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Microsoft has unveiled an upgraded version of its artificial intelligence assistant that remembers user preferences and take actions on their behalf, as the tech group takes on rivals building AI-infused products designed to attract millions of consumers.
The Seattle-based group at an event on Friday to mark its 50th anniversary announced a personalised “Copilot” that develops a “memory” and can recall important details, such as family birthdays and hobbies.
Mustafa Suleyman, the company’s consumer AI chief and co-founder of Google’s DeepMind unit, previewed several features, such as its digital assistant being able to independently book tickets, make reservations and shop for goods online.
“This is far richer, more dynamic, supportive and emergent than any software we’ve seen before,” Suleyman said, noting customers would retain controls over the new “agentic” AI abilities.
The Copilot update represents the biggest step for the company’s consumer AI unit, more than a year after Suleyman joined Microsoft and as the company undergoes a strategic overhaul to reduce its OpenAI dependency.
Microsoft’s corporate offerings, such as its 365 workplace and Azure cloud, have helped drive profitability. The group derives more than three-quarters of its revenues from those services.
But the company is seeking to leverage AI to reinvent its image among consumers, a market it has frequently lost ground to competitors, such as Apple, Amazon and Google.
Suleyman was speaking at an event attended by former chief executive Steve Ballmer and co-founder Bill Gates. Both leaders had, at various times, made poorly received bets in the consumer market, including the Zune music player and a Windows line of smartphones.
Current CEO Satya Nadella, who took over in early 2014, further pivoted Microsoft’s business from desktop computers to the cloud. The company’s share price has risen tenfold since to nearly $2.8tn.
“Windows phone was a huge miss. Search has been a huge miss. Microsoft has had a number of big misses,” said S Somasegar, a managing director at venture capital firm Madrona and a former Microsoft executive. “If the work Mustafa is doing with consumer AI starts resonating, it will unlock huge amounts of value.”
Suleyman also demonstrated a podcast-generating feature, having poached staff from DeepMind, which created a similar feature for Google’s AI unit. The company also highlighted a new “Vision” feature that will enable Copilot to process information from a user’s phone camera.
The Microsoft AI chief previewed plans for Copilot to have an avatar, reminiscent of when the company launched its infamous Clippy digital assistant in the late 90s.
Microsoft said it was using AI to upgrade the company’s Bing search as it seeks to compete with Google in a market where the Mountain View-based search group retains a 90 per cent market share.
The moves come amid concern that Microsoft has grown dependent on its relationship with OpenAI. Copilot is built, in part, using the start-up’s models but the feature is less popular than the start-up’s own ChatGPT. Several features Microsoft highlighted on Friday, including “deep research”, are available on OpenAI’s platform.
Nadella hired Suleyman in March 2024 from Inflection AI, the start-up he co-founded in 2022, paying $650mn to license Inflection’s technology and hire most of its talent.
That was less than six months after a board room bust up at OpenAI that involved founder Sam Altman being fired before being restored at the helm of the organisation.
Nadella helped Altman return to his post, but has distanced the company from the OpenAI’s capital intensive pursuit of artificial general intelligence, when computers reach or surpass human cognition.
“Us self-claiming some AGI milestone, that’s just nonsensical benchmark hacking to me,” Nadella told podcaster Dwarkesh Patel earlier this year.
Microsoft has instead focused on the commercialisation of the technology, arguing that much of the potential uplift tied to AI will be generated through applications. The company has also widened its pool of AI investments, backing France’s Mistral and Abu Dhabi’s G42.
The software group maintains a profit-sharing agreement with OpenAI and access to its models until at least 2030.
