Microsoft made three announcements this week that are important for how the company makes its big bets on artificial intelligence by 2025. It started by creating a new AI engineering team to focus developers on building AI platforms and tools for both areas. Microsoft and its customers. Microsoft then announced on-demand pay-as-you-go proxies for its relaunched Copilot Chat for businesses, and ended the week by bundling Office AI capabilities into Microsoft 365 for consumers and increasing subscription prices.

All three announcements are tied to Microsoft's insatiable desire for AI to win. The company still prioritizes safety through employee performance reviews, but it increasingly feels that promoting artificial intelligence is an equally important priority.

The new engineering team is a great example of Microsoft's priorities. Led by former Meta Engineering Director Jay ParikhThe new CoreAI – Platforms and Tools division will bring together Microsoft’s Dev Div and AI Platform teams. Microsoft CEO Satya Nadella It described the reorganization as “the next leg of the shift into AI platforms” and said it would “reshape all application categories.” Nadella has often said the pace of artificial intelligence is changing software development, and now Microsoft is building an AI-first application stack to try to capitalize on that opportunity.

Combining Microsoft's AI platform efforts with its development arm will make AI central to the tools, platforms and services Microsoft builds for customers and its own teams. Nadella even described this platform shift as the ability of Microsoft's artificial intelligence agents, which are essentially virtual workers that automate tasks, to ultimately be able to build custom applications. For Microsoft, it's a transformation that looks like it will move the company from software as a service to software as a service - where once manual human tasks will be automated by software and artificial intelligence.

Microsoft has been selling cloud computing to businesses for the past 15 years, luring them away from traditional software licensed and installed on local servers in favor of servers hosted by the software giant. Before becoming CEO, Nadella led Microsoft's transformation into cloud infrastructure and services, a transformation that brought great success to the company. Now, Nadella appears to be betting on being able to automate many human-centric services and package them into software solutions that Microsoft can sell to enterprises.

I spoke with some employees in Microsoft's development department this week, and it's clear there's some uneasiness about the company's commitment to AI at all costs. Microsoft's new artificial intelligence engineering team formed days after Meta takes over Mark Zuckerberg Predicts that by 2025 "Meta and other companies working on this will have an AI that effectively becomes a mid-level engineer in the company who can write code." in an interview Joe RoganZuckerberg said he believes that, over time, much of the code in Meta apps "will be built by AI engineers rather than human engineers."

It's a scary prospect for the thousands of engineers at Meta and Microsoft who have spent their entire careers learning how to build software. An engineer on Microsoft's new CoreAI team told me that there is now a feeling that if you are not fully committed to artificial intelligence, there will be no place for you in this new team.

Microsoft's transformation here will undoubtedly see changes in engineering jobs as part of the AI ​​revenue opportunities the company continues to pursue. Investors are increasingly looking for returns on Microsoft's big investments in artificial intelligence, with recent reports suggesting the company is trying to sell businesses on paying extra for AI-powered versions of its Office applications. That's probably why this week we also saw Microsoft relaunch Copilot as Microsoft 365 Copilot Chat, complete with free ChatGPT-like features and pay-as-you-go proxies. It is a rebranding of what was once Bing Enterprise Chat, then Copilot, and now Copilot Chat.

me and Jared SpataroThe relaunch is also Microsoft's latest attempt to get people hooked on using artificial intelligence at work, Microsoft's chief marketing officer for artificial intelligence said earlier this week. “We found that when you start using it, you get used to it and appreciate the value it provides at work,” Spataro said.

Copilot's free chat feature is already popular with businesses that rely on Microsoft software and services, and by adding an agent feature, businesses have the opportunity to pay extra to automate tasks using artificial intelligence.

Microsoft can also use this Copilot Chat to entice businesses to upgrade to the full version of Microsoft 365 Copilot for $30 per user per month. "While Copilot Chat is a powerful new entry point for everyone in the organization to develop AI habits, Microsoft 365 Copilot remains our best-in-class personal AI work assistant," said Spataro.

This is where Copilot truly transforms from a simple chatbot into a more assistive technology that can analyze Excel data, write paragraphs in Word, or generate entire PowerPoint presentations for you. Many CTOs tell me that businesses are finding the greatest value in Copilot within Microsoft Teams, where an AI assistant will transcribe meetings and extract key talking points so you can easily take calls you may have missed.

However, most businesses won't pay extra for Copilot within Office applications. While adding an artificial intelligence version of the Python programming language to Excel is powerful, and Outlook email summaries are useful, Microsoft needs more compelling features if it wants businesses to pay $30 per user per month. Copilot function.

A similar story exists on the consumer side, which is why Microsoft this week began bundling its AI-powered Office features into Microsoft 365 personal and home subscriptions. Instead of asking consumers to pay an extra $20 per month for Copilot Pro, Microsoft is raising its subscription price by $3 per month to bundle Copilot into Office applications.

