Microsoft CEO Satya Nadella announces new AI initiatives at Build conference, positioning the company to compete in agentic AI era

Nadella proclaimed a 'new paradigm' centered on agentic AI at Microsoft's Build conference in San Francisco on Tuesday. The company revealed a family of homegrown AI models including a fresh image model, coding model, and its first reasoning model, along with 'Project Solara,' a purpose-built agentic platform for devices such as a desktop and badge.

Microsoft announced a Copilot super app launching this summer that will combine chat, coding, and a function named Autopilot. Autopilot is designed to connect to an agent named Scout, which will be able to join group chats in Microsoft Teams or handle email threads in Outlook. The personal AI assistant OpenClaw will be integrated into Windows.

Microsoft faces pressure to prove relevance as it competes with Google, Anthropic, Meta, and SpaceX. The company has been challenged by data center capacity constraints, over-reliance on OpenAI, and a Copilot assistant that trails rivals, but is now training Copilot on its own servers, deploying homegrown chips, and has a new flexibility deal with OpenAI.