Microsoft revamps Copilot with code generation, agentic AI tools

Microsoft is transforming its Copilot AI assistant into a superapp, integrating it with Office applications, programming tools, and autonomous agents that can handle tasks. The company will adopt a consumption-based pricing model for the most complex AI tasks. Copilot will become a central gateway to AI for businesses, according to Satya Nadella, Microsoft's CEO.

The new Copilot combines various ways of using AI technology, including Autopilot, a system of agents designed to manage projects, coordinate tasks, and operate continuously within organizations. Code, another tool, enables employees without programming knowledge to create internal applications, dashboards, automations, and workflows using natural language instructions.

Microsoft intends for users to simply state the task they need solved, and Copilot will automatically utilize the necessary capability to execute it. The company also introduces a shift in AI pricing, charging for consumption for tools like Code, Cowork, and Autopilot, as well as using frontier models like Claude Fable (Anthropic) and Astra from OpenAI.

This reflects the rising computational costs for tech providers of AI systems capable of generating code or autonomous agents. In Nadella's last earnings presentation, he hinted that traditional services tied to a per-user license would transition to hybrid formulas, focusing on increased usage of these tools. To prevent customer spending from exploding due to this variable model, Microsoft will incorporate cost-control tools, allowing the setting of consumption limits, assignment of credits to specific teams, and restriction of access to advanced and expensive models.

The deployment of agents also raises security concerns, as these systems are increasingly at the center of AI debates. Nadella described agents as a potential internal risk for organizations, emphasizing the need for identity, permissions, and monitoring mechanisms. Code, agents, and other new features will gradually roll out to Microsoft's Frontier access program customers in the coming weeks, while the agent tool will expand to private beta access by the end of September.