At Build, Microsoft Declares Agents the New OS

Microsoft opened its Build developer conference in San Francisco on June 2 with a blunt thesis: the era of AI that waits politely for instructions is over. "Agents are not just a feature. They are the new operating system for work," chief executive Satya Nadella told a crowd of several thousand developers, framing nearly every announcement that followed around software that acts on its own.

Agents inside the tools you already use

The centerpiece is Office 365 Copilot Agent Mode, a reworking of the productivity suite that lets people run persistent agents directly inside Word, Excel, Teams and Outlook. Rather than asking Copilot to draft a single paragraph, a user can hand an agent a multi-step job and let it work through the document or spreadsheet on its own. Microsoft says Agent Mode reaches Microsoft 365 subscribers in late June, according to coverage from Windows News.

GitHub Copilot got a similar promotion. The tool that began life as autocomplete is now pitched as an autonomous coding agent, with multi-agent workflows inside VS Code and tighter links between GitHub and Azure. It is a direction the wider market has been moving for months, as our piece on Cognition's coding agent writing most of its own code made plain.

Foundry, and a quietly multi-model Microsoft

Behind the consumer-facing features sits Azure AI Foundry, Microsoft's platform for building and routing between models. Foundry now serves models from OpenAI, Anthropic, Mistral and DeepSeek among others, with new dashboards for orchestrating fleets of enterprise agents and keeping their costs in check. One detail is worth noting: Anthropic's Claude is now a first-class option alongside OpenAI inside Microsoft's own stack, a reminder that even the company most tied to OpenAI is hedging across providers.

AI that runs on your laptop

Windows chief Pavan Davuluri used the keynote to introduce Windows Local AI, a system-level runtime for agents that execute entirely on the neural processing units built into recent PCs from Qualcomm, Intel and AMD. Running models on the device rather than the cloud promises lower latency and keeps sensitive data off remote servers, a pitch aimed squarely at enterprises nervous about what leaves the building.

For all the agent talk, Microsoft kept expectations grounded in one respect: it confirmed there would be no Windows 12 reveal this week. The message was less about a new operating system than about turning the existing one, and the Office apps on top of it, into a place where software increasingly does the work itself. Whether workers want quite that much autonomy is the question Build did not answer, and one we explored in our look at the gap between agent hype and enterprise reality.