Earlier this yr, Microsoft CEO Satya Nadella moved with haste to get engineers to check and deploy DeepSeek’s R1 mannequin on Azure AI Foundry. It was an unusually fast turnaround for a brand new mannequin on Azure that additionally set a new bar for success.
Just a few months later, Nadella then pushed to onboard xAI’s Grok 3 fashions, in a deal that noticed them arrive on Azure AI Foundry simply in time for the primary day of Microsoft’s Construct developer convention in Might. Elon Musk even appeared during Nadella’s Build keynote, in a considerably jovial dialog about his early days as a Microsoft intern — regardless of Musk making Microsoft a defendant in his lawsuit towards OpenAI.
I’m now listening to from sources acquainted with Microsoft’s AI plans that the corporate is taking a much more cautious method with onboarding xAI’s newest Grok 4 mannequin, after shortly onboarding fashions from rivals like OpenAI, Meta, and Mistral.
Musk introduced Grok 4 early final month, simply days after the Grok chatbot spewed out a sequence of pro-Hitler views on X. I’m advised that Grok’s Nazi sympathizing set off alarm bells inside Microsoft, simply as the corporate was making ready to launch Grok 4 on Azure AI Foundry. As a substitute of concurrently delivery Grok 4 on Azure, like Microsoft does with most of OpenAI’s new fashions, there was no public announcement of when xAI’s new mannequin will likely be out there by means of Microsoft’s AI providers.
I perceive Microsoft has been pink teaming Grok 4 all through July, a course of the place groups assault AI techniques to search out vulnerabilities or issues of safety. One supply described among the early pink crew studies for Grok 4 as “very ugly.”
As a substitute of launching Grok 4 to all Azure AI Foundry clients, Microsoft is now engaged on a personal preview of the mannequin — simply as Grok hits the headlines once more for generating Taylor Swift nudes. This preview will solely be out there for a handful of shoppers, I’m advised, as Microsoft needs to make sure Grok 4 is enterprise prepared.
I requested Microsoft to touch upon its Grok 4 plans for Azure AI Foundry, however the firm refused to supply a press release that’s attributable to a named spokesperson.
Grok 4 availability on Azure AI Foundry is essential to xAI, because it offers Elon Musk’s AI firm direct entry to Microsoft’s enterprise clients. It’s equally essential to Microsoft, as the corporate is eager to place itself as the AI mannequin internet hosting firm. Microsoft’s circumspect method with the Grok 4 preview means it’s unlikely that we’ll see xAI’s newest mannequin seem extra broadly on Azure AI Foundry anytime quickly.
Agent 365 is now an official Microsoft product
Microsoft introduced one other AI shake-up this week, affecting Charles Lamanna’s Enterprise & Trade Copilot (BIC) groups. In June, the BIC crew moved closer to the Microsoft 365 Copilot aspect of the corporate, with Lamanna reporting as much as Rajesh Jha, Microsoft’s head of experiences and gadgets.
In an inside memo yesterday, Lamanna introduced some BIC management adjustments that can see Microsoft make Agent 365 an “official product initiative.” Agent 365 feels like a method for Microsoft to give attention to the challenges of AI agent safety and compliance whereas it scales these brokers throughout Groups, Outlook, and SharePoint. The Agent 365 initiative will likely be led by Nirav Shah, a 24-year veteran at Microsoft.
Microsoft can be combining elements of its Energy Automate and Copilot Studio groups collectively. “Agent flows and CUA from Energy Automate will transfer to Copilot Studio beneath Dan Lewis,” says Lamanna in his memo. Another Energy Automate staff will now be a part of Microsoft’s Energy Platform crew.
Lastly, the BIC crew can be creating “Microsoft Ahead Deployed Engineers (FDEs).” These are technical specialists who work instantly with Microsoft’s clients to get them to activate AI merchandise. The FDE announcement comes amid Microsoft’s layoffs which have focused gross sales groups as a part of a broader restructuring effort to herald extra technical salespeople to raised show AI instruments to companies.
“Ahead Deployed Engineers are shortly turning into important to massive scale AI transformations, as seen at corporations like Plantir and OpenAI,” says Lamanna. “Simply as we’re altering the best way we do software program and product improvement, Microsoft might want to undertake this new method of delivering AI options to clients.