Microsoft is about to let Copilot loose on your file system

Microsoft is preparing to introduce more artificial intelligence capabilities to its Windows operating system, giving its Copilot tool access to all files stored on users' computers. Microsoft insists that the AI agents powering this new functionality will operate entirely on users' machines, with some processing occurring locally and other tasks handled in the cloud.

The company has introduced a new technology called "hybrid intelligence," which combines local models running on devices with cloud-based models. This approach allows Windows apps and Copilot features to use local AI models for simple tasks or privacy-sensitive operations, while more complex or performance-intensive requests are handled by powerful AI models like GPT-6 or Claude.

Microsoft says its new "Execution Containers" provide a secure environment for these AI agents, ensuring they operate within strict permissions and won't escape their sandboxed spaces. The company has also updated its Windows Machine Learning (ML) framework to support a powerful local AI inference engine called Llama.cpp, which could allow Copilot to run on more devices and accelerate AI tasks.

Microsoft plans to roll out the hybrid intelligence features to GitHub Copilot, its AI coding assistant, next week, followed by a broader release of Copilot features over the coming months. In a demo, Microsoft showed how Copilot could search and organize a user's tax documents, then draft an email with those files attached and addressed to a tax professional.

The company also added AI-enhanced search functionality to Windows, allowing users to quickly find settings like dark mode. Additionally, Windows will include a conversational interface for performing tasks like sending text messages. Microsoft plans to make it easier for businesses to deploy AI agents like OpenClaw, which could help reduce the load on Microsoft's servers by keeping less complex tasks on users' devices.