Microsoft is revamping Windows for the AI era, adding AI agents and other tools directly into the operating system as it tries to keep its software empire relevant in a fast-moving market.
At a Windows event in San Francisco on Wednesday, chief executive Satya Nadella said Windows is becoming a 'hybrid intelligence' system, with both cloud-based AI and AI that runs locally on the device. He said the company is bringing together local AI, AI-powered software, and devices built natively for AI.
Microsoft also unveiled a new Surface Laptop Ultra, which the company described as a high-end device for developers and creators. Nadella was joined onstage by Nvidia chief executive Jensen Huang. The new Surface Laptop Ultra uses Nvidia's RTX Spark 'superchip,' which Huang called 'a beast' of a product.
The Ultra will cost $2,599. The Surface RTX Spark Dev Box, which works alongside the Ultra, will cost $5,999. The laptop will be available beginning Oct. 16, and the Dev Box in November.
A major part of Microsoft's plan is to integrate the redesigned Copilot AI app more deeply into Windows. Jacob Andreou, head of Copilot, said Copilot will be able to run tasks without accessing the cloud when those tasks do not need heavy compute. As an example, he said a user could have Copilot autonomously pull files needed to file taxes from different parts of a laptop without going to the cloud, making it cheaper and faster.
Microsoft says the redesigned Copilot app will become a central interface for chatting with AI bots, using AI tools to complete tasks, writing code, and accessing a new Autopilot feature with agentic capabilities. Some of the features Microsoft showed are not yet available.
The Autopilot feature is designed to let users name an agent, assign it a role and a goal, and then send it after tasks such as project updates, tracking work decisions and deadlines, reminding colleagues when commitments are due, gathering prep materials, and reaching out to partners.
Microsoft has been one of the first Big Tech companies to recognize the importance of generative AI, investing $13 billion in OpenAI and partnering with the company years ago. But that alliance has weakened, and Microsoft is now trying to find its lane in a crowded AI market as Google, OpenAI, and Anthropic compete on large language models, while Meta carves out space with its Muse personal AI assistant.
The market has already voted on the next phase of AI: the winners will be the companies that own the workflow, not just the model. Microsoft is trying to protect its turf by embedding AI into Windows, Copilot, and its devices at once, a strategy built around control, leverage, and enterprise margins.
That is also the risk. A more capable Windows can help customers move faster, but a more crowded AI stack can also turn software into a thicker layer of dependency. In that fight, the taxpayer is not the customer; the customer is the product user, and the prize is productivity.
