In a possible development that is almost guaranteed to raise a lot of hackles in Washington, Microsoft is considering the use of a self-hosted version of DeepSeek's V4 model for Copilot Cowork, as OpenAI and Anthropic appear determined to price themselves out of the market.
Soaring token costs are driving enterprise customers away from OpenAI and Anthropic and right into the lap of China's DeepSeek
For the benefit of those who might not be aware, a token is the smallest unit of data that an AI model processes, and is typically around 4-character long. A model's context window or working memory is entirely measured in tokens, and spans tokens consumed for understanding the input prompt as well as those used to generate the relevant output.
As model complexity and agentic workloads increase, however, token costs are becoming a critical inhibitor, especially for coding-related tasks where the token consumption might soar unexpectedly.
After all, who can forget Uber blowing through its entire AI budget for 2026 in just 4 months after incentivizing employees to use more AI? In fact, tech-savvy employees are now adopting tokenmaxxing as a way of topping internal AI-use leaderboards by using AI models for menial tasks, replete with long prompts and agentic loops.
To add insult to the proverbial injury, OpenAI and Anthropic are not only increasing pricing for their enterprise plans, but are also using creative ways to limit the total number of tokens that can be consumed.
This brings us to the core of today's topic. Axios is out with a scoop today, detailing that Microsoft might opt for DeeSeek's V4 model, or another similar one, albeit hosted on its own infrastructure, to power Copliot Cowork, which combines Copilot's enterprise-related functions with advanced AI models from OpenAI and Anthropic to make agentic AI-powered workflows a relative breeze.
The change has been spurred by Microsoft's decision to transition Copilot Cowork towards a metered architecture where you pay for the total tokens consumed instead of a flat rate.
Even though DeepSeek's models are based on an open-source architecture, such a move is unlikely to sit well in Washington, which just compelled Anthropic to pull its Mythos-class Fable 5 model from all users who are not U.S. citizens after Amazon allegedly disclosed a way to jailbreak the model's advanced cyber capabilities. Some have speculated, however, that the move starves China-based AI players who've made distillation of American models into an artform.
Finally, the latest tidbit comes at a time when DeepSeek has just raised $7.4 billion at a $50 billion valuation, and is racing ahead to expand its compute footprint.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
Follow Wccftech on Google to get more of our news coverage in your feeds.
