Microsoft has released its local AI 'MAI-Code-1.1-Flash' and is also proposing 'hybrid intelligence' that combines local AI and cloud AI.

Microsoft has announced 'MAI-Code-1.1-Flash,' an AI model developed with local execution in mind. They also indicated their intention to enhance Windows' AI capabilities to achieve 'Hybrid Intelligence,' which combines locally running AI on PCs with AI running in the cloud.

Building Windows for hybrid intelligence | Windows Experience Blog
https://blogs.windows.com/windowsexperience/2026/10/07/building-windows-for-hybrid-intelligence/

MAI-Code-1.1-Flash: Better, faster, at a quarter of the cost | Microsoft AI
https://microsoft.ai/news/mai-code-1-1-flash-br-better-faster-at-a-quarter-of-the-cost/

MAI-Code-1.1-Flash is a model capable of generating higher-quality code compared to ' MAI-Code-1-Flash, ' which was released in June 2026, and has succeeded in improving token efficiency by 25%. In addition, it reduces memory usage through 3-bit quantization and enables local execution.

To run MAI-Code-1.1-Flash locally, it is recommended to use a PC with 120GB or more of memory. On the same day that MAI-Code-1.1-Flash was announced, Microsoft also announced the 'Surface Laptop Ultra' notebook PC and the 'Surface RTX Spark Dev Box' mini PC, both with a maximum memory capacity of 128GB.

Microsoft's Surface Laptop Ultra, a notebook PC with 128GB of memory and an RTX Spark graphics card optimized for AI processing, and the Surface RTX Spark Dev Box mini PC are now available for pre-order - GIGAZINE

Furthermore, Microsoft proposed 'hybrid intelligence,' which combines local AI and cloud AI. While local AI is less powerful than cloud AI, it has the significant advantage of being able to complete processing on the device without sending confidential information externally. By implementing 'powerful local AI,' 'high-performance runtime,' and 'routing functionality to select the optimal AI' on Windows PCs, hybrid intelligence that uses local AI and cloud AI as needed will be realized.

Hybrid intelligence allows Copilot to use data on the PC to perform tasks on behalf of the user. However, Copilot will only access data with the user's permission.

We're supercharging Copilot on Windows with Hybrid Intelligence.

With your permission, Copilot can tap into the context on your PC, take action for you, and use local models when it makes sense, giving you more capability while helping your tokens go further. pic.twitter.com/7YvqHh8RKT

— Satya Nadella (@satyanadella) October 7, 2026