Powering Frontier Transformation with Copilot and agents

Frontier Transformation starts with a simple idea: AI must do more than optimize what already exists. It must unlock new levels of creativity, innovation, and growth. And it must show up inside real work, grounded in real context, and solve real problems for people and organizations. We’ve found that to do this, the two most important elements are intelligence and trust. Intelligence ensures AI is contextual, relevant, and grounded. Trust ensures AI can scale safely, securely, and responsibly. Our announcements today show how intelligence and trust together turn AI from experimentation into durable, enterprise-wide value.

Wave 3 of Microsoft 365 Copilot

Wave 3 marks a new version of Microsoft 365 Copilot, moving beyond assistance to embedded agentic capabilities. And this is just the start, with much more product innovation to follow in the months ahead.

Copilot Cowork

Working closely with Anthropic, we have brought the technology that powers Claude Cowork into Microsoft 365 Copilot. It’s this multimodel advantage that makes Copilot different. Your work is not limited by one brand of models. Copilot hosts the best innovation from across the industry and chooses the right model for the job regardless of who built it. This is a pattern of work that will only become more powerful as new models and ways of working emerge.

Copilot Cowork brings long‑running, multi‑step work into Microsoft 365 Copilot, moving beyond prompts and responses toward execution that unfolds over time. And, with Work IQ, it has the full context of your work, not just fragments of data, so it can reason over all relevant materials. Instead of asking Copilot to generate a single artifact, Cowork allows you to delegate meaningful work and stay in the loop as that work progresses.

With Cowork, Copilot can break down complex requests into steps, reason across tools and files, and carry work forward with visible progress and opportunities to steer. Tasks are no longer confined to a single turn or a single app. They can run for minutes or hours, coordinating actions and producing real outputs along the way.

Cowork is built with enterprise needs in mind. Work is observable. Actions are transparent. Documents are immediately enterprise knowledge that’s protected and ready to share. Progress can be reviewed, guided, or stopped. And everything operates within Microsoft’s security, identity, and governance framework, so organizations can adopt these capabilities with confidence.

By combining Anthropic’s agentic model for multi-step tasks with Microsoft 365, Cowork delivers a managed, enterprise‑grade experience that pairs powerful reasoning with the controls enterprises expect. This is the promise of Copilot: the best AI innovation from across the industry delivered quickly with the intelligence of Work IQ and trust of Microsoft’s Enterprise Data Protection. Cowork is being tested with a limited set of customers as a research preview and will be available through the Frontier program in March.

Join the Frontier program to get access to Microsoft’s latest AI innovations.

Microsoft 365 Copilot in Word, Excel, PowerPoint, and Outlook 

Today, many AI tools treat the creation of an artifact as a single-shot task. They connect to Microsoft 365 data but miss key context. They create content that doesn’t follow how apps natively work. They create version sprawl by producing files that are locally downloaded. And they do not respect the existing confidentiality protections within an organization.

Wave 3 of Copilot will now work alongside you in Word, Excel, PowerPoint, and Outlook, creating, editing, and refining high-quality content from start to finish inside a document, spreadsheet, presentation, or email. And it uses Work IQ to stay grounded in the context of your work, so edits always reflect what is current and relevant across your files, meetings, chats, and relationships.

Copilot does the heavy lifting by updating existing work: refining a Word document into a polished draft, improving Excel spreadsheets with real formulas, producing slides in PowerPoint that match how your organization builds decks—including understanding layouts, object styles, and brand kits— and drafting and refining emails directly in Outlook. And because this work happens inside the apps where people already work, every change is transparent, reviewable, and reversible as you iterate.

During preview, we described these capabilities as “Agent Mode.” As we moved toward general availability, it became clear that this isn’t a separate mode at all—it’s core to how this next wave of Copilot works.

Microsoft 365 Copilot enforces existing Microsoft 365 permissions and sensitivity labels and saves files to OneDrive and SharePoint—with tenant-level controls—so protected content isn’t processed when extraction isn’t allowed. This means organizations can apply governance, audit, compliance, and retention policies at scale.

These new Copilot experiences are generally available in Excel and Word, with PowerPoint and Outlook starting to roll out over the coming months.

Agents in chat

Not all work starts inside a document or an app. Often, it begins conversationally—with a question, an idea, or a rough intent that needs to be turned into action.

That’s why, in Wave 3, chat in Copilot is the entry point for chat‑first creation and execution. From chat, you can create documents, spreadsheets, and presentations directly from a conversation, or ask Copilot to take common workplace actions—like scheduling a meeting or drafting and sending an email to your team—without copying and pasting between tools or switching contexts. These end‑to‑end workflows move work forward immediately and set Copilot apart.

Chat in Copilot is where the ecosystem comes together. Built‑in agents for Word, Excel, PowerPoint, and Outlook let you move easily from conversation into app‑native work. And with agents in Copilot supporting open standards like Apps SDK and MCP Apps, your apps can now surface directly within chat—enabling live, interactive experiences where work actually happens. From sales and customer service insights in Microsoft Dynamics 365, to custom apps built with Microsoft Power Apps, to partner experiences from Adobe, Monday.com, and Figma, Copilot brings your critical tools and insights together in one place.

