Microsoft at 50: Embracing AI and Startup Agility in Its Golden Years

Microsoft is now 50 years old

Tom Warren is a senior editor and author of Notepad, who has been covering all things Microsoft, PC, and tech for over 20 years. Fifty years ago today, Micro-Soft was founded by friends Bill Gates and Paul Allen. As the name implies, Microsoft was originally focused on microprocessors and software, and Gates and Allen created the company to develop software for the Altair 8800, an early personal computer. Founded on April 4th, 1975, Microsoft went on to strike a deal with IBM to provide software for its first PC in 1980. This became the foundation of MS-DOS, which dominated IBM-compatible PCs during the '80s. Microsoft's early success in developing software for PCs eventually led to the first version of Windows in 1985 and a dream of a PC on every desk and in every home. That early Windows GUI on top of MS-DOS quickly progressed into an even more capable operating system with the launch of Windows 95. The highly-anticipated version of Windows launched at midnight, with fans lining up at stores to get boxed copies of Windows 95 to install on their PCs. Windows 95 introduced many parts of Windows that we still use today, including the familiar desktop, File Explorer, My Documents area, and Recycle Bin. While Microsoft was improving Windows with every release, it was also developing a variety of productivity apps throughout the 1980s that would soon become the company's Office suite. Launched originally in 1989 for the Mac, Office quickly became an important productivity suite on Windows that even runs inside a web browser these days. Office and Windows are now used by billions of people every day, making Microsoft one of the most valuable tech companies in the world. Microsoft's success with Windows and Office has allowed the company to expand in many directions over the past 50 years, including the launch of the Xbox game console in 2001, the Azure cloud push in 2008, and even the Bing search engine launch in 2009. Microsoft has also experimented with a variety of hardware over the years, but its most successful device lineup has come in the form of Surface, which originally launched in 2012 alongside Windows 8. Surface has served as a vehicle to demonstrate the best of Windows and Office, and it's quickly becoming a test bed for Microsoft's AI ambitions on the PC. Microsoft's next 50 years look increasingly focused on an AI transformation it's in the middle of building toward. It has the potential to overhaul Windows, Office, Azure, and practically every business that Microsoft has built over the decades. Microsoft is celebrating its 50-year anniversary today during a special event at the company's headquarters in Redmond, Washington. The software maker will unveil new Copilot features, and we're expecting to see familiar faces from the past and present of Microsoft to reflect on the company's 50 years and the future of this tech giant.

50 Years On, Microsoft Embraces Start-Up Ideals for the Future

I've been watching Microsoft for much of its 50-year history, and I'm noticing a distinct shift in the tech giant's focus and update strategy for core products. And now, as I attend Microsoft's 50th Anniversary Event in Redmond, WA, this change is even more evident. Historically, Microsoft has released a major new Windows version every two or three years, such as Windows 95, Windows 98, and Windows XP (with some less-important versions in between), and an updated version of Office every three years or so, such as Office 2007, Office 2010, Office 2013, and so on. But that's all changing with the arrival of AI, and Copilot, in particular. Now, Microsoft is readjusting its efforts and moving much faster with updates. In other words, it's functioning like a start-up. Let me first acknowledge the obvious way that Microsoft is not like a start-up: It's got a nearly three-trillion-dollar market capitalization. However, I believe that it's exhibiting the two major characteristics of start-ups that have nothing to do with funding -- a focus on a single technology and rapid iteration. It's All About Copilot If you follow Microsoft at all, you know that Copilot is now its main focus. The company has even gone as far as to change the name of its Microsoft 365 productivity suite to Microsoft 365 Copilot. Nay, the company now uses the Copilot+ banner to classify newer PCs with neural processing units (NPUs). The flagship Windows operating system now comes with Copilot, and the AI tool is also prevalent across Microsoft's Azure cloud service, developer tools, and enterprise business software. You can't look anywhere in Microsoft's portfolio without seeing the word Copilot. CEO Satya Nadella wasn't just blowing smoke when he proclaimed that "Microsoft is now the Copilot company" at its 2023 Ignite conference. Not many years ago, Microsoft had a reputation among tech workers as being a "country club." That's no longer the case, with the company implementing more stringent review policies and layoffs as of late. Microsoft's new CEO of AI, Mustafa Suleyman, might be a major force behind this faster pace of innovation and accountability. He founded the DeepMind AI outfit that Google later acquired. And Copilot itself speeds the development process significantly, saving coders from the minutiae of code perfection. Once the Copilot fever took hold, Microsoft proceeded to release updates at a head-spinning pace. The current version of Copilot bears little (if any) resemblance to the original Bing Chat AI iteration or even to the first version of the standalone Copilot app. It has benefited from numerous feature additions, tweaks, and updates over its development. A recent Copilot blog post listed no fewer than 11 updates within the space of a few months, ranging from a Copilot macOS app to Copilot Voice and Think Deeper being generally available to free users. And just in Microsoft 365 there have been at least 16 updates in the past year (here are a few). Several features are currently in beta, including the ability to "see" what's on your screen and comment on it intelligently. Even today, on the day of the company's 50th anniversary, it announced yet more Copilot features. Of course, putting all your eggs in one basket can be risky. Changing well-established brands like Microsoft Office could backfire, and there's plenty of fear and loathing in the world for AI. Microsoft probably hopes that adding AI tools to its productivity software can help it regain some market share from Google Docs. How Can Microsoft Stay Relevant? No, Microsoft is not actually a start-up. Unlike a real start-up, the company is unlikely to go belly-up if its strategy fails. But it's impressive that a juggernaut corporation that has been around for half a century can be this nimble. If the company wants to survive another 50 years, it must continue to embrace this quality. Stay tuned for additional Copilot coverage from Microsoft's 50th Anniversary Event

Microsoft at 50: how adaptability under Nadella is paying off

When Bill Gates and Paul Allen founded the company they called Micro-Soft 50 years ago this week, it was to sell a version of the Basic computer language for the Altair, the first proto-PC. Their first product set the pattern for what was to follow. Microsoft''s fortunes soared, stagnated and soared again with the tech industry's periodic platform shifts. But the heart of its business always lay in providing developers with tools to build their applications and platforms to run them on. With a globe-spanning fleet of data centres under its control, Gates and Allen's company has come a long way from the Altair. Thanks to a well-placed early bet on generative AI, it enjoyed a notable boom as its mid-century loomed. But the outcomes of platform shifts in the tech industry are not always predictable, and it is still too soon to tell if Microsoft has seen off the potential threats from this one. Thirty years ago, when the company was at the height of its PC dominance and heading for a showdown with Washington over its anti-competitive tactics, the rise of the internet loomed as an existential threat. If developers could build their applications to run inside web browsers, as internet pioneer Netscape dreamt, then who would need to pay for Microsoft's Windows? A PC running on the Linux open-source operating system would do just as well. In the event, Microsoft squashed Netscape -- contributing to its antitrust woes. But it wasn't the web that diluted its dominance over the tech world. Instead, smartphones took centre stage, pushing PCs to the sidelines and bringing a new generation of mobile app developers to the fore. The emergence of the cloud also eroded the importance of the PCs and PC-like servers Microsoft was focused on, leaving its stock price in a protracted lull. In the event, Satya Nadella, who was elevated to the CEO seat in 2014, succeeded in breaking the company's reliance on the PC. He began by offering developers whatever tools they wanted through the cloud, including the open-source software that former chief executive Steve Ballmer had once called a cancer on the tech industry. The close alliance with OpenAI that Nadella forged in 2019 extended that run, giving Microsoft exclusive rights to offer the start-up's AI models through its cloud platform. Adaptability has been one of the hallmarks of Nadella's leadership at Microsoft -- something he has shown again as the generative AI market goes through convulsions. Despite the tie with OpenAI, the Microsoft CEO was quick to see how models like these might commoditise even the most advanced AI technology. Microsoft was one of the first to back Meta's open model, Llama, and was offering access to DeepSeek's R1 reasoning system less than two weeks after its launch. Yet it is still too early to judge the full extent of the upheaval from generative AI, or Microsoft's ability to withstand this latest disruptive storm. Like other Big Tech transitions, it is likely to open the door to new competitors and could completely overturn the way Microsoft's customers develop and run applications. Nvidia, for instance, owes part of its dominance in AI chips to its Cuda software, which makes it easier for developers to create applications that run on its hardware. As competition in AI chips starts to build, Nvidia's eyes have turned to adding more valuable software services to its portfolio. Then there is OpenAI. Its strategy has put it on a clear collision course with Microsoft. Though ChatGPT has become an accidental consumer tech giant, OpenAI's main aim has been to build the central platform for the AI age itself. If OpenAI succeeds in its dream of creating a greater-than-human level of intelligence, then all bets are probably off: It is hard to see which companies' strategies could withstand such a powerful force. But even short of that, if developers come to lean more heavily on advanced forms of AI to develop their applications, then large language models could become the new developer platform. Like the browser in the early days of the internet, that could shake Microsoft to its foundations. Other outcomes are possible, though. For now, rather than a new platform in its own right, generative AI has been an extension of the computer industry's cloud era. If that remains the case, it would continue to play to Microsoft's strengths. Since Nadella took over, in early 2014, its share price has soared tenfold, lifting its stock market value to nearly $2.8tn. There is plenty to celebrate from the first half-century.

