Microsoft has added agentic AI capabilities to Microsoft 365 Copilot to improve its usefulness for office workers — including its own version of Anthropic’s Claude Cowork.

Microsoft’s AI assistant has, so far, failed to attract significant business demand since launching more than two years ago, at least compared to its other products. Only 3% of the Microsoft 365 customer base is subscribed to the paid version of the AI agent, Microsoft said last month, with a total of 15 million paid licenses.

The new features announced Monday are aimed at igniting adoption. Among them is the introduction of Copilot Cowork; it’s built on Anthropic’s Claude Cowork, the AI agent tool that caused SaaS vendor shares to tank earlier this year due to its ability to complete tasks autonomously.

Copilot Cowork “brings together long-running parallel task completion inside of Microsoft 365 Copilot,” Charles Lamanna, president for business apps and agents at Microsoft, said in pre-recorded statement. 

The introduction of Copilot Cowork expands Microsoft 365 Copilot’s functionality beyond just chat, he said, with the agent able to complete work in the background so workers can focus on other tasks. “This allows you to amplify your work and be more productive while you multitask and work across all kinds of different Microsoft 365 applications,” said Lamanna.

Copilot Cowork “taps into the growing hype around Anthropic’s Claude Cowork concept,” said J.P. Gownder, vice president and principal analyst at Forrester, and “significantly extends it by embedding the capability across Microsoft 365 applications rather than keeping it as a desktop-centric tool.” 

There are, however, some limitations compared to Anthropic’s tool. “Unlike Claude Cowork, [Copilot Cowork] does not support local computer use, cannot interact directly with local files or applications, and lacks native integrations with third-party tools and services,” Gartner analysts said in a research note. “These omissions constrain Cowork’s autonomy and limit its ability to operate end-to-end workloads outside Microsoft 365.”

There are also risks associated with deploying an agentic tool such as Copilot Cowork in a business setting, said Gownder: “Anthropic transparently suggests that sensitive information shouldn’t be used with Claude Cowork at this time,” he said. “In theory, adding [Copilot Cowork] to Microsoft 365 makes it cloud-enabled and scalable with greater data access…, if it works, which is not a given based on Copilot’s trajectory so far.”

There are also questions about whether the tool can live up to its promise of usefulness to business users. 

“Enterprise leaders tell me that Copilot, though backed by OpenAI’s models, consistently underperforms ChatGPT and ChatGPT Enterprise as part of the Copilot environment,” said Gownder. “Microsoft’s years of overpromising on Copilot mean that there exists a trust gap, so Copilot + Cowork will have a lot of work to do proving its utility.”

Copilot Cowork is available as a “research preview” via Microsoft’s early access Frontier Program. The company didn’t release pricing details.

Microsoft collaborated with Anthropic on the development of Copilot Cowork, another sign of divergence from its partnership with OpenAI. Microsoft also added Claude as an optional AI model to use in the core Copilot chat interface.

In addition, there are new “agentic experiences” for Microsoft 365 Copilot. These allow Microsoft 365 Copilot to act on documents as directed by the user — creating a pivot table, for instance, or slides for a presentation. It’s also possible to direct  actions using the Copilot chat interface, such as asking Copilot to draft an email and then send it without switching tools. 

“We want to really move from a simple prompt and response to Copilot actually doing the work for you,” said Zoe Hawtof, senior technical advisor for Microsoft 365 Copilot.

The agent capabilities are available now in Word, Excel and Copilot Chat, and will roll out to Outlook and PowerPoint soon, Microsoft said.

Microsoft also revealed the launch date for Agent 365, the agent management and governance platform announced at Ignite last year. This will be generally available on May 1, priced at $15 per user each month. 

Microsoft said it has already deployed Agent 365 internally, where it’s used to manage 500,000 agents for purposes such as research, sales, and HR self-service. These agents have generated 65,000 responses a day for the past four weeks, Microsoft said.

Microsoft also unveiled its long-rumored E7 payment tier. Dubbed the “Frontier Suite,” E7 bundles all the features of Microsoft 365 E5 — including Entra Suite, Defender, Intune and Purview — with Microsoft 365 Copilot and Agent 365 in a single SKU.

Microsoft

At $99 per user per month, E7 will sit above E5 as the most expensive SKU available to business customers when it launches May 1. Microsoft said it should save customers money compared to purchasing each product individually. (Although recent reports suggested E7 would include consumption-based pricing, Microsoft said that is not the case.)

Businesses are still largely just getting started on rolling out AI agents, said Jack Gold principal analyst at J. Gold Associates 

“Mass agent deployment is really in a go-slow mode right now, as enterprises remain cautious — as they do with many new technologies,” Gold said. “But there is certainly much experimentation going on, often in ‘shadow AI” modes.’”

Governance and security are “critical factors” that have a bearing on which AI agents to roll out and how to deploy them, said Gold. “We’re in an early stage of agents and so many enterprises are still deciding what standards to put in place and how IT will manage the potentially vast deployments.” 

For Microsoft customers, one of the challenges will simply be navigating the various agent products available. These can often overlap in terms of functionality.

“Microsoft’s ecosystem is gaining all sorts of agents and solutions, and understanding when to use one over the other is already confusing,” said Gownder.

Other AI agent tools with similar capabilities include Researcher, launched last year, and Copilot Tasks, announced just a few weeks ago, he said. Meanwhile “users are creating Copilot Agents that are proliferating into agentic sprawl, but that apparently haven’t solved user problems…, so they’re bringing in Cowork.

“It’s a complicated environment,” said Gownder.