Microsoft has established the GenAI team with the goal of developing smaller and cheaper artificial intelligence models. The GenAI team will focus on language models similar to OpenAI's GPT-4 but using fewer computing resources. Led by Microsoft Vice President Misha Bilenko, the team will be part of the Azure cloud division. The objective is to enhance the scalability and cost-effectiveness of AI models, reducing operational costs on supercomputers. This initiative is significant for companies providing cloud-based AI services, enabling them to operate on a wider range of hardware.