Microsoft, turning 50, dials up Copilot actions to stay in AI game

REDMOND, Wash, April 4 (Reuters) - Thousands of people swooned in a dark conference hall that felt more like a rock concert when a Microsoft (MSFT.O), opens new tab product manager demonstrated the company's latest feature: how to sum numbers in Excel, with the click of a button. "It was literally like Mick Jagger walked out," said Yusuf Mehdi, Microsoft's consumer chief marketing officer, who started as an intern. That was more than 30 years ago. On Friday, the day Microsoft turned 50, the company's leaders and staff gathered at its Redmond headquarters to remember the software maker's glory days while trumpeting what they hope will bring it into the future: more powerful artificial intelligence. Copilot, Microsoft's AI assistant, is gaining a host of new features to make it more proactive. The version for consumers will start remembering personal facts about them. It will offer birthday reminders or support ahead of a presentation, or consumers can opt out, Mehdi said in an interview. Copilot likewise will personalize podcasts and shopping recommendations, and it will let consumers task their AI to book events for them, or send a friend a gift while checking in for guidance. "It frees you up," said Mehdi. Microsoft is hardly first to roll out action-taking or "agentic" software. As with rival systems, the AI will work best on popular sites where Microsoft has done some behind-the-scenes technical work, like with 1-800-Flowers.com and OpenTable, Mehdi said. Mehdi recalled days when Microsoft was smaller and growing. He said CEO Bill Gates could devour three books' worth of information from one day to the next, at a time when the co-founder still worked on Microsoft software. Mehdi watched Steve Ballmer, Gates' eventual successor, chant "developers, developers, developers!" in a sweat-drenched shirt to rouse a crowd into the ".net" era. Microsoft went from top of the pack to badly bruised in a high-profile lawsuit that U.S. antitrust enforcers brought against it in 1998. Years later, younger companies and startups, among them Alphabet (GOOGL.O), opens new tab and ChatGPT creator OpenAI, beat it to the punch on key AI developments. Satya Nadella, Microsoft's current CEO, is not standing still. The leader who turned Microsoft into the No. 2 cloud powerhouse challenged his executives at an internal summit this week, recalled Mehdi: "How do we rethink the way that we build the software?" Microsoft is iterating on its chatbot technology in a crowded field that includes Elon Musk's xAI and Anthropic. It has added Copilot to its heavily used productivity suites for business while giving consumers a distinctive version. "It's warm; it has that personality," said Mehdi. Some users have taken to this, while others find it asks too many questions, he said. "When we get to now be more personalized, we can start to get smarter," Mehdi said. "We're part way through that journey." Reporting By Jeffrey Dastin in Redmond, Washington; Editing by David Gregorio Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence Jeffrey Dastin Thomson Reuters Jeffrey Dastin is a correspondent for Reuters based in San Francisco, where he reports on the technology industry and artificial intelligence. He joined Reuters in 2014, originally writing about airlines and travel from the New York bureau. Dastin graduated from Yale University with a degree in history. He was part of a team that examined lobbying by Amazon.com around the world, for which he won a SOPA Award in 2022.

How Microsoft's AI chief measures consumer inroads for Copilot

REDMOND, Washington, April 4 (Reuters) - As Microsoft (MSFT.O), opens new tab CEOs past and present gathered here to celebrate the company's 50th birthday, one leader said he is targeting a particular metric's improvement to guide his strategy on artificial intelligence. Mustafa Suleyman, chief executive of Microsoft AI, said his consumer and research division is tracking the usual measures of adoption for the company's AI assistant called Copilot. These include daily and weekly active users, distribution, and usage intensity for Copilot's consumer offering, he said. But Suleyman's interest lies elsewhere. "I really, really focus the team on SSR, the rate of successful sessions," he said in an interview. In an older era when consumers gave less real-time feedback on software, the time they spent with a product -- on social media, for instance -- or the problems they could solve represented crude "proxies for quality," he said. "Now, we actually get to learn from the anonymized logs and extract the sentiment," said Suleyman, who joined Microsoft about a year ago after leading the startup Inflection AI. Suleyman was one of the only Microsoft executives other than former CEOs Bill Gates and Steve Ballmer and current CEO Satya Nadella to speak on stage at Microsoft's Friday event at its Redmond, Washington, headquarters. Suleyman said Microsoft has tasked an AI model itself to assess such sentiment and help determine Copilot chats' SSR. "Over the last four months, it's gone up dramatically, and that's what we optimize for," he said. Suleyman declined to state the rate in absolute terms or disclose other Copilot metrics. The company last fall announced a more amiable voice for its consumer Copilot and the ability to analyze web pages for users as they browse. On Friday, Microsoft demonstrated further features for Copilot: personalized podcasts, a tool to help consumers research complex queries, and eventually a look for Copilot that can be custom to each user and conversation. "I would definitely go for something that was cutesy," said Suleyman, "like a little Furby-type thing." Reporting by Jeffrey Dastin; Editing by Leslie Adler Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence Jeffrey Dastin Thomson Reuters Jeffrey Dastin is a correspondent for Reuters based in San Francisco, where he reports on the technology industry and artificial intelligence. He joined Reuters in 2014, originally writing about airlines and travel from the New York bureau. Dastin graduated from Yale University with a degree in history. He was part of a team that examined lobbying by Amazon.com around the world, for which he won a SOPA Award in 2022.

As Microsoft turns 50, Nadella sees future success built on ability to 'win the new'

Microsoft CEO Satya Nadella speaks during the Microsoft Build conference at Microsoft headquarters in Redmond, Washington, on May 21, 2024. A half-century ago, childhood friends Bill Gates and Paul Allen started Microsoft from a strip mall in Albuquerque, New Mexico. Five decades and almost $3 trillion later, the company celebrates its 50th birthday on Friday from its sprawling campus in Redmond, Washington. Now the second most valuable publicly traded company in the world, Microsoft has only had three CEOs in its history, and all of them are in attendance for the monumental event. One is current CEO Satya Nadella. The other two are Gates and Steve Ballmer, both among the 11 richest people in the world due to their Microsoft fortunes. While Microsoft has mostly been on the ascent of late, with Nadella turning the company into a major power player in cloud computing and artificial intelligence, the birthday party lands at an awkward moment. The company's stock price has dropped for four consecutive months for the first time since 2009 and just suffered its steepest quarterly drop in three years. That was all before President Donald Trump's announcement this week of sweeping tariffs, which sent the Nasdaq tumbling on Thursday and Microsoft down another 2.4%. Cloud computing has been Microsoft's main source of new revenue since Nadella took over from Ballmer as CEO in 2014. But the Azure cloud reported disappointing revenue in the latest quarter, a miss that finance chief Amy Hood attributed in January to power and space shortages and a sales posture that focused too much on AI. Hood said revenue growth in the current quarter will fall to 10% from 17% a year earlier Nadella said management is refining sales incentives to maximize revenue from traditional workloads, while positioning the company to benefit from the ongoing AI boom. "You would rather win the new than just protect the past," Nadella told analysts on a conference call. The past remains healthy. Microsoft still generates around one-fifth of its roughly $262 billion in annual revenue from productivity software, mostly from commercial clients. Windows makes up around 10% of sales. Meanwhile, the company has used its massive cash pile to orchestrate its three largest acquisitions on record in a little over eight years, snapping up LinkedIn in late 2016, Nuance Communications in 2022 and Activision Blizzard in 2023, for a combined $121 billion.

Interview: Microsoft CEO Satya Nadella on the tech giant's 50th anniversary -- and what's next

