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Microsoft is reportedly working on cheaper, smaller artificial intelligence (AI) models to tap more opportunities in the AI market.

The Information reported the new generative AI team will focus on developing smaller language models (SLMs) that are similar to LLMs like OpenAI's GPT-4 but use less computing power.

"Microsoft is doubling down on artificial intelligence that's smaller and cheaper to run than OpenAI's," the report mentioned.

The tech giant has formed a new team to develop conversational AI that requires less computing power compared to software it's using from OpenAI, said the report, citing sources.

The new GenAI team will reportedly be led by Microsoft corporate vice president Misha Bilenko, and will be part of the Azure cloud unit.

The company has also moved several senior AI developers from its research group to the new GenAI team. Meanwhile, OpenAI launched a GPT Store this month where users on its premium plans can sell and share customised AI models based on the company's LLMs.

To access the GPT Store, users must be subscribed to one of OpenAI's premium ChatGPT plans - ChatGPT Plus, ChatGPT Enterprise or the newly launched ChatGPT Team.

The Sam Altman-run company also announced it will start a revenue sharing programme with GPT creators in the first quarter of the year. ChatGPT Team is priced at $25 a month per user when billed annually or $30 a month for monthly billing.

ChatGPT Team is targeted toward teams with no more than 150 people and offers several features found in ChatGPT Enterprise, including access to GPT-4 and DALL-E 3 and the ability to create custom GPTs.