UPDATE 2-Microsoft launches lightweight AI model

(Adds Phi-3 being available in Nvidia's products in paragraph 6)

April 23 (Reuters) - Microsoft on Tuesday launched a lightweight artificial intelligence model, as it looks to attract a wider client base with cost-effective options.

The new version called Phi-3-mini is the first of the three small language models (SLM) to be released by the company, as it stakes its future on a technology that is expected to have a wide-ranging impact on the world and the way people work.

"Phi-3 is not slightly cheaper, it's dramatically cheaper, we're talking about a 10x cost difference compared to the other models out there with similar capabilities," said Sébastien Bubeck, Microsoft's vice president of GenAI research.

SLMs are designed to perform simpler tasks, making it easier for use by companies with limited resources, the company said.

Phi-3-mini will be available immediately on Microsoft cloud service platform Azure's AI model catalog, machine learning model platform Hugging Face, and Ollama, a framework for running models on a local machine, the company said.

The SLM will also be available on Nvidia's software tool Nvidia Inference Microservices (NIM) and has also been optimized for its graphics processing units (GPUs).

Last week, Microsoft invested $1.5 billion in UAE-based AI firm G42. It has also previously partnered with French startup Mistral AI to make their models available through its Azure cloud computing platform. (Reporting by Mrinmay Dey, Abinaya Vijayaraghavan and Zaheer Kachwala in Bengaluru, Jeffrey Dastin in San Francisco; Editing by Rashmi Aich and Anil D'Silva)