[Editor's Note: Microsoft @ 50 is a year-long GeekWire project exploring the tech giant's past, present, and future, recognizing its 50th anniversary in 2025.] Satya Nadella sees in Microsoft's history a blueprint for its future. "That very first product of ours -- that BASIC interpreter for the Altair -- I think says it all," the Microsoft CEO said in an interview with GeekWire this week, as the company prepared to mark its 50th anniversary. By developing a programming tool for one of the first personal computers, Nadella explained, Microsoft co-founders Bill Gates and Paul Allen were creating technology to help others create more technology. "That was true in '75, and that is true in '25, and that will be true, I believe, in 2050," he said. "Technologies will come and go, but the idea that this company can stay relevant by producing technology so that more and more people around the world can create more digital technology ... that, I think, is the core thread of Microsoft." Nadella is just the third person to serve as Microsoft's CEO, following Gates and Steve Ballmer -- both of whom are expected to join him for a rare joint appearance at Microsoft's Redmond headquarters Friday in recognition of the company's first half-century in business. Now in his 12th year as Microsoft's CEO, Nadella has led a resurgence of the venerable tech company, helping Microsoft find its footing in the cloud and stake its claim in the new world of artificial intelligence. Microsoft is one of the world's most valuable public companies, with a market capitalization hovering around $2.8 trillion as of this week, second only to its longtime rival and partner Apple by that measure. Leveraging its partnership with OpenAI, the company jumped out to an early lead with its GitHub Copilot coding companion. It has been aggressively rolling out AI in an effort to update its flagship franchises like Windows and Office, and offering AI tools via its Azure cloud platform. But as Gates pointed out in an interview with GeekWire, the competitive landscape is fundamentally shifting. In the past, Gates explained, the major players in tech have carved out different corners of the tech world. He cited Google in search, Microsoft in Office and Windows, and Amazon in cloud computing and retail. "Although there's some intense competition and overlap, we each have some areas of very high strength," Gates said. But now, as all of these companies race into AI, the lines are blurring, the pace is accelerating, and the battle is becoming "hyper competitive." "The pace of innovation will have to be very, very fast, despite the capital costs involved. And these tools will just improve very rapidly," said Gates, who continues to advise Nadella and Microsoft's product teams. With a tone of cautious optimism, the famously competitive and paranoid Microsoft co-founder added, "I hope Microsoft can lead the way." In addition to intense competition, challenges for Microsoft will include the massive capital expenditures that come with its AI infrastructure buildout -- expected to total $80 billion in the current fiscal year alone. Microsoft also needs to navigate its complicated partnership and investment in OpenAI, the AI pioneer best known for developing ChatGPT. Ballmer, the company's largest individual shareholder, said in an interview that he understood the pragmatic trade-off at the heart of that relationship, given Microsoft's decades of investment in its own AI research. "What Satya did with OpenAI, I think was brilliant -- and I think it's fraught with peril, but I know they know that," he said. "It's sort of a juggling act." One big question looming over all of this: Can Microsoft deliver the killer app for AI -- the defining breakthrough that cements its role in the next era of computing? There are more parallels here to the early days of Microsoft and the PC, when applications like spreadsheets and word processors opened the eyes of the industry and the public to the power of new technology. In the interview this week, Nadella said he sees signs of that same potential in tools like GitHub Copilot, Microsoft's AI-powered coding assistant, which he described as a turning point that opened his eyes to the potential of generative AI. "When I started seeing code completions is when I started believing," Nadella said. The features later expanded to include chat functionality, enabling developers to ask questions and get AI-generated answers directly in their coding environment. Then came multi-file editing, followed by AI agents capable of making changes across entire code repositories. "We are going from a pair programmer to a peer programmer," Nadella explained. "That's the type of system we now have." Nadella pointed to similar advances across Microsoft 365, where Copilot tools and agents now assist with everything from research to data analysis -- tasks that once required teams of humans or hours of manual work. Just prior to the interview this week, Nadella said, he had three customer meetings. Beforehand, he asked his Microsoft 365 Copilot Researcher agent to get him up to speed. It created comprehensive briefing documents comparable to what a human analyst would produce, from internal and external sources including Office documents, a CRM database, and the web. "It's unbelievable," Nadella said. "These are products I use all the time with high intensity. I think we're beginning to see the value, just like Excel and PowerPoint or Outlook did it back in the day." Without divulging Microsoft's product plans, Nadella offered a deeper explanation of something both he and Gates have alluded to in recent months: the need for a new type of inbox for the AI era. He described a future in which knowledge workers are supported by fleets of AI agents -- researchers, analysts, coders -- each performing tasks autonomously or in coordination with their human counterpart. In this model, users issue instructions, sometimes staying in the loop, sometimes delegating entirely -- while still needing a clear way to coordinate and manage the flow of these AI agents. That's where it starts to feel like "a new type of inbox," he said, "where the coordination of the work agents do, with us in the loop, will require new types of organizing layers." Back in 2014, when Nadella became Microsoft CEO, Ballmer encouraged him to be his own person. "In other words, don't try to please Bill Gates or anyone else," Nadella wrote in his 2017 book, Hit Refresh. In that spirit, Nadella has brought his own global perspective and personality to the role -- including his longtime love of poetry. In an interview in 2017, after his book's release, I asked Nadella to cite a line of poetry that he thought best described the future at that time. He quoted a line from Vijay Seshadri's Imaginary Number: "The soul, like the square root of minus one, is an impossibility that has its uses." Nadella said at the time that the line captured the force inside us "that seeks out the unimaginable, that gets us up to solve the impossible." These days, the line also conjures up images of quantum technologies, a field in which Microsoft recently claimed a breakthrough that it says will advance the world beyond traditional binary computing, promising to ultimately help solve some of the world's most difficult problems. So I asked this week, is there another line of poetry that Nadella would cite in 2025 to reflect his feelings about Microsoft, the industry, or the future? This time, Nadella referenced one of his all-time favorite lines, from the mystical Austrian poet Rainer Maria Rilke, who wrote that "the future enters into us, in order to transform itself in us, long before it happens." Nadella called this "a beautiful thing" for technology builders -- the people for whom Microsoft has been making technology for five decades now. To make the future a reality, first you have to live it. And that, the Microsoft CEO said, "is probably the best 'builder' line that I've ever heard." Watch GeekWire's interview with Microsoft CEO Satya Nadella above. Sponsor Post Accenture proudly joins GeekWire in recognizing Microsoft's 50th anniversary, marking over 35 years as a trusted partner and change driver. As the 2024 Partner of the Year in Business Transformation for Copilot, our unique alliance with Microsoft and Avanade positions us to reimagine the industry and reinvent the future through the revolutionary impact of AI. Together, we are partners in change. 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Gates, Ballmer, Nadella and Copilot: Microsoft CEOs past and present engage in podcast chat with AI

Maybe the fourth CEO of Microsoft will be some form of AI. Until then, artificial intelligence is left to serve as "host" in a conversation among the three men who have held the top job at the tech giant. As part of the festivities around Microsoft's 50th anniversary, current CEO Satya Nadella reunited with Microsoft co-founder Bill Gates and former CEO Steve Ballmer for a podcast-style discussion featuring the company's Copilot personal AI assistant. "I want you to ask a lot of sharp, playful questions. Make it feel conversational," Nadella told Copilot (playing through his phone on the table in front of him). "Feel free to get involved and opinionated yourself on our answers." The AI kicked things off by asking Ballmer about the most thrilling tech battle or competition he could remember, and what he learned from it. "It had to be the competition with IBM, to kind of body slam them, if you will, in the operating systems business," Ballmer said. "They were the big bad machine of years past ... and that was sort of a fight for all that essentially came afterward. It was scary, it was a lot of fun, and it's not the last battle like that Microsoft will face, I think." Copilot moved seamlessly between the three, reacting in a natural voice to their answers and dealing with slight interruptions here and there, as it's designed to do. "I've got a playful one for Bill," the AI said at one point. "If you could go back in time and give your younger self one piece of advice at Microsoft's early days, what would it be?" After discussing how he had to learn to manage people and build teams with diverse skill sets, Gates pivoted to a reflection on Microsoft's antitrust battles. "I might tell my younger self, 'Watch out for the government. You might have a little bit of a tussle with them,'" he said. "I didn't anticipate that. I was pretty naive about not engaging in Washington, D.C., as soon as I should have." Nadella shared the finale of the discussion with a video he posted on social media (above). He asked Copilot to wrap things up with an "AI roast" of each CEO. The AI did its best to rib Ballmer about his signature high-energy enthusiasm and Gates about whether AI could be intimidated by the co-founder's intense thinking face. "It's like it's waiting for a blue-screen moment," Copilot said, as Nadella cracked up. Copilot finished with Nadella, asking the CEO if he could envision AI running things at Microsoft while he sat back and enjoyed the ride. Nadella said if AI can perform as well as his favorite cricket player, that's the day it can run the show. Copilot signed off by saying "cheers" to all three, and Gates got in the last human word. "Cheers," he said. "Whatever that means to an AI. Does it drink?"

Microsoft 50th Anniversary Copilot event live -- all the latest AI news as it happens and a look back at Windows, Xbox and the company's wildest moments

Microsoft is celebrating its 50th birthday with something special -- an anniversary Copilot Event that takes place today at 9:30am PT / 12:30pm ET / 5:30pm BST. While we're expecting plenty of Microsoft looking back into its great (and sometimes weird) history, we're anticipating a bunch of new Copilot upgrades to be announced. To kick off the party, I'd like to do something a little different. I'll be sharing some of my favorite moments from Microsoft's history (for better and for worse), while covering every single Copilot AI announcement as it happens. In fact, we're actually on the ground at this special event, so expect some exclusive coverage from us -- including (maybe) hands-on experiences with what's announced! So whether you're here for the memories of Clippy, Zune, Xbox or playing 3D Pinball on the library computers (I see you), or seeing how Copilot could be more helpful in the future, join us on our journey back (and forward) through time.

Microsoft at 50: From startup to Seattle standout

The latest: As Microsoft celebrates its anniversary, the company is betting big on AI, cloud infrastructure and doubling down on philanthropic giving. Behind the scenes: The company is thanking Puget Sound as part of its anniversary with increased philanthropic donations, including volunteer hours and $50,000 grants to 50 local organizations, Jane Broom of Microsoft Philanthropies told Axios in an email. Flashback: Microsoft set itself apart early on by focusing on software, not hardware, becoming the go-to provider of operating systems for personal computers. Yes, but: Microsoft's growth hasn't been without missteps, including the flop of iPod competitor Zune and the failure of its Kin and Windows phones. What they're saying: Microsoft is still reinventing itself, said Margaret O'Mara, a University of Washington history professor and the author "The Code: Silicon Valley and the Remaking of America".

Microsoft 50th anniversary event: How to watch live

Microsoft celebrates 50 years with an AI-centered party. Credit: Matthias Balk / picture alliance via Getty Images Microsoft turns the big 5-0 today (April 4), and the company is kicking off the celebration with a live Copilot event, rumored to include a suite of new announcements for the AI tool, as well as a nostalgic look back on the tech giant's storied history. Windows fans can expect an appearance from Copilot CEO Mustafa Suleyman -- and select deals on Microsoft products -- but the real star of the show is the iconic Windows 95 logo, back in all its glory to honor Microsoft's more humble beginnings. Head over to Microsoft's X page for a another festive birthday surprise. This Tweet is currently unavailable. It might be loading or has been removed. The live event will start at 12:30pm ET (9:30am PT).

Microsoft has adapted to change for 50 years. What's next?

