Comment An Obvious Development (Score 4, Insightful) 43
They want everyone to use their AI tools.
Certain government, health care, and financial organizations are legally restricted from sharing data. Having worked in such a place before, they'll blanket ban AI rather than risk the unauthorized transmission of protected data. This functionality offers an alternative that they can accept.
If Microsoft wants their AI features to be adopted widely, they basically had no choice but to implement a local model. The fact that it's cheaper to use the customer's electricity is probably meaningless to them; they want to capture the userbase.