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Microsoft teams up with Anthropic to expand Copilot AI

Microsoft has partnered with artificial intelligence startup Anthropic to strengthen its workplace AI assistant Microsoft Copilot. The collaboration is part of Microsoft’s efforts to develop more advanced AI systems that can perform tasks independently for users.

Under the partnership, Microsoft will introduce a new feature called Copilot Cowork, which will use Anthropic’s AI technology to help automate everyday work activities. The tool is designed to handle tasks such as analysing data, organising documents, preparing presentations and managing spreadsheets.

The new system focuses on the development of AI agents, software tools that can complete tasks automatically instead of simply responding to questions. These AI agents are expected to assist employees in handling routine work and improving productivity.

Anthropic is known for developing advanced AI models such as Claude, which are capable of handling complex instructions and building applications. By integrating these models into Copilot, Microsoft aims to expand the capabilities of its workplace AI tools.

The feature will initially be tested with a limited group of users before being rolled out more widely. Microsoft said the service will run through its cloud systems and include strong security controls to protect enterprise data.

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Technology

Microsoft sees Copilot AI boom, costs worry investors

Microsoft CEO Satya Nadella defended the company’s ambitious AI strategy during the latest earnings call, highlighting strong growth in its Copilot AI products even as some investors voiced caution over rising costs and slower cloud performance.

For the quarter ending December 2025, Microsoft reported revenue of $81.3 billion and a 21 % increase in net income, driven primarily by cloud sales. Despite these strong results, Microsoft shares fell, as Wall Street focused on the company’s massive capital expenditures for AI infrastructure and data centres, alongside slightly softer growth in Azure and Microsoft 365 revenues than expected.

Nadella emphasised that demand for AI far exceeds current capacity, framing heavy spending as an investment in future growth. He reported that daily usage of Copilot AI products has nearly tripled year-over-year. Microsoft 365 Copilot now boasts 15 million paid seats, while GitHub Copilot has 4.7 million paid subscribers, reflecting strong adoption across both corporate and developer environments.

Beyond office productivity tools, Nadella highlighted specialised AI applications, such as Dragon Copilot for healthcare, which has been used in millions of patient encounters. This demonstrates Microsoft’s strategy to expand AI adoption across multiple sectors, not just within its core software suite.

Despite these positive usage trends, some investors remain cautious. Analysts note that while AI adoption is strong, Azure’s growth pace has slowed slightly, and the cost of building AI infrastructure may pressure margins if adoption growth does not keep pace.

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