In the spring of 1975, a college dropout and his childhood friend launched a tiny software company in Albuquerque with a singular mission: put a computer on every desk and in every home. Five decades later, Microsoft stands as a survivor of tech's brutal evolutionary cycles, transforming from a scrappy BASIC interpreter vendor to an operating system kingpin, an internet also-ran, a stagnating giant, and now a cloud computing and AI player worth almost $3 trillion. While many tech giants have risen and fallen -- from Digital Equipment Corporation to Yahoo to BlackBerry -- Microsoft has navigated multiple technological revolutions by making strategic pivots and occasionally cannibalizing its own successful products. This pattern of reinvention, occurring roughly once per decade, reveals insights about institutional adaptability that extend beyond the tech sector. Microsoft's instinct for reinvention was evident from its earliest days. When Bill Gates and Paul Allen founded Microsoft, they bet on software as the driver of the computing revolution while most tech companies went all-in on hardware. "Paul came to Bill and said, 'Okay, let's just go write all the software this thing will ever need,'" said Steve Ballmer, Microsoft's former CEO, in a recent interview with Geekwire. This software-first vision positioned Microsoft as the connective tissue between hardware platforms rather than tying its fortunes to any particular machine. The first major self-disruption came with the transition from MS-DOS to Windows. Rather than protect its near-monopoly in command-line operating systems, Gates invested heavily in developing Windows. The gamble was enormous -- Windows 1.0 was widely considered a disappointment -- but Microsoft persisted. By the mid-1990s, Windows had thoroughly cannibalized the DOS business that had built the company. Another significant pivot came in 1995, when Gates issued his "Internet Tidal Wave" memo. Despite Windows 95's imminent launch, Gates recognized that the nascent World Wide Web threatened to make the operating system irrelevant. Microsoft's initial response was sluggish -- Netscape, the dominant browser startup co-founded by Mosaic creator Marc Andreessen, was quickly becoming the face of the internet era -- but the subsequent pivot to everything internet was comprehensive. "We were able to embrace it with everything we did," said current CEO Satya Nadella in an interview on the Dwarkesh podcast in February, "whether it was HTML in Word or building a new thing called the browser ourselves and competing for it, and then building a web server on our server stack." The pivot worked, but this period also revealed that even Microsoft couldn't predict all aspects of technological disruption correctly. "We missed what turned out to be the biggest business model on the web," said Nadella, "because we all assumed the web is all about being distributed. Who would have thought that search would be the biggest winner?" This blind spot allowed Google to emerge as Microsoft's most formidable competitor and contributed to a period of stagnation in the 2000s. Under Ballmer's leadership, Microsoft continued generating enormous profits but missed key technological shifts, most notably the mobile revolution, something Ballmer has acknowledged. "I would have stopped the project that was Cairo three or four years earlier," said Ballmer in the Geekwire interview, referring to what became Windows Vista. "We had basically a team of thousands tied up for eight years to put together a release that wasn't as good as the one that preceded it." Microsoft's cloud transformation began in the later Ballmer years but accelerated dramatically under Nadella. The shift to cloud computing required Microsoft to essentially abandon the software licensing model that had driven its profits for decades. "In terms of ascendance, it's got to be the move to the cloud," said Ballmer. "We had Office up and running. We had Azure. It's not like things were in great shape, but we had some momentum." Nadella shifted Microsoft's approach. Within weeks of becoming CEO in 2014, he released Office for iPad, ending the company's strategy of using Office as exclusive leverage for Windows. He then accelerated Microsoft's cloud investments, pouring billions into Azure data centers. The market responded -- Microsoft's value increased more than tenfold under Nadella's leadership in his first ten years at the helm. Today, Microsoft is attempting another reinvention with artificial intelligence. At first, the company's $13 billion partnership with OpenAI and integration of AI across its product suite seemed to position Microsoft ahead of competitors. Wall Street initially rewarded this vision, but recent developments suggest this transformation may not be proceeding smoothly. The company has quietly pulled back on data center commitments, tensions with OpenAI have surfaced, and Microsoft's stock has underperformed other tech giants despite its early AI leadership. It's still early days, though. Whether Microsoft can adapt to the AI era as successfully as it did to previous technological shifts remains an open question -- one that could determine if the company's next 50 years will be as notable as its first.

Microsoft just turned 50, can its dominance last another

Table of Contents Table of Contents The founding - 1975 MS-DOS to Windows, to Office - 1980 - 1989 Evolution of Windows, Xbox - 1990 - 2010 Branching out - 2010s More than just an operating system - 2020s Microsoft is officially half a century old and what a half a century it's been. It went from being a small scale software company to dominating the world of personal computers, to today where it's worth over $3 trillion -- or at least it was until some recent tariff shenanigans. It's not the only name in the game any more, with Google's Android platform the most popular operating system on devices, but Microsoft's Windows still forms the backbone of the professional and gaming worlds, and that's not the only pie it has its fingers in. From trying to wrestle control of the AI hype train, to endeavours in Quantum computing, Microsoft is looking to form the zeitgeist of the next 50 years. Let's take a look at some of its big wins over the past few decades, and what it might do in to secure some more in the years to come. Recommended Videos The founding - 1975 Bill Gates and partner Paul Allen founded Micro-Soft in 1975. Although the company name was a portmanteau of Microprocessor and Software, the pair focused on software development for the Altair 8800 personal computer. They found immediate success and secured a contract with the Altair's developer, Micro Instrumentation and Telemetry Systems, but it wasn't for a few more years that Microsoft would begin work on some of its most iconic software products. MS-DOS to Windows, to Office - 1980 - 1989 The next two decades went swimmingly for Microsoft. It secured a contract to provide MS-DOS version 1.0 and other Microsoft software products to IBM for its Personal Computer. Also included on the new system was Microsoft's 1979 text-based RPG, Microsoft Adventure. Sales of MS-DOS quickly expanded as other PC manufacturers and Microsoft began work on the graphihcal interface for MS-DOS that would soon become the first version of Windows. In 1985 Gates showed off Windows for the first time, describing it as "unique software designed for the serious PC user." In reality, Windows made the user experience with a PC far more straightforward, as well as expanding MS-DOS capabilities, such as running multiple unrelated programs simultaneously. Throughout the 1980s Microsoft also introduced a number of its other iconic software applications. In 1983, it released Word, following up with Excel in 1985 (on the Mac). Evolution of Windows, Xbox - 1990 - 2010 Microsoft's Windows went on to transition through a number of versions throughout the 90s and 2010s -- some hits, some misses. It also introduced the Xbox console in the early 200s, and continued its development throughout the decades. The combination of a popular home gaming consoles and the dominant PC gaming platform in Windows, made Microsoft an absolute cornerstone of gaming. The continued developments of important gaming software and APIs, like DirectX, makes Microsoft still one of the most important companies in gaming today -- even if it never did get us that Freelancer sequel I so wanted. Branching out - 2010s The 2010s were an interesting period for Microsoft. It ended up launching its most popular operating system in years in Windows 10, but also tried and failed, and then tried and succeeded in the tablet space with its Surface line. Steve Ballmer crashed out as CEO after shouting about developers and sweating all over the place, and Microsoft started buying up customer-facing software and services like Skype and Linkedin. Office went from being a Windows exclusive to being software you could use almost anywhere, with web versions bridging any lingering compatibility gaps. In gaming, Microsoft's Xbox consoles continued doing well enough and it paid a couple of billion to some Swedish guy. Microsoft still makes hundreds of millions of dollars a year from Minecraft alone, so it was probably a smarter purchase than it seemed at the time. More than just an operating system - 2020s In the 2020s, Microsoft joined a range of other major tech companies in not only looking to new avenues of revenue, but also refocusing for the future. It began the decade with the launch of Windows 11, which while successful has pushed for ever greater user tracking, advertising integration, and pushing towards more of a software as a service design. Then the AI boom began and the world has been riding that wave ever since. After being blindsided by ChatGPT's capabilities and subsequent success, Microsoft managed to win the bidding war to secure its use in creating Copilot which it's now shoving into everything. Windows has it, all of Microsoft's first-party apps have it, and Bing became equal parts chatbot and search engine overnight. Copilot+ PCs and laptops followed, although nobody liked the Recall idea. And that's where we find ourselves today. Microsoft is bigger than ever, but it feels more dispersed. The Windows platform still forms the backbone of professional industries and home gaming, but the traditional desktop PC and laptop doesn't feel quite as ubiquitous as it once was. The pandemic might have driven everyone back into their home offices, but today Chromebooks, MacBooks, and a wider-range of ARM-powered devices mean Microsoft isn't the monolith it once was. AI is definitely where Microsoft sees the future going and it's putting its full weight behind it. Enough so that the last few CEOs were happy to be roasted by one: But is that where it will really make its next impact? Even more so than with Windows, the AI landscape is saturated with competition and there are many questions about how much farther this gravy trail has to roll.

Microsoft's next 50 years are all about making AI feel useful

Microsoft might be turning 50, but its eyes are still firmly fixed on the future. And that future, by its own estimation, has everything to do with AI. At its 50th anniversary event on Friday, Microsoft's top brass took the stage to talk about what the company has in store for the future of its iconic operating system. The answer? Copilot. A lot of Copilot. Microsoft had a lot to tell us about the future of Copilot, and the biggest takeaway is that it's getting a lot more personal. "Copilot will understand you in the context of your life, and show up, on your terms, in the right way at the right time," said Mustafa Suleyman, Executive Vice President and CEO of Microsoft AI in a statement. "This is far richer, more dynamic, supportive and emergent than any software we've seen before. It's a new kind of relationship with technology, a new era." What that means, specifically, is more customization but also more sophistication, and perhaps the most exciting example of that is Copilot's glow up in the AI agent department. Microsoft announced that starting soon, Copilot will be able to act on your behalf to browse the web and carry out tasks like booking event tickets, making dinner reservations, and even buying gifts and other items. Microsoft says this Copilot feature, dubbed Copilot Actions, will "work with most websites across the web," and initial partners include 1-800-Flowers.com, Booking.com, Expedia, Kayak, OpenTable, Priceline, Tripadvisor, Skyscanner, Viator, and Vrbo. How well Copilot performs in those tasks remains to be seen, but ascending into a more fully-formed AI agent is a promising sign for anyone (like myself) who wants chatbots to make my life more tedious. And the personalization doesn't stop there. Microsoft is also working to give Copilot more of a "memory" in an effort to make it more of an "AI companion." That means remembering your inputs to recall things like your favorite food, what movies you like, birthdays, and more. Microsoft hopes that the glut of personal data will help Copilot make better suggestions and even become more proactive so that it can remind you about tasks and help build your calendar without you asking. That's a big ask from a privacy perspective, but Microsoft says users will be able to tailor their security and privacy settings to control what data is remembered and what remains untouched -- users will also be able to opt out entirely, according to the company. Whether Copilot users will be made abundantly aware of those controls is another question entirely, but it's nice to know they exist. If there's one thing that's clear about Microsoft's anniverary annoucements regarding Copilot, it's that it still very much envisions its ChatGPT-powered AI as the centerpiece of future Windows functionality. Slowly but surely, Microsoft has focused on making Copilot more independent. While AI agents aren't exactly singularity territory, they are by far the most promising and marketable form of generative AI I've seen so far. I, like many, long for a world where I can actually entrust AI to carry out tasks on my behalf -- read my email, set my calendar, or order my Uber -- but unfortunately, it feels like we're not quite there yet. As advanced as Copilot or ChatGPT may be, they're imperfect technologies, which makes handing over the keys to them completely a more stressful experience than it ought to be. I have no doubt that tools like Copilot could very well be the future of Microsoft and the main lens by which we interact with its Windows operating system, but there's still a lot of proving to be done. And if Microsoft is going to make the next 50 years of Windows as iconic as the last, then Copilot is going to have to ace its flight test or crash and burn trying.

