Satya Nadella Speaking at the 2016 World Economic Forum in Davos, Switzerland
Microsoft announced on Thursday that starting November 1, large companies will have the opportunity to purchase Microsoft 365 Copilot, an AI supplement to core productivity apps like Word and Excel. This launch will further strengthen Microsoft’s leading position in the market. Office applications already contribute 24% of Microsoft’s total revenue, and the category experienced a 16% growth in the fiscal fourth quarter, over 30 years since the bundle was first offered.
Microsoft 365 Copilot is a result of the collaboration between Microsoft and OpenAI, a San Francisco startup. OpenAI gained widespread recognition last year with its viral chatbot, ChatGPT. Microsoft is utilizing OpenAI’s GPT-4 large language model, which powers ChatGPT, to develop Microsoft 365 Copilot and other new products. Microsoft’s Azure public cloud handles OpenAI’s computing work.
In addition to Microsoft 365 Copilot, Microsoft has been working on assistants for various software and services, including Fabric data-analytics software, Dynamics sales and customer-service software, Bing search engine, and Windows 11 operating system. The company announced that Copilot will be rolled out in Bing, Edge, and Windows 11 starting September 26.
For corporate workers, Microsoft 365 Copilot can assist in preparing Word files and PowerPoint presentations and quickly finding information from email messages. Satya Nadella, Microsoft’s CEO, expressed his excitement about using Copilot personally during his stay in a hotel room the night before. He also mentioned the high demand for Microsoft 365, which resulted in a waitlist.
Microsoft first announced plans for Microsoft 365 Copilot in March. By May, 600 large organizations were already using it in a paid early-access program. In July, Microsoft revealed the pricing for the enhancements at $30 per person per month, in addition to existing subscription costs for Microsoft 365.
Google is also pursuing the use of generative AI to improve word processing, spreadsheets, and presentations with its Duet AI for Google Workspace, priced at $30 per person per month for enterprises.
Currently, Microsoft 365 Copilot is available in preview for small businesses. It may take time for Microsoft to establish Microsoft 365 Copilot as a major business. Amy Hood, Microsoft’s finance chief, stated that the growth from AI services would be gradual as organizations adopt the capabilities of Azure and Copilots like Microsoft 365 Copilot become widely available for purchase. According to analysts at Bernstein Research, the meaningful revenue opportunity for Microsoft is expected to come in CY2025.
Overall, Microsoft is poised to benefit greatly from the AI industry. According to Elevation Partner’s McNamee, the company stands to profit a lot from the AI regulatory meeting.
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