Microsoft Makes a New Push Into Smaller A.I. Systems

In the dizzying race to build generative A.I. systems, the tech industry’s mantra has been bigger is better, no matter the price tag.

Now tech companies are starting to embrace smaller A.I. technologies that are not as powerful but cost a lot less. And for many customers, that may be a good trade-off.

On Tuesday, Microsoft introduced three smaller A.I. models that are part of a technology family the company has named Phi-3. The company said even the smallest of the three performed almost as well as GPT-3.5, the much larger system that underpinned OpenAI’s ChatGPT chatbot when it stunned the world upon its release in late 2022.

The smallest Phi-3 model can fit on a smartphone, so it can be used even if it’s not connected to the internet. And it can run on the kinds of chips that power regular computers, rather than more expensive processors made by Nvidia.

Because the smaller models require less processing, big tech providers can charge customers less to use them. They hope that means more customers can apply A.I. in places where the bigger, more advanced models have been too expensive to use. Though Microsoft said using the new models would be “substantially cheaper” than using larger models like GPT-4, it did not offer specifics.

The smaller systems are less powerful, which means they can be less accurate or sound more awkward. But Microsoft and other tech companies are betting that customers will be willing to forgo some performance if it means they can finally afford A.I.