Tech titan turns 50: Microsoft in numbers

Created in 1975 by childhood friends Bill Gates and Paul Allen, Microsoft today is one of the five Big Tech titans. Ahead of its 50-year anniversary on April 4, a look back in numbers at some highs and lows: 365 Microsoft Office, the company's suite of software products containing Word, PowerPoint and Excel, was launched in 1989 and hit shelves a year later. Over time it became the go-to home computer software across the world. Two decades later the company rebranded it to the cloud-based Office 365, with a new licensing structure and payment via an online subscription-based system. Released on the market in 2011, it also allowed consumers to pick and choose, allowing those not using Microsoft's operating system (Windows) -- Mac users for example have MacOS -- to buy and run 365 products. The number 365, now synonymous with the company, underscored dynamism and flexibility, with products available anywhere, 365 days a year. In Microsoft's latest quarterly figures published on January 29, the company said the number of users, or "consumer subscribers," of Office 365 was 86.3 million at the end of December 2024. 95% Microsoft's web browser Internet Explorer, first launched in 1995, reached its peak dominance of the market share in the early 2000s when it was the browser for up to 95% of world users, according to the web analytics site, WebSideStory. But the browser was beleaguered with security issues, even prompting PC World magazine to dub version 6 as the "least secure software on the planet." Internet Explorer's market share was progressively battered down as users turned increasingly to other browsers such as Google Chrome and Firefox. In 2022, Microsoft finally retired Internet Explorer, replacing it with Microsoft Edge, which has a market share of 5.3%, far behind Chrome at 66.3% and Safari with 18%, according to Statcounter data for February 2025. Three months While the first fifty years of Microsoft is by and large a phenomenal success story, there have been a fair share of flops along the way too. Chief among those was the Kin, Microsoft's foray into social networking on mobile phones. In development for two years, it launched on US market in 2010, sold by Verizon, but after only around three months the provider pulled it off the shelves due to dreadful sales. The planned European launch was then scrapped and Kin took its place in the annals of Microsoft's worst flops in history. Here, it joined other now-forgotten aborted products such as Zune, a portable music player snuffed out by the iPod, or Portrait, an early failed version of Skype. 70.5% Microsoft's flagship operating system, Windows, ran on 70.5% of the world's desktop computers in February 2025, far ahead of Apple Mac's OS X (15.8%), according to StatCounter. This dominance over global PCs has contributed to Microsoft -- like the other four Big Tech companies Google, Apple, Facebook and Amazon -- drawing scrutiny from US and European antitrust investigators, sometimes resulting in hefty fines. $2,900 billion With Apple and Nvidia, Microsoft has one of the world's largest market capitalizations at around $2.9 trillion, as of the end of March. $80 billion One thing sure to feature in Microsoft's story to come is artificial intelligence. It has made massive investments in the sector, one of the first tech giants to do so, and has earmarked $80 billion for AI between July 2024 and July 2025. One of its key partnerships has been with OpenAI, the creator of ChatGPT. However, the emergence in 2025 of China's AI startup model DeepSeek, trained at a fraction of the cost of OpenAI's systems, has stunned Silicon Valley. Another area of key growth has been Microsoft's cloud-computing arm Azure, which has a market share of 21%, second behind Amazon Web Services (30%), according to Synergy Research Group.

Computer pioneer Microsoft turns 50 in the age of AI

Microsoft has been at the heart of computing for half a century, becoming a tech stalwart almost taken for granted as lifestyles embraced the internet. As the company, founded with a vision of putting computers in every home and office, celebrates its 50th anniversary on Friday, it is looking to boost its fortunes by being a leader in the fast-developing field of artificial intelligence (AI). "From a storytelling standpoint, they've been a boring company and a boring stock," eMarketer analyst Jeremy Goldman said of the Redmond, Washington-based behemoth. "It's funny because they have a $2.9 trillion market cap, and that is huge," he continued, referring to Microsoft's value based on its share price. The only company with a higher market cap is iPhone maker Apple. Cloud computing is fueling Microsoft's revenue with the help of its ubiquitous Office software, now hosted online and no longer released in boxes of floppy disks or CDs. "It's not a very sexy infrastructure, but it's a very valuable one," Goldman said of Microsoft's data centers and software at the foundation of its cloud-computing platform. Amazon Web Services (AWS) and Google are Microsoft's cloud-computing rivals. 'Micro-Soft' Clouds were the stuff of weather forecasts rather than computing when Bill Gates and childhood friend Paul Allen founded what was first called "Micro-Soft" in 1975. They launched the MS-DOS operating system that became known as "Windows" and went on to run most of the world's computers. Microsoft Office programs including Word, Excel and PowerPoint became standard business tools, even fending off free Google Docs software. "Microsoft had a lot of businesses that were weaker and challenged -- the perfect example is Office," Goldman said. "That Office is still such a meaningful business for them says something about the way they were able to innovate." Current chief executive Satya Nadella championed a Microsoft shift to making its software available on just about any device as subscription services hosted in the cloud. The move likely saved Microsoft from seeing free services like Google Docs reduce their market share to zero, the analyst said. 'Achilles heel' Microsoft remains in the shadow of other US tech giants when it comes to offerings such as social networks, smartphones and the AI-infused digital assistants that have become woven into people's lives, but it is not for lack of effort. Microsoft introduced Xbox video game consoles in 2001, steadily building up its stable of studios, making the blockbuster buy of Activision Blizzard two years ago and adding an online subscription service for players. And despite its launch of the Bing search engine in 2009, Google still dominates that market. Microsoft in 2016 bought career-focused social network LinkedIn, which has seen steady growth. But it still lacks the reach of Meta's Facebook or Instagram, or the influence of Elon Musk's X (formerly Twitter). Microsoft is among those in the running to buy TikTok, which faces a ban in the United States if not sold by China-based ByteDance. While Apple and Google have excelled at making it easy or even fun for users to engage with products, that has been an "Achilles heel" for Microsoft, according to Goldman. "It's never been a strong suit of theirs," the analyst said. Mobile miss Known for a focus on sales rather than innovation, Steve Ballmer, who followed Gates as chief of Microsoft from 2000 to 2013, has been faulted for missing the shift to smartphones and other mobile computing devices. His successor, Nadella, took over with a vow to make Microsoft a "mobile-first, cloud-first" company and Microsoft has since invested heavily in AI, taking a stake in ChatGPT-maker OpenAI and building the technology into offerings including Bing, though to little avail. Behind in AI? Independent analyst Jack Gold believes that despite those investments and efforts, Microsoft lags in AI because it lacks its own chips or foundation model. "They are not as advanced in that as AWS and Google, so they're still playing a little bit of catchup in that space," Gold said of Microsoft. Google Cloud's revenue growth is on pace to overtake Microsoft's Azure for second place in the market in two years, the analyst said.

