Microsoft abandons personal AI chatbot race With Copilot reboot

Microsoft’s updated software lets users edit Word or Excel documents within a Copilot app or browser tab.

Microsoft is merging the consumer and workplace versions of its Copilot AI assistant into one product aimed at corporate customers, ceding the crowded market for personal chatbots to OpenAI, Alphabet’s Google and, now, Meta Platforms. 

At an event in Seattle earlier this week, Microsoft executives gave a few dozen business and technology leaders a preview of what they are calling the new Copilot. The result of a six-month engineering effort, the latest iteration of the assistant has absorbed the separate version for home use, adopting some of its slick design features, and casting aside the marketing that sought to position the company as a builder of personal AI.

People have high expectations for workplace software, informed by their experience with smartphone apps, Jacob Andreou, who leads product development of the unified Copilot app, told the audience of corporate customers on Sept 23. Importing some user experience features from the consumer app “made Copilot so much better in just the last few months”, he said.

Microsoft’s individual users, Andreou added, tend to be people who like to poke around in PowerPoint and Excel, and are more interested in “the full power that we offer to enterprise users” than a simplified chat app.

The updated software, announced on Sept 25, gives users the ability to edit Word or Excel documents within a Copilot app or browser tab, addressing a common gripe that Microsoft’s assistant had only limited reach into the company’s own productivity software.

There is also a tab for a coding assistant to enable regular users to put together dashboards or automate tasks. Microsoft’s Scout, an always-on assistant that co-workers can summon, is joining the Copilot package too, rebranded as Autopilot. 

The new Copilot, which will roll out in the coming weeks, brings to a close one of Microsoft’s biggest bets of the AI era. Two years ago, executives formed separate teams to build two assistants – one for the workplace and one for home. Having helped OpenAI bring ChatGPT to the world, Microsoft bet its own consumer assistant could win over a new set of customers and tapped AI industry veteran Mustafa Suleyman to lead the effort. 

It quickly became an uphill battle when ChatGPT sprinted to a billion users and Google deployed its Gemini personal assistant to the vast Android ecosystem. Comparatively few people took Microsoft up on its offer of a personal chatbot. Suleyman in March ceded his Copilot product development responsibilities to Andreou, a former Snap executive.

Microsoft’s retreat coincides with the arrival of Meta’s Muse, a personal assistant that can act on users’ behalf and has raced to the top of the app download charts. 

In interviews this week, Andreou and Charles Lamanna, an executive who oversees Microsoft teams working on some of Copilot’s core workplace features, said Muse’s success proved people were receptive to AI automation. Microsoft’s opportunity, they said, is to bring similar capabilities to office workers.  

“We’re not going to build a Copilot that’s like your personal companion,” Lamanna said. (In April 2025, Suleyman had laid out Microsoft’s ambitions for Copilot in those very terms, standing in front of an enormous video screen introducing “Your AI Companion”.)

“That’s just not what people want from Microsoft,” Lamanna said. “We help you get stuff done.”

Andreou said many of the features of the personal Copilot, including specialised tools for health questions, studying or surfacing news and information, were incorporated into the rebuilt product. “In this unified Copilot, you actually still have all of these amazing consumer verticals and all of these kind of bespoke experiences,” he said. 

Some other features included in the personal Copilot, including custom podcasts and an animated blob of an avatar that popped up during conversations, have been retired. Anthropomorphic touches live on in the new Autopilot bots, which appear as smiling shapes when they are invoked in a Teams chat or e-mail.

Microsoft chief executive officer Satya Nadella compared the shift in office work brought about by automated AI services to the personal computer’s displacement of inter-office memos and faxes. “That was not just about our new digital tools,” he said at this week’s event. “It was a complete, new way to conceptualise how that business process trajectory worked. That’s what’s happening around Copilot.”

Companies were paying for more than 30 million Copilot subscriptions as of the end of June. And while individual users are free to use limited versions of Copilot’s chat experience, its most powerful tools are reserved for subscribers to the company’s M365 apps bundle, which has about 90 million paying users. 

David McLaren, who leads data and AI work at GHD, a Canadian engineering and professional services firm that is part of a Microsoft programme for early adopters of AI tools, said employees were turning to Copilot for summaries of conference calls and help managing e-mail, as well as work putting together pitches and analysis for clients. “It will get you off the white, blank page,” he said.

GHD started using Copilot in late 2023 with a 300-person trial, and has since rolled out the tool to all of its 12,000 employees. 

“I’m amazed by the use cases,” McLaren said. “They’re all over the place.” BLOOMBERG