Microsoft to add AI co-pilot to its Office software suite

Microsoft has announced that its suite of productivity tools is being enhanced by artificial intelligence software, as it seeks to get ahead in a race against tech giants such as Google, Baidu and Adobe to commercialise AI technology.

The $2tn tech giant on Thursday demonstrated an AI “co-pilot” for its Office software, including Word documents, Excel spreadsheets and PowerPoint presentations.

Microsoft said that the new tool will offer business customers the chance to speed up the creation of draft documents, generate artwork and create graphs in ways that save time for millions of workers.

Chief executive Satya Nadella said this “next generation of AI will unlock a new wave of productivity growth with powerful co-pilots designed to remove the drudgery from our daily tasks and jobs.”

The move comes as OpenAI, which Microsoft has made a multibillion-dollar investment in, released its new generation of AI model, GPT-4, which the software giant has already integrated into its Bing search engine.

The $2tn tech giant has been partnering for three years with OpenAI, the group behind “generative AI” tool ChatGPT, which can respond to users in humanlike ways using so-called large language models. The tool garnered 100mn users within three months of launching last November.

Microsoft said the new features will roll out “in the months ahead” and that they are already testing with “select” businesses, without providing further details.

This week, Google announced its own AI enhancements to Google Workspace — which includes Google Docs, Gmail, and Excel-rival Sheets — showing how its tools can write emails based on a few prompts, adopting a sombre or whimsical tone at will.

Meanwhile, Chinese search giant Baidu released its own chatbot, Erniebot, which it positions as a Chinese-language alternative to ChatGPT.

Microsoft has already rolled out an AI-enhanced version of its Bing search engine, built on top of OpenAI’s GPT technology, which is being used by a limited pool of users.

Jared Spataro, head of marketing for Microsoft 365, acknowledged that its new co-pilot tool can make errors. But, he emphasised that the AI tools are only meant to augment the user, not displace them.

“Sometimes co-pilot will get it right. Other times it will be usefully wrong, giving you an idea that’s not perfect, but still gives you a head start,” Spataro said.

Credit Suisse has estimated that if 10 per cent of Microsoft’s 370mn commercial Office 365 users upgraded to an AI-enhanced bundle of software, it would generate $14.9bn over the next five years. Assuming Microsoft also charges more across the board for a scaled-down version of the new capabilities, Credit Suisse said it could generate an additional $18.7bn.

Microsoft said the co-pilot suite of products would be priced “at a premium” but did not discuss details during the half-hour presentation, which centred on cases of everyday use for businesses and consumers.

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