Microsoft, the tech giant known for its popular Office suite of applications, is set to expand its offerings with the launch of Microsoft 365 Copilot, an artificial intelligence (AI) supplement to its productivity apps. The AI tool, which will be available for purchase by large companies from November 1st, is expected to further boost Microsoft’s already market-leading Office applications. Office applications contribute 24% of Microsoft’s total revenue and saw a 16% growth in the previous fiscal quarter.
Microsoft’s collaboration with San Francisco startup OpenAI has been instrumental in the development of Microsoft 365 Copilot. OpenAI gained widespread recognition after its chatbot, ChatGPT, went viral last year. The underlying technology of Microsoft 365 Copilot, called GPT-4, is based on OpenAI’s large language model, which can generate human-like text or summarize information in response to a prompt. OpenAI’s computing work is done on Microsoft’s Azure public cloud.
In addition to Microsoft 365 Copilot, Microsoft has been working on developing AI assistants for various products, including its Fabric data-analytics software, Dynamics sales and customer-service software, Bing search engine, and Windows 11 operating system. The company plans to roll out a Copilot for Bing, Edge, and Windows 11 on September 26th.
For corporate users, Microsoft 365 Copilot will offer assistance in tasks such as preparing Word files and PowerPoint presentations, as well as quickly finding information from email messages. Satya Nadella, Microsoft’s CEO, expressed his excitement about interacting with Copilot personally and compared the significance of AI assistants to previous technological advancements, such as the rise of personal computers in the 1980s and the internet in the 1990s.
Microsoft first announced its plans for Microsoft 365 Copilot in March and, as of May, 600 large organizations were already using it in a paid early-access program. The pricing for the enhancements is $30 per person per month, in addition to the existing subscription costs for Microsoft 365.
It is worth noting that Microsoft is not the only company venturing into the realm of generative AI for word processing, spreadsheets, and presentations. Google recently released its Duet AI for Google Workspace, charging a monthly fee of $30 per person for enterprise users.
While Microsoft is optimistic about the future of AI services, including Copilots, the company’s finance chief, Amy Hood, stated that the adoption and financial impact of these services would be gradual. Microsoft expects the financial effects of AI services to mainly take place in the second half of its current fiscal year, which will end in June 2024.
In summary, Microsoft’s launch of Microsoft 365 Copilot is a significant step in its AI efforts, offering AI-powered assistance to corporate users in various tasks. Collaborations with OpenAI and the use of its GPT-4 language model have played a crucial role in the development of Microsoft 365 Copilot. However, the financial impact of AI services is expected to be gradual, with Microsoft predicting the majority of effects to be realized in the latter half of the current fiscal year. Nonetheless, Microsoft remains optimistic about the potential of AI assistants and their long-term significance.
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