As part of this price increase, Microsoft is offering a set of AI credits that can be used in applications such as Word, Excel, PowerPoint, Outlook, and OneNote on Copilot. You'll earn these points each month, which can also be used to generate images, etc., in the Designer application or in applications on Windows such as Paint, Photos, and Notes. If you want unlimited use of Copilot or all these AI features in Office applications, you still have to pay for Copilot Pro.

Microsoft has been testing this Microsoft 365 subscription change in some markets in Australia, New Zealand, and Asia, and this week's global launch feels like a larger test before the company does something similar with its business subscriptions.

Google is likely to force Microsoft's hand in this regard, as it was revealed this week that its Gemini Business plan (which previously had to be paid $20 per user per month) is now free. Google is now bringing all of its artificial intelligence capabilities to its Workspace app for free, putting pressure on Microsoft to make some similar moves for Microsoft 365 business customers.

As competition heats up in 2025, expect Microsoft to introduce more creative pay-as-you-go agents or AI credit methods to get consumers and businesses addicted to AI.

• After October 14, Microsoft will no longer support Office applications on Windows 10. If you're still using Windows 10, the time to upgrade is getting closer. Microsoft has begun warning that it will no longer support Office apps (known as Microsoft 365 Apps) on Windows 10 after October 14, the date support for the older operating system ends. While these applications will continue to function, issues may arise over time. This is all part of Microsoft's efforts to get businesses and consumers to upgrade to Windows 11.
• Microsoft stopped using Bing to trick people into thinking they were using Google. Microsoft has quietly begun removing its deceptive Google user interface, which it used to fool Bing users into thinking they were using Google. The page that appears after searching for "Google" on Bing no longer has a special search bar or a Google Doodle-like image. Now this is just a regular Bing search result, although some countries still have fake Google UI.
• Parallels is testing Windows x86 emulation on Apple Silicon Macs. If you own a recent MacBook and want to use Windows on it, there's some promising news this week. Parallels has launched an "early technology preview" that allows Apple-silicon Macs to emulate Intel-based hardware to run Windows. Performance will now be "very slow" though, with boot times taking up to seven minutes. Hopefully things will improve as the technology preview progresses.
• Microsoft's former Surface design chief joins Amazon. Two key Surface inventors are reuniting at Amazon this week. ralph greenFormer Windows and Device Design Lead, now joins Amazon as Panos Panayequipment and service team. Panay, who left Microsoft in 2023, created the original Surface tablet with Groene more than a decade ago. Amazon also hires Xbox co-founder J. Allard Most recently, he also worked on Panay's equipment team. I'd love to know what dreams these three former Microsoft colleagues have at Amazon.
• Microsoft CEO is cozying up to Trump. Satya Nadella and Microsoft President Brad Smith join in Elon Musk and the president-elect of the United States Donald Trump Lunch on Wednesday to discuss cybersecurity, artificial intelligence and technology policy. Like many other technology companies, Microsoft donated $1 million to Trump's inaugural fund.
• There is no longer a waitlist for GitHub Copilot Workspace. Microsoft-owned GitHub has dropped its waitlist for its artificial intelligence coding assistance tool. There has been a waiting list since last April, but developers can now try out the technical preview without waiting for approval.
• Microsoft is committed to complying with the EU's Artificial Intelligence Act. Microsoft says it is ready to comply with the EU Artificial Intelligence Act. "We are building our products and services to comply with obligations under the EU Artificial Intelligence Act and working with our customers to help them deploy and use the technology compliantly," said Natasha Cramptonchief artificial intelligence officer at Microsoft. Microsoft's announcement contrasts with a group of companies including Meta and Spotify calling for an end to "inconsistent regulatory decisions" on European AI rules.
• Microsoft has applied for a patent for gaming artificial intelligence to "create and alter game narratives." I'm still waiting for Microsoft to reveal its plans for Xbox AI, but it looks like the company is already exploring how AI can be used in game design. Windows Center A 2024 patent has been discovered that would allow designers and players to customize games through generative AI prompts. Nvidia has been showing off similar work for NPCs in games, and I wouldn't be surprised if we started seeing more of this work.
• Forty years at Microsoft = a giant crystal. Not many Microsoft employees can say they have been with the company for 40 years, but Larry Osterman It's one of them. To celebrate Osterman's long tenure, which included work on Windows, Exchange and Azure, Microsoft presented him with a giant 40th anniversary crystal. It took nearly six months to deliver, and it looks like it was worth the wait. I never knew Microsoft had a 40th anniversary gift.
• New Copilot features are coming to Mac. Microsoft has started rolling out Copilot in Outlook for Mac for Microsoft 365 Copilot subscribers. You can access Copilot directly from Outlook, where it appears next to Contacts and Calendar.

Thank you for subscribing and reading to the end. This week's issue is a day late as Microsoft's final AI announcement of the week will be released on Thursday. next week Notepad It will also be released on Friday, the day after the Xbox Developer Direct event.

If you hear about any other secret projects from Microsoft, you can contact me via email at notepad@theverge.com or chat privately with me on the Signal messaging app, I'm tomwarren.01. I'm also tomwarren on Telegram if you'd like to chat there.