Copilot also makes it easy for people across your organization to build agents that support their day‑to‑day work using Agent Builder. Meanwhile, IT and business leaders can create more sophisticated business process agents with Microsoft Copilot Studio—from employee onboarding to procurement. Recent updates to Copilot Studio help organizations evaluate agent quality, coordinate multiple agents, and ensure agents work together across systems—while remaining observable, governable, and secure at enterprise scale. 

Copilot works directly inside apps when work is underway, and agents in chat provide the starting point when work begins with a conversation.

Excel, Word, and PowerPoint Agents are rolling out to generally availability in chat in Copilot. Schedule from chat and custom instructions are available today and send email from chat is rolling out with broad availability this spring. 

Multi‑model intelligence

Wave 3 also advances Microsoft’s commitment to model choice in Copilot, so intelligence can show up in the right way for the work at hand, without requiring you to think about models at all.

Many AI tools lock users into a single vendor’s models. Others force people to choose between tools, experiences, or modes depending on the task. That fragmentation creates friction for individuals and complexity for organizations. Leaders end up managing overlapping tools, inconsistent experiences, and rising costs as teams bring their own AI into the business.

At the same time, IT and business decision‑makers are forced into long‑lived vendor bets, even as the pace of model innovation accelerates and better capabilities emerge elsewhere. The result is broken context for users, unnecessary overhead for organizations, and the burden of model selection pushed onto people who just want to get work done.

In contrast, Microsoft 365 Copilot brings leading models from multiple providers directly into the work experience. With Wave 3, Claude is now available in mainline chat in Copilot via the Frontier program, alongside the latest generation of OpenAI models, which continue to roll out with new releases. This means users can access advanced reasoning and multistep capabilities in their everyday Copilot conversations, not just specialized tools. Copilot automatically applies the right model for the task, all grounded in your enterprise context and protected by Microsoft’s security and governance controls.

Agent 365

As organizations adopt agents as part of everyday work, the challenge shifts from experimentation to operating them with trust, safety, and control at scale. IDC projects agent use will increase by an order of magnitude over the next few years, with hundreds of millions—and soon billions—of agents operating across enterprises.¹ That scale creates a new dilemma for IT and security leaders: how to manage agents across the organization without rebuilding infrastructure, weakening security posture, or slowing innovation. This is exactly the scenario Agent 365 was designed for.

Agent 365 is the control plane for agents. In practical terms, it gives IT and security leaders one place to observe, secure, and govern every agent across the organization, and it provides the confidence to move from agent experimentation to enterprise-scale operations. Agent 365 extends the management, security, and governance processes organizations already use for employees to agents, so they can stay in control as agents become part of daily work.

The idea is simple: there is no need to reinvent the wheel. The fastest path to getting agents under control is to manage them in a similar manner to managing users, using familiar Microsoft solutions including the Microsoft Admin Center for agent management and Microsoft Security solutions like Defender, Entra, and Purview for agent security and governance.

Agent 365 will be generally available on May 1, priced at $15 per user per month.

Introducing Microsoft 365 E7: The Frontier Suite

Frontier transformation is real when both sides of the system move together: people and AI operating across the enterprise.

Microsoft 365 E7: The Frontier Suite closes the gap, equipping employees with AI across email, documents, meetings, spreadsheets, and business application surfaces, while giving IT and security leaders the observability and governance needed to operate AI at enterprise scale.

Copilot and agents work together with shared intelligence, understanding context, history, priorities, and constraints. Trust is built in by default—with user data, enterprise data, and agent actions protected through identity, policy, and observability—so AI can scale across the workforce without compromising security or compliance.

Microsoft 365 E7 will be available for purchase on May 1 at a retail price of $99 per user per month, and includes Microsoft 365 Copilot, Agent 365, Microsoft Entra Suite, and Microsoft 365 E5 with advanced Defender, Entra, Intune, and Purview security capabilities to help secure users, delivering comprehensive protection across agents and users.

Get started today

Wave 3 of Microsoft 365 Copilot marks a turning point in how AI shows up at work. Agentic capabilities are embedded directly into Word, Excel, PowerPoint, Outlook, and Copilot Chat, bringing multi‑model intelligence into everyday workflows. Agent 365 makes this shift operational by giving organizations a way to observe, govern, and secure agents as they move from experimentation to enterprise‑scale use. Microsoft 365 E7 brings it all together by unifying productivity, AI, identity, and security into a single foundation.

Together, these changes make frontier transformation real: intelligence that understands the context of work, and trust that allows AI to scale safely across the workforce. When intelligence and trust move together, AI stops being an experiment and starts becoming how work gets done.

Footnotes

Microsoft 365 E7 is available with and without Teams.

¹IDC Info Snapshot, sponsored by Microsoft, 1.3 Billion AI Agents by 2028, May 2025 #US53361825