The company introduced an AI model called Phi-3-mini, which it said can outperform models twice its size across various benchmarks that evaluate language, coding and math capabilities, it said in a statement.

Microsoft said that smaller AI models are designed to perform more straightforward tasks, making it easier for companies with limited resources.

Microsoft added that a business could use Phi-3 to summarize the main points of a long document and extract relevant insights and industry trends from market research reports.

The company said phi-3-mini would be available immediately on Microsoft cloud service platform Azure's AI model catalog, machine learning model platform Hugging Face, and Ollama, a framework for running models on a local machine.

Last week, Microsoft invested $1.5 billion in UAE-based AI firm G42. It previously partnered with French startup Mistral AI to make its models available through its Azure cloud computing platform.