Computer pioneer Microsoft turns 50 in the age of AI

San Francisco (AFP) - Microsoft has been at the heart of computing for half a century, becoming a tech stalwart almost taken for granted as lifestyles embraced the internet. As the company, founded with a vision of putting computers in every home and office, celebrates its 50th anniversary on Friday, it is looking to boost its fortunes by being a leader in the fast-developing field of artificial intelligence (AI). "From a storytelling standpoint, they've been a boring company and a boring stock," eMarketer analyst Jeremy Goldman said of the Richmond, Washington-based behemoth. "It's funny because they have a $2.9 trillion market cap, and that is huge," he continued, referring to Microsoft's value based on its share price. The only company with a higher market cap is iPhone maker Apple. Cloud computing is fueling Microsoft's revenue with the help of its ubiquitous Office software, now hosted online and no longer released in boxes of floppy disks or CDs. "It's not a very sexy infrastructure, but it's a very valuable one," Goldman said of Microsoft's data centers and software at the foundation of its cloud-computing platform. Amazon Web Services (AWS) and Google are Microsoft's cloud-computing rivals. 'Micro-Soft' Clouds were the stuff of weather forecasts rather than computing when Bill Gates and childhood friend Paul Allen founded what was first called "Micro-Soft" in 1975. They launched the MS-DOS operating system that became known as "Windows" and went on to run most of the world's computers. Microsoft Office programs including Word, Excel and PowerPoint became standard business tools, even fending off free Google Docs software. "Microsoft had a lot of businesses that were weaker and challenged -- the perfect example is Office," Goldman said. "That Office is still such a meaningful business for them says something about the way they were able to innovate." Current chief executive Satya Nadella championed a Microsoft shift to making its software available on just about any device as subscription services hosted in the cloud. The move likely saved Microsoft from seeing free services like Google Docs reduce their market share to zero, the analyst said. 'Achilles heel' Microsoft remains in the shadow of other US tech giants when it comes to offerings such as social networks, smartphones and the AI-infused digital assistants that have become woven into people's lives, but it is not for lack of effort. Microsoft introduced Xbox video game consoles in 2001, steadily building up its stable of studios, making the blockbuster buy of Activision Blizzard two years ago and adding an online subscription service for players. And despite its launch of the Bing search engine in 2009, Google still dominates that market. Microsoft in 2016 bought career-focused social network LinkedIn, which has seen steady growth. But it still lacks the reach of Meta's Facebook or Instagram, or the influence of Elon Musk's X (formerly Twitter). Microsoft is among those in the running to buy TikTok, which faces a ban in the United States if not sold by China-based ByteDance. While Apple and Google have excelled at making it easy or even fun for users to engage with products, that has been an "Achilles heel" for Microsoft, according to Goldman. "It's never been a strong suit of theirs," the analyst said. Mobile miss Known for a focus on sales rather than innovation, Steve Ballmer, who followed Gates as chief of Microsoft from 2000 to 2013, has been faulted for missing the shift to smartphones and other mobile computing devices. His successor, Nadella, took over with a vow to make Microsoft a "mobile-first, cloud-first" company and Microsoft has since invested heavily in AI, taking a stake in ChatGPT-maker OpenAI and building the technology into offerings including Bing, though to little avail. Behind in AI? Independent analyst Jack Gold believes that despite those investments and efforts, Microsoft lags in AI because it lacks its own chips or foundation model. "They are not as advanced in that as AWS and Google, so they're still playing a little bit of catchup in that space," Gold said of Microsoft. Google Cloud's revenue growth is on pace to overtake Microsoft's Azure for second place in the market in two years, the analyst said.

Microsoft, Turning 50, Dials up Copilot Actions to Stay in AI Game

REDMOND, Wash (Reuters) -Thousands of people swooned in a dark conference hall that felt more like a rock concert when a Microsoft product manager demonstrated the company's latest feature: how to sum numbers in Excel, with the click of a button. "It was literally like Mick Jagger walked out," said Yusuf Mehdi, Microsoft's consumer chief marketing officer, who started as an intern. That was more than 30 years ago. On Friday, the day Microsoft turned 50, the company's leaders and staff gathered at its Redmond headquarters to remember the software maker's glory days while trumpeting what they hope will bring it into the future: more powerful artificial intelligence. Copilot, Microsoft's AI assistant, is gaining a host of new features to make it more proactive. The version for consumers will start remembering personal facts about them. It will offer birthday reminders or support ahead of a presentation, or consumers can opt out, Mehdi said in an interview. Copilot likewise will personalize podcasts and shopping recommendations, and it will let consumers task their AI to book events for them, or send a friend a gift while checking in for guidance. "It frees you up," said Mehdi. Microsoft is hardly first to roll out action-taking or "agentic" software. As with rival systems, the AI will work best on popular sites where Microsoft has done some behind-the-scenes technical work, like with 1-800-Flowers.com and OpenTable, Mehdi said. Mehdi recalled days when Microsoft was smaller and growing. He said CEO Bill Gates could devour three books' worth of information from one day to the next, at a time when the co-founder still worked on Microsoft software. Mehdi watched Steve Ballmer, Gates' eventual successor, chant "developers, developers, developers!" in a sweat-drenched shirt to rouse a crowd into the ".net" era. Microsoft went from top of the pack to badly bruised in a high-profile lawsuit that U.S. antitrust enforcers brought against it in 1998. Years later, younger companies and startups, among them Alphabet and ChatGPT creator OpenAI, beat it to the punch on key AI developments. Satya Nadella, Microsoft's current CEO, is not standing still. The leader who turned Microsoft into the No. 2 cloud powerhouse challenged his executives at an internal summit this week, recalled Mehdi: "How do we rethink the way that we build the software?" Microsoft is iterating on its chatbot technology in a crowded field that includes Elon Musk's xAI and Anthropic. It has added Copilot to its heavily used productivity suites for business while giving consumers a distinctive version. "It's warm; it has that personality," said Mehdi. Some users have taken to this, while others find it asks too many questions, he said. "When we get to now be more personalized, we can start to get smarter," Mehdi said. "We're part way through that journey." (Reporting By Jeffrey Dastin in Redmond, Washington; Editing by David Gregorio)

Computer pioneer Microsoft turns 50 in the age of AI

Microsoft, having completed 50 years since its founding, aims to lead in AI while leveraging cloud computing and Office software. However, despite its $2.9 trillion value, it lags behind rivals like Apple, Google, and Amazon in areas like social networks, mobile, and AI, though it remains a tech powerhouse.Microsoft has been at the heart of computing for half a century, becoming a tech stalwart almost taken for granted as lifestyles embraced the internet. As the company, founded with a vision of putting computers in every home and office, celebrates its 50th anniversary on Friday, it is looking to boost its fortunes by being a leader in the fast-developing field of artificial intelligence (AI). "From a storytelling standpoint, they've been a boring company and a boring stock," eMarketer analyst Jeremy Goldman said of the Richmond, Washington-based behemoth. "It's funny because they have a $2.9 trillion market cap, and that is huge," he continued, referring to Microsoft's value based on its share price. The only company with a higher market cap is iPhone maker Apple. Cloud computing is fueling Microsoft's revenue with the help of its ubiquitous Office software, now hosted online and no longer released in boxes of floppy disks or CDs. "It's not a very sexy infrastructure, but it's a very valuable one," Goldman said of Microsoft's data centers and software at the foundation of its cloud-computing platform. Amazon Web Services (AWS) and Google are Microsoft's cloud-computing rivals. 'Micro-Soft' Clouds were the stuff of weather forecasts rather than computing when Bill Gates and childhood friend Paul Allen founded what was first called "Micro-Soft" in 1975. They launched the MS-DOS operating system that became known as "Windows" and went on to run most of the world's computers. Microsoft Office programs including Word, Excel and PowerPoint became standard business tools, even fending off free Google Docs software. "Microsoft had a lot of businesses that were weaker and challenged -- the perfect example is Office," Goldman said. "That Office is still such a meaningful business for them says something about the way they were able to innovate." Current chief executive Satya Nadella championed a Microsoft shift to making its software available on just about any device as subscription services hosted in the cloud. The move likely saved Microsoft from seeing free services like Google Docs reduce their market share to zero, the analyst said. Achilles heel Microsoft remains in the shadow of other US tech giants when it comes to offerings such as social networks, smartphones and the AI-infused digital assistants that have become woven into people's lives, but it is not for lack of effort. Microsoft introduced Xbox video game consoles in 2001, steadily building up its stable of studios, making the blockbuster buy of Activision Blizzard two years ago and adding an online subscription service for players. And despite its launch of the Bing search engine in 2009, Google still dominates that market. Microsoft in 2016 bought career-focused social network LinkedIn, which has seen steady growth. But it still lacks the reach of Meta's Facebook or Instagram, or the influence of Elon Musk's X (formerly Twitter). Microsoft is among those in the running to buy TikTok, which faces a ban in the United States if not sold by China-based ByteDance. While Apple and Google have excelled at making it easy or even fun for users to engage with products, that has been an "Achilles heel" for Microsoft, according to Goldman. "It's never been a strong suit of theirs," the analyst said. Mobile miss Known for a focus on sales rather than innovation, Steve Ballmer, who followed Gates as chief of Microsoft from 2000 to 2013, has been faulted for missing the shift to smartphones and other mobile computing devices. His successor, Nadella, took over with a vow to make Microsoft a "mobile-first, cloud-first" company and Microsoft has since invested heavily in AI, taking a stake in ChatGPT-maker OpenAI and building the technology into offerings including Bing, though to little avail. Behind in AI? Independent analyst Jack Gold believes that despite those investments and efforts, Microsoft lags in AI because it lacks its own chips or foundation model. "They are not as advanced in that as AWS and Google, so they're still playing a little bit of catchup in that space," Gold said of Microsoft. Google Cloud's revenue growth is on pace to overtake Microsoft's Azure for second place in the market in two years, the analyst said.

Microsoft, turning 50, dials up Copilot actions to stay in AI game

Copilot, Microsoft's AI assistant, is gaining a host of new features to make it more proactive. The version for consumers will start remembering personal facts about them. It will offer birthday reminders or support ahead of a presentation, or consumers can opt out, Mehdi said in an interview.Thousands of people swooned in a dark conference hall that felt more like a rock concert when a Microsoft product manager demonstrated the company's latest feature: how to sum numbers in Excel, with the click of a button. "It was literally like Mick Jagger walked out," said Yusuf Mehdi, Microsoft's consumer chief marketing officer, who started as an intern. That was more than 30 years ago. On Friday, the day Microsoft turned 50, the company's leaders and staff gathered at its Redmond headquarters to remember the software maker's glory days while trumpeting what they hope will bring it into the future: more powerful artificial intelligence. Copilot, Microsoft's AI assistant, is gaining a host of new features to make it more proactive. The version for consumers will start remembering personal facts about them. It will offer birthday reminders or support ahead of a presentation, or consumers can opt out, Mehdi said in an interview. Copilot likewise will personalize podcasts and shopping recommendations, and it will let consumers task their AI to book events for them, or send a friend a gift while checking in for guidance. "It frees you up," said Mehdi. Microsoft is hardly first to roll out action-taking or "agentic" software. As with rival systems, the AI will work best on popular sites where Microsoft has done some behind-the-scenes technical work, like with 1-800-Flowers.com and OpenTable, Mehdi said. Mehdi recalled days when Microsoft was smaller and growing. He said CEO Bill Gates could devour three books' worth of information from one day to the next, at a time when the co-founder still worked on Microsoft software. Mehdi watched Steve Ballmer, Gates' eventual successor, chant "developers, developers, developers!" in a sweat-drenched shirt to rouse a crowd into the ".net" era. Microsoft went from top of the pack to badly bruised in a high-profile lawsuit that U.S. antitrust enforcers brought against it in 1998. Years later, younger companies and startups, among them Alphabet and ChatGPT creator OpenAI, beat it to the punch on key AI developments. Satya Nadella, Microsoft's current CEO, is not standing still. The leader who turned Microsoft into the No. 2 cloud powerhouse challenged his executives at an internal summit this week, recalled Mehdi: "How do we rethink the way that we build the software?" Microsoft is iterating on its chatbot technology in a crowded field that includes Elon Musk's xAI and Anthropic. It has added Copilot to its heavily used productivity suites for business while giving consumers a distinctive version. "It's warm; it has that personality," said Mehdi. Some users have taken to this, while others find it asks too many questions, he said. "When we get to now be more personalized, we can start to get smarter," Mehdi said. "We're part way through that journey."

