Microsoft to sell AI assistant software to biggest clients starting Nov. 1

Microsoft to sell AI assistant software to biggest clients starting Nov. 1

Satya Nadella speaking at the 2016 World Economic Forum in Davos, Switzerland.

David A. Grogan | CNBC

Microsoft said Thursday that starting Nov. 1, large companies will be able to buy Microsoft 365 Copilot, its artificial intelligence supplement to core productivity apps such as Word and Excel.

The launch of the AI tool will expand an already market-leading part of Microsoft’s business. Office applications contribute 24% of Microsoft’s total revenue, and the category grew 16% in the fiscal fourth quarter, more than 30 years after the company began offering the bundle.

Microsoft 365 Copilot is one result of the company’s close collaboration with San Francisco startup OpenAI, which became a household name after ChatGPT, OpenAI’s chatbot, went viral last year. Across Microsoft 365 Copilot and several other products announced this year, Microsoft is relying on OpenAI’s underlying GPT-4 large language model, which underpins ChatGPT and can summarize information or generate human-like text in response to a written prompt. Microsoft’s Azure public cloud does OpenAI’s computing work.

Microsoft has also been developing assistants for its Fabric data-analytics software, its Dynamics sales and customer-service software, its Bing search engine and its Windows 11 operating system. But at a New York event Thursday, the company said it will begin rolling out one Copilot in Bing, Edge and Windows 11 on Sept. 26.

For corporate workers, the Copilot in Microsoft 365 can help them prepare Word files and PowerPoint presentations and quickly find information from email messages.

Satya Nadella, Microsoft’s CEO, said Thursday that he was excited to chat with Copilot in his personal account. He added that in his eyes, the work with AI assistants is as notable as the rise of the PC in the 1980s, the internet in the 1990s and mobile in the 21st century.

In March, Microsoft first revealed plans for Microsoft 365 Copilot. As of May, 600 large organizations were using it in a paid early-access program. In July, the company announced the price of $30 per person per month for the enhancements, on top of existing subscription costs for Microsoft 365, formerly known as Office 365.

Microsoft isn’t alone in its goal to use generative AI to enhance word processing, spreadsheets and presentations. Google asked a monthly price of $30 per person for its Duet AI for Google Workspace, which became available to enterprises at that price late last month.

Microsoft 365 Copilot tools are now in preview with small businesses, Colette Stallbaumer, a general manager, said at Thursday’s event.

Turning Microsoft 365 Copilot into a big business might take time. Amy Hood, the company’s finance chief, told analysts in July that growth from AI services would be “gradual” as organizations adopt certain Azure capabilities and Copilots such as the Microsoft 365 Copilot become generally available for broad purchasing.

Hood said that for Microsoft’s current 2024 fiscal year, which will end in June 2024, the financial effects would mainly come in the second half.

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