Microsoft is adopting a strategy of trailing behind leading AI developers like OpenAI, focusing on optimizing their technology for specific use-cases rather than competing directly. CEO Mustafa Suleyman emphasizes the cost-effectiveness of this approach, while also highlighting the importance of developing Microsoft's own models like the Phi series for future AI self-sufficiency. The partnership with OpenAI will continue for at least another five years, during which Microsoft aims to build supporting applications and frameworks around AI technologies.