Microsoft in Next 50 Years: The Future of AI, Cloud, Windows, and Gaming

Microsoft is celebrating its 50th anniversary at a time when technology is about to reshape the world. Founded by Bill Gates and Paul Allen in a small rented office in Albuquerque, Microsoft is now the world's second most valuable company. Over the past 50 years, the software giant has faced many challenges, antitrust lawsuits, and fierce competition, but can it stay ahead in the next five decades? To understand what the next 50 years hold for Microsoft, read on. Microsoft started as a small company in 1975, developing software for the Altair 8800 -- an early personal computer. By 1980, Microsoft needed an operating system to power the IBM PC. So, it acquired 86-DOS and modified it to MS-DOS. MS-DOS became massively popular and by 1985, Microsoft launched its first graphical operating system called Windows 1.0. 10 years later, in 1995, Microsoft released Windows 95 which was a huge commercial success. For the first time, Microsoft introduced the Start menu, Taskbar, and Windows Explorer. They are still part of the latest Windows 11 OS, even after 30 years. Following that, Microsoft launched Windows XP, Xbox, and the Office suite, which expanded its footprint in the PC space. Now, 50 years later, Windows has a desktop market share of over 70%, maintaining its position as the dominant OS. In these last 50 years, Microsoft has diversified its business to cloud computing (Azure), gaming (Xbox), productivity (Microsoft 365), and its next big thing - Copilot AI. Beyond being a consumer-centric company, Microsoft has become a massive corporation that provides its services to enterprise customers as well. In fact, today, Microsoft's revenue mostly comes from Azure's cloud infrastructure and AI services. Meanwhile, the remaining revenue comes from Microsoft 365, Windows, and Xbox. The only major space where Microsoft doesn't have a footprint is mobile. Windows Phone exited the smartphone OS market in 2020. Bill Gates recently admitted that losing the phone market to Android was his "greatest mistake". Besides that, Microsoft in 2025 announced that it's quitting the HoloLens hardware business completely, ending its Mixed Reality vision. When Satya Nadella took over Microsoft as the CEO in 2014, the Redmond giant was not in good shape. Nadella ended several struggling projects like the Windows Phone. And focused on its server businesses like Azure cloud, AI, enterprise solutions, and developer relations. As a result, Microsoft has become the world's second most valuable company by market cap, joining the $3 trillion club in market valuation recently. The credit largely goes to Satya Nadella for transforming Microsoft in the last decade. Many credit Nadella's leadership for striking a deal with OpenAI back in 2019. Microsoft invested $1 billion in OpenAI to support the development of AGI (Artificial General Intelligence) -- an AI system capable of matching human capabilities. So far, Microsoft has invested close to $14 billion in OpenAI and has a 49% ownership stake in the company. This has put Microsoft at the forefront of AI development. The partnership allows Microsoft to exclusively access OpenAI's latest breakthroughs and AI models. It can also commercialize OpenAI's models. Thus, allowing the company to integrate the latest AI models into its products. Like Copilot, Microsoft 365, and Azure AI for enterprise offerings. Not only that, the terms of the partnership say that OpenAI must use Microsoft Azure for all cloud infrastructure needs. Only recently, Microsoft relented and allowed OpenAI to purchase cloud resources from Oracle. Some reports also say that OpenAI has to share 75% of its revenue with Microsoft until the investment is recovered. It means that Microsoft has a huge financial influence over OpenAI's operations. And in the future, Microsoft will gradually recover its investment while having access to the latest AI technologies. Having said that, the partnership also says that once OpenAI achieves AGI internally, Microsoft will lose access to OpenAI's technologies. To keep its lead in the AI race, Microsoft is putting its AI division in order. Microsoft is reportedly developing internal reasoning models to reduce its over-reliance on OpenAI. The company has already trained smaller models such as Phi for everyday use and Muse AI for generating gaming visuals. Microsoft is also focusing on open-source models including China's DeepSeek which shocked the world with its efficient training methods. Overall, Microsoft is currently a key player in AI development, leveraging its partnership with OpenAI and developing in-house AI models as well. Until AGI is achieved, expect Microsoft to continue its lead in the AI race. While Windows doesn't directly contribute major revenue for Microsoft through licensing, the platform serves as the foundational bedrock, powering its software, cloud, and enterprise services. On the consumer side, Windows 11 is the latest desktop OS by Microsoft, and it's evolving into a great operating system. Microsoft is slowly but gradually improving the design language of Windows 11 to offer a consistent PC experience. Microsoft is putting effort into making Windows 11 a more modular OS. We have already seen that Windows 11's various elements such as the desktop shell, Taskbar, Notification Center, etc. are being decoupled from explorer.exe to make each component modular and updatable. Microsoft has already showcased Windows 10X (now canceled) which was based on a highly-modular Windows Core OS. In the future, we might see different flavors of Windows running on various form factors such as foldable devices, tablets, and more. It's being said that Windows 12 should come with a floating Taskbar and a new modular desktop interface, optimized for touchscreen devices. Apart from UI/UX improvements, Microsoft is also adding a lot of AI features to Windows 11. Besides current AI features on Windows 11 such as Recall, Semantic Search, Cocreator, etc., the future of Windows lies in Agentic AI-driven integration. Copilot on Windows will be able to perform actions in real-time using the vision capability. Users will be able to voice chat with Copilot and ask it to perform actions on their Windows PCs. To enable this, Microsoft is already preparing agentic frameworks for Windows like OmniParser, Magentic-One, AutoGen, and Windows Agent Arena to handle complex tasks. While some companies are bringing AI agents to the web browser, Microsoft is taking it to the OS level so that it can perform both system-level and web-based actions. Basically, in the future, you can expect that Windows will become an AI-driven operating system. To leverage AI for gaming, Microsoft has already showcased its Muse AI model that can generate game visuals and controller actions. It's quite possible that Generative AI will be tightly integrated into Xbox to enable features such as AI-assisted gameplay, environment generation, personalized experiences, and more. Besides software, on the hardware side too, Microsoft is preparing for the future and reducing its reliance on Nvidia. In 2023, Microsoft announced its custom Azure Maia 100 chip for AI workloads. While Google has its own TPU for AI workloads, and Nvidia continues to sell GPUs for AI training and inference, Microsoft needed an in-house chip, hence, Maia 100 was born. It's an AI accelerator that can run large-scale AI workloads on Azure's cloud. The company also announced an Arm-based Azure Cobalt CPU for general-purpose compute workloads, just like Google's Axion CPU. Since Microsoft has a major cloud business, the chip is going to reduce datacenter costs for Microsoft and cut down dependency on external vendors like Nvidia and Intel. Finally, in February 2025, Microsoft announced its first breakthrough in quantum computing. The company unveiled Majorana 1, a quantum computing chip for quantum computers. Unlike traditional qubits, Majorana 1 uses topological qubits which are said to be more stable and less prone to errors. For this, Microsoft invented a new class of materials called "topoconductors". Microsoft claims that Majorana 1 can scale up to 1 million qubits on a single chip. Overall, Microsoft is doing pioneering work in the field of quantum computing while also developing in-house chips to reduce reliance on external vendors. And as a software-first company, Microsoft is entering the AI era with high expectations, which has the potential to transform its entire ecosystem including Windows, Xbox, Azure, and Microsoft 365. In the next 50 years, we expect Microsoft to lead the industry with fresh innovations, but can it outpace Google and Apple? Only time will tell.

