsoft went shopping outside the family

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.

The internal push came from Charles Lamanna, Microsoft’s Executive Vice President of Copilot. Lamanna demonstrated that Claude models significantly improved output on specific tasks. Those included financial automation in Excel and building presentations in PowerPoint.

The numbers behind the bet

Corporate Copilot users now number more than 30 million, a figure that has more than doubled since the beginning of 2026.

Microsoft now pairs Claude with OpenAI’s models across Word, Excel, Outlook, and PowerPoint.

Cost has been a recurring concern. Microsoft’s internal spending on Anthropic had reached roughly $1 billion on an annualized basis earlier in 2026. The company then cut that spending by more than 33%.

The main tool for managing that bill is an in-house model router. The router selects the most economical AI model for each task, sending a given request to whichever model can handle it at the lowest cost. According to the report, Microsoft is increasingly using OpenAI models through this setup to save costs and improve margins.

A complicated web of partners

Microsoft remains OpenAI’s largest partner. At the same time, Microsoft is now a major customer of Anthropic. Those include up to $5 billion from Microsoft to Anthropic and a $30 billion commitment tied to Azure services.

Lamanna’s role in this shift has raised his profile internally. Initial worries about the financial impact of Anthropic’s premium pricing did not stop him, and his advocacy has positioned him favorably with Microsoft’s senior leadership. The Information’s reporting noted speculation about his potential to one day succeed Satya Nadella as CEO.

What this means for Microsoft, OpenAI, and Anthropic

Microsoft has already shown it is willing to cut Anthropic spending sharply when costs run high, as the reduction of more than 33% earlier in 2026 demonstrated. The final figure will depend on how Copilot usage grows and how aggressively the router shifts work toward cheaper models.