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Microsoft Weighs DeepSeek Models for Copilot Cowork

June 16, 2026 at 12:34 EDT

Sales & Business
Foundation Models
AI Agents

Microsoft is exploring the use of China-based DeepSeek's models as a low-cost alternative to rein in the cost of its enterprise AI agent Copilot Cowork. The models would be fully hosted on Azure, with a low-cost option set to arrive within weeks, Axios reported on June 16, 2026.

June 2026 · Microsoft · Copilot Cowork

Microsoft Weighs an Azure-Hosted DeepSeek to Cut Copilot Cowork Costs

As Copilot Cowork shifts to usage-based pricing, Microsoft is reportedly considering a fully Azure-hosted DeepSeek V4 as a cheaper option alongside Anthropic and OpenAI models. A decision is expected within weeks.

Weeks

Until a model decision is expected to be announced

100s

Tasks per week run by heavy users, driving bills sharply higher

100%

Azure-hosted, offered strictly as an optional model

DeepSeek R1 example pricing · Global

Output tokens cost 4× input tokens

$1.35

Input (per M)

$5.40

Output (per M)

DeepSeek's low cost is seen as valuable where frequent agent usage inflates billing.

Multi-model routing strategy

Copilot Cowork task

Multi-step agent work

→

Route to best model

Claude · OpenAI · DeepSeek

→

Execute on approval

Email · schedule · draft

Hope

Low cost could make large-scale workflows — document processing, research pipelines, agentic coding — practical, with V4 near-frontier at a fraction of the cost.

Concern

Reliance on a Chinese company's model, plus data privacy and bias — though an Azure-hosted, fine-tuned version applies enterprise security and compliance controls.

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