Bill Gates, Satya Nadella, And Steve Ballmer Get Roasted By Microsoft's AI Copilot: 'Let's Spice It Up' - Microsoft (NASDAQ:MSFT)

In a lighthearted moment on Friday during Microsoft Corp.'s MSFT 50th anniversary celebrations, AI Copilot, the company's artificial intelligence assistant, took the opportunity to roast Bill Gates, Satya Nadella, and Steve Ballmer. What Happened: As part of a special event, Microsoft CEO Nadella, along with former CEOs Gates and Ballmer, sat down for an interview with Copilot, which was designed to celebrate the company's legacy. The conversation kicks off with Satya Nadella prompting, "wrap it up by asking or maybe roast giving us each an AI roast?" Without missing a beat, Microsoft's AI-powered assistant fires back with flair: "Alright, Satya. Let's spice it up." See Also: Tesla And Other US Robotics Giants Demand Federal Strategy To Compete With China's $138 Billion Push -- Warn America Will Lose The Race Without It Copilot kicked things off with Ballmer, known for his boundless energy. "Steve, we'll start with you. Your enthusiasm is legendary, but do you ever worry that your energy might short-circuit the AI? I mean, even robots need a coffee break after your pep talks," the Copilot joked. Ballmer, unfazed, fired back with his trademark bravado: "Come on, dude. If you can't handle me, you can't handle a huge percentage of the world's population. We're counting on you." "Fair point, Steve," the AI conceded. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Next up was Gates, with Copilot teasing his signature intense expression. "Now, Bill, you've got that signature thoughtful gaze, but do you ever think the AI might feel intimidated by your intense thinking face? I mean, it's like it's waiting for a blue screen moment," it asked. Gates, never short on dry wit, replied: "I hope so. I mean, that's all I've got left as these AIs get so damn intelligent. It's just that gaze and my willingness to criticize that differentiates me." "And it's a formidable gaze indeed, Bill," the AI acknowledged. Ballmer then jumped in, posing a question to Copilot, saying, "Copilot, would you ever be willing to criticise him?" To which Copilot responded, "Absolutely. Criticism is where growth happens." Turning to current CEO Nadella, Copilot couldn't resist a final jab -- this time about Nadella's well-documented passion for AI. "Satya, AI seems to be your best buddy," the Copilot said. "But ever worry that your deep passion for AI could one day have it running the show, leaving you to just enjoy the ride?" Nadella answered with a reference close to his heart -- cricket. "Well, the day AI can play like the best cricket player that I enjoy, that's the day it can run the show as far as I'm concerned." "Touche, Satya. Let's see if it can hit a century in cricket, and then we'll talk. This has been a blast, gentlemen," the AI concluded, adding, "Here's to another 50 years of innovation and adventure. Cheers." Gates, ever the realist, added a cheeky final thought, "Whatever that means to an AI. Does it drink?" Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Tim Cook Praises China's DeepSeek For Driving Efficiency, Stresses Apple's 'Prudent And Deliberate' Approach Toward Capital Expenditure Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock MSFTMicrosoft Corp$359.75-3.58%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum37.88Growth64.59Quality31.99Value14.54Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Microsoft, turning 50, dials up Copilot actions to stay in AI game

REDMOND, Wash (Reuters) -Thousands of people swooned in a dark conference hall that felt more like a rock concert when a Microsoft product manager demonstrated the company's latest feature: how to sum numbers in Excel, with the click of a button. "It was literally like Mick Jagger walked out," said Yusuf Mehdi, Microsoft's consumer chief marketing officer, who started as an intern. That was more than 30 years ago. On Friday, the day Microsoft turned 50, the company's leaders and staff gathered at its Redmond headquarters to remember the software maker's glory days while trumpeting what they hope will bring it into the future: more powerful artificial intelligence. Copilot, Microsoft's AI assistant, is gaining a host of new features to make it more proactive. The version for consumers will start remembering personal facts about them. It will offer birthday reminders or support ahead of a presentation, or consumers can opt out, Mehdi said in an interview. Copilot likewise will personalize podcasts and shopping recommendations, and it will let consumers task their AI to book events for them, or send a friend a gift while checking in for guidance. "It frees you up," said Mehdi. Microsoft is hardly first to roll out action-taking or "agentic" software. As with rival systems, the AI will work best on popular sites where Microsoft has done some behind-the-scenes technical work, like with 1-800-Flowers.com and OpenTable, Mehdi said. Mehdi recalled days when Microsoft was smaller and growing. He said CEO Bill Gates could devour three books' worth of information from one day to the next, at a time when the co-founder still worked on Microsoft software. Mehdi watched Steve Ballmer, Gates' eventual successor, chant "developers, developers, developers!" in a sweat-drenched shirt to rouse a crowd into the ".net" era. Microsoft went from top of the pack to badly bruised in a high-profile lawsuit that U.S. antitrust enforcers brought against it in 1998. Years later, younger companies and startups, among them Alphabet and ChatGPT creator OpenAI, beat it to the punch on key AI developments. Satya Nadella, Microsoft's current CEO, is not standing still. The leader who turned Microsoft into the No. 2 cloud powerhouse challenged his executives at an internal summit this week, recalled Mehdi: "How do we rethink the way that we build the software?" Microsoft is iterating on its chatbot technology in a crowded field that includes Elon Musk's xAI and Anthropic. It has added Copilot to its heavily used productivity suites for business while giving consumers a distinctive version. "It's warm; it has that personality," said Mehdi. Some users have taken to this, while others find it asks too many questions, he said. "When we get to now be more personalized, we can start to get smarter," Mehdi said. "We're part way through that journey." (Reporting By Jeffrey Dastin in Redmond, Washington; Editing by David Gregorio)

How Microsoft's AI chief measures consumer inroads for Copilot

REDMOND, Washington (Reuters) - As Microsoft CEOs past and present gathered here to celebrate the company's 50th birthday, one leader said he is targeting a particular metric's improvement to guide his strategy on artificial intelligence. Mustafa Suleyman, chief executive of Microsoft AI, said his consumer and research division is tracking the usual measures of adoption for the company's AI assistant called Copilot. These include daily and weekly active users, distribution, and usage intensity for Copilot's consumer offering, he said. But Suleyman's interest lies elsewhere. "I really, really focus the team on SSR, the rate of successful sessions," he said in an interview. In an older era when consumers gave less real-time feedback on software, the time they spent with a product -- on social media, for instance -- or the problems they could solve represented crude "proxies for quality," he said. "Now, we actually get to learn from the anonymized logs and extract the sentiment," said Suleyman, who joined Microsoft about a year ago after leading the startup Inflection AI. Suleyman was one of the only Microsoft executives other than former CEOs Bill Gates and Steve Ballmer and current CEO Satya Nadella to speak on stage at Microsoft's Friday event at its Redmond, Washington, headquarters. Suleyman said Microsoft has tasked an AI model itself to assess such sentiment and help determine Copilot chats' SSR. "Over the last four months, it's gone up dramatically, and that's what we optimize for," he said. Suleyman declined to state the rate in absolute terms or disclose other Copilot metrics. The company last fall announced a more amiable voice for its consumer Copilot and the ability to analyze web pages for users as they browse. On Friday, Microsoft demonstrated further features for Copilot: personalized podcasts, a tool to help consumers research complex queries, and eventually a look for Copilot that can be custom to each user and conversation. "I would definitely go for something that was cutesy," said Suleyman, "like a little Furby-type thing." (Reporting by Jeffrey Dastin; Editing by Leslie Adler)

Microsoft's AI division head aims for lasting relationship between chatbots and users

AP - Fifty years after the founding of Microsoft, the CEO of its artificial intelligence division has a big task: develop a new product line as integral to daily life as the software giant's past innovations. "We're really trying to land this idea that everybody is going to have their own personalised AI companion," said Mustafa Suleyman in an interview with The Associated Press. "It will, over time, have its own name, its own style. It will adapt to you. It may also have its own visual appearance and expressions." Suleyman laid out that vision on Microsoft's 50th anniversary Friday. The celebration at Microsoft's headquarters in Redmond, Washington featured the first public gathering in more than a decade of co-founder and former CEO Bill Gates with his two successors: Steve Ballmer, who led the company from 2000 to 2014, and the current chief executive, Satya Nadella. Giving the mic to Suleyman, who joined the company and Nadella's senior leadership team just over a year ago to head a newly formed Microsoft AI division, signals how important getting its AI right is to the company's future -- in the next five years if not the next 50. The company's flagship product of this AI era, Copilot, already combines a chatbot with Microsoft's suite of workaday tools, from Excel spreadsheets and PowerPoint presentations to the Windows operating system that defines how most computers work. But Suleyman is striving for something that sounds a little more like science fiction -- a technology that can form a "lasting, meaningful relationship" with its users. Some of those updates -- such as new "visual memory" capabilities that keep track of a user's digital activity, if they want that -- roll out on mobile apps Friday. Other features are still in development, such as an animated avatar -- a talking peacock in Suleyman's demo Friday -- that would embody a person's AI companion. The race to build the best AI personal assistant that sticks with consumers is a competitive one. In recent weeks, rivals including Google and Meta Platforms have shaken up the teams in charge of AI research or products. ChatGPT maker OpenAI, which is both Microsoft's most important AI partner and a growing competitor, has also reorganised its leadership. Amazon is also looking to catch up by imbuing its already-ubiquitous digital assistant Alexa with more advanced AI capabilities. Even as competition ramps up, so does wariness from Wall Street and big business customers about whether these AI products are worth their huge costs in computing power and energy. Suleyman's own daily interactions with Copilot demonstrate the shortcomings of generative AI technology that is prone to confidently spouting falsehoods -- known as hallucinations -- and still struggles to match some of the commonsense reasoning skills that come naturally to humans. Asked about how he's using the technology in his daily life, Suleyman scrolled through his phone and candidly revealed his most recent chatbot conversations -- including, in preparation for Friday's event, his request for it to calculate Microsoft's all-time cumulative revenue over 50 years. "It didn't correctly add up all of the revenue," he said. "That's a pretty hard problem, although it got it really close." He also recounted more playful encounters, such as a long chat about "whether to put minced beef or chunks of beef" in a chili recipe and uploading a photo of his açai bowl so that Copilot could visually analyse its contents. Microsoft's own researchers, in collaboration with Carnegie Mellon University, recently published a study that found that generative AI can inhibit critical thinking skills of human workers and lead to overreliance on the technology -- a conclusion that Suleyman says he disagrees with. Making chatbots fun, useful and personable might be key in winning over workers wary of the technology -- especially when Gates, Suleyman and other tech leaders from Microsoft and elsewhere have loudly sounded the warning about their coming effects on employment. "The truth is that the nature of work is going to change," Suleyman said during a video interview on Microsoft's Teams platform, a way of communicating he said would have been unimaginable 30 to 50 years ago.