Microsoft is now hosting xAI’s Grok 3 models

I reported in my Notepad newsletter earlier this month that Microsoft was getting ready to host Elon Musk’s Grok AI models, and now it’s official. At Microsoft’s Build developer conference today, the company confirmed it’s expanding its Azure AI Foundry models list to include Grok 3 and Grok 3 mini from xAI.

“These models will have all the service level agreements (SLAs) Azure customers expect from any Microsoft product,” says Microsoft. The Grok AI models will be hosted and billed directly by Microsoft, and offered to its own product teams and customers through its Azure AI Foundry service.

It’s a surprise addition that could prove controversial internally and further inflame tensions with Microsoft’s partner OpenAI. Microsoft has been steadily growing its Azure AI Foundry business over the past year, and has been quick to embrace models from a variety of AI labs that compete with its OpenAI partner.

In January I reported in Notepad that Microsoft CEO Satya Nadella had moved with haste to get engineers to test and deploy DeepSeek R1 as it made headlines around the world. Engineers didn’t sleep much over those days while they worked overtime to get R1 ready for Azure AI Foundry.

Sources tell me Nadella has been pushing for Microsoft to host Grok, as he’s eager for Microsoft to be seen as the hosting provider for any popular or emerging AI models. Grok is the latest model to join the Azure AI Foundry, which is quickly becoming an important AI service for Microsoft as it seeks to be seen as the platform to host AI models for businesses and app developers.

The announcement of Grok on Azure AI Foundry comes just days after the chatbot spent hours telling every X user that the claim of white genocide in South Africa is highly contentious. xAI blamed the behavior on an “unauthorized modification” to Grok’s code. xAI has had a similar problem earlier this year, when the company blamed an unnamed ex-OpenAI employee for pushing a change to Grok that saw it disregard any sources that accused Elon Musk or Donald Trump of spreading misinformation.

Naturally, OpenAI CEO Sam Altman was quick to poke fun at Grok in an X post last week. OpenAI countersued Musk earlier this month over claims that the Tesla boss is using “bad-faith tactics to slow down OpenAI.” Elon Musk and OpenAI have been in a legal spat for months now, after Musk’s messy breakup with the AI lab he helped to cofound nearly 10 years ago.