Microsoft and Elon Musk’s xAI in talks to bring Grok to Azure

Microsoft is preparing to run Elon Musk’s Grok AI model on its cloud platform Azure, according to a source familiar with the company’s internal discussions, as reported by The Verge.

Engineers at Microsoft have been directed to ready the company’s infrastructure in case a deal with Musk’s xAI moves forward.

The Grok model would likely be added to Azure AI Foundry, a development platform that offers tools, pre-built models, and services for creating AI applications. If the integration proceeds, it could make Grok accessible to developers building their own software and to internal Microsoft teams. Microsoft declined to comment when contacted by The Verge.

Microsoft has steadily expanded the range of AI models hosted on Azure, including some that compete directly with offerings from OpenAI, a long-time Microsoft partner. Earlier this year, Microsoft made a quick move to onboard DeepSeek’s R1 model – a low-cost option from a Chinese startup – onto Azure AI Foundry. That decision was made in response to rising interest in alternative AI models and reportedly involved rapid internal deployment efforts.

Microsoft CEO Satya Nadella has been closely involved in these efforts, pushing for Azure to become a go-to platform for hosting a wide variety of AI models. The infrastructure team has been tasked with ensuring the cloud service can keep up with the technical demands of new and emerging AI tools.

In a previous interview with The Verge, Asha Sharma, corporate vice president of Microsoft’s AI platform, spoke about how Azure AI Foundry is being shaped to support the backend systems required for a growing number of AI agents. “All of the systems that we’ve built for 50 years need to apply to AI agents,” Sharma said.

While Microsoft may be looking to host Grok, xAI has previously indicated a preference for keeping model training in-house. Musk reportedly backed out of a $10 billion deal with Oracle in 2023 and suggested at the time that xAI would train its models using internal infrastructure.

It’s unclear whether Microsoft would secure an exclusive arrangement to host Grok or if other cloud providers might also be involved. Based on current information, Microsoft’s role would likely be limited to model hosting, not training.

The potential collaboration has raised questions inside Microsoft, especially given Musk’s ties to the Department of Government Efficiency (DOGE) initiative. Musk has stated he plans to reduce his involvement with that effort sometime this month. If an agreement is finalised, Grok’s Azure debut could be announced during Microsoft’s Build conference, scheduled for May 19.

The relationship between Microsoft and OpenAI also remains under scrutiny. Earlier this month, OpenAI filed a countersuit against Musk, accusing him of using delaying tactics in bad faith. Tensions have been mounting between the two since Musk’s exit from the organisation he helped found.

Separately, The Wall Street Journal reported that Nadella and OpenAI CEO Sam Altman’s relationship appears weakening. Microsoft hirie of former DeepMind co-founder Mustafa Suleyman last year was seen by some as a way to hedge against a reliance on OpenAI. However, efforts to develop in-house models that rival OpenAI’s have so far produced limited results. That leaves Microsoft dependent on GPT-based technology for services like Office and Copilot.

Microsoft had been expecting the release of OpenAI’s GPT-5 model this month, but recent delays related to new feature rollouts and increased use have reportedly shifted that timeline.

Adding Grok to Azure would be in line with Microsoft’s broader strategy to offer a diverse range of AI models. GitHub Copilot, which is owned by Microsoft, already supports models from Anthropic and Google alongside OpenAI. This could eventually lead to a future where users can choose between multiple AI models in Microsoft’s developer tools and platforms.

(Photo by Unsplash)

See also: OpenAI expresses interest in acquiring Chrome amid antitrust trial

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