Microsoft launched its Phi-3 platform with three models, aimed at bringing high-performance AI to mobile devices and PCs.

The Phi-3 Mini has been successfully tested on an iPhone 14, showing that smaller language models can rival the performance of larger ones.

These smaller language models are designed to be cost-effective and accessible, even to organizations with limited resources.

Phi-3 models will be available on multiple platforms including Microsoft's Azure, Hugging Face, Ollama, and Nvidia's NIM.

Microsoft's investment in AI extends to partnerships with UAE's G42 and France's Mistral AI, showcasing a commitment to expanding their AI offerings.

The tech industry is moving towards creating efficient AIs that can operate directly on consumer devices, reducing dependence on large server farms.

While smaller language models are a significant step forward, they currently face limitations such as language restrictions and storage of vast factual knowledge.

Microsoft's stock saw an increase following the announcement, with an upcoming earnings report expected to shed more light on their AI advancements.