Most businesses don't have the GPUs, or the knowledge necessary to do self-hosted inference. So, they'd have to rely on OpenRouter, or Ollama, or some other inference provider, but there are lots of problems with that. With Microsoft, people could get comfortable with the compliance side of the problem. They already use Outlook, and Office365. Copilot is just one more point where things can go wrong, but it's less scary than your emails being captured and held for ransom, and you already think Microsoft can take care of that. But with Ollama or OpenRouter, you have no idea what is happening with your data, and you also are not sure if they are serving the real models, or quantized versions.
To be sure, there will be plenty of people finding alternate solutions, but 80-90% of the businesses will just pay the higher price to Microsoft.
For sure not everyone can self host (though I suspect most tech and tech adjacent companies can).
But all the existing “safe/trusted” cloud providers will offer cheaper models. The choice won’t just be GitHub vs OpenRouter. It will be DeepSeek, qwen, Gemma on GitHub vs Opus on GitHub. I’m sure AWS, GCP, Azure, etc will be happy to sell open weight models. And those lower priced models will put a cap on how many people pay for higher priced models.
Most businesses don't have the GPUs, or the knowledge necessary to do self-hosted inference. So, they'd have to rely on OpenRouter, or Ollama, or some other inference provider, but there are lots of problems with that. With Microsoft, people could get comfortable with the compliance side of the problem. They already use Outlook, and Office365. Copilot is just one more point where things can go wrong, but it's less scary than your emails being captured and held for ransom, and you already think Microsoft can take care of that. But with Ollama or OpenRouter, you have no idea what is happening with your data, and you also are not sure if they are serving the real models, or quantized versions.
To be sure, there will be plenty of people finding alternate solutions, but 80-90% of the businesses will just pay the higher price to Microsoft.