Microsoft brings more AI to PCs as it challenges Apple

Microsoft unveiled an AI coding model that can run directly on personal computers, as the company aims to challenge Apple's push to integrate more AI into personal devices. The company also introduced a high-powered Surface laptop called Ultra, powered by Nvidia's RTX Spark chips, during an event in San Francisco.

Microsoft's goal is to turn Windows into a platform for AI agents to handle tasks such as writing computer code or working on complex business projects on desktops and laptops. The company believes this shift could move some work currently happening in its costly Azure cloud computing data centers to high-powered Windows machines, which are already owned by businesses and individuals. Apple is also pursuing a similar strategy with new Mac computers.

To address security concerns, Microsoft introduced Microsoft Execution Containers, a tool to prevent AI agents from accessing data and performing unauthorized tasks when running on a laptop or desktop machine. This technology will be used by Anthropic, OpenAI, and Nvidia. Microsoft CEO Satya Nadella emphasized the importance of making the desktop the most secure place for agents to execute, with IT departments able to set rules for agents and the Windows operating system enforcing those rules on each employee's machine.

Nvidia CEO Jensen Huang joined Nadella on stage to promote Nvidia's MXC execution container technology, which the company believes will revolutionize how agents are built and deployed. Nvidia aims to avoid a repeat of the hack at AI hub Hugging Face, while Apple is focused on tightening the process for granting AI agents full access to a Mac computer's hard drive.

Microsoft also demonstrated AI models that can now run locally on high-powered Windows desktops and laptops, including Nvidia's open-source Nemotron model. The company plans to split tasks between its cloud-based AI assistant, Copilot, and local models running directly on individual laptops, depending on factors such as cost and privacy concerns. Microsoft's Copilot chief, Jacob Andreou, explained that Copilot will continue to use the cloud for the most complex tasks, but can delegate down to local models when necessary.

The new security tools and AI capabilities come at a steep price, as the new Surface Laptop Ultra starts at $2,599 and can go up to $5,899 for a model with a 20-core processor, 128 GB of memory, and one terabyte of storage. Apple's MacBook Pro with a 40-core graphics chip, 128 GB of memory, and two TB of storage costs $6,700, though the two machines are not directly comparable.

Microsoft's entry-level Ultra is more expensive than Apple's base MacBook Pro, which starts at $1,999, but comes with 24 GB of memory compared to Apple's 16 GB. Analyst Anshel Sag of Moor Insights & Strategy noted that the steep pricing makes it challenging for Microsoft and Nvidia to gain widespread adoption in the Windows PC market, where Intel and Advanced Micro Devices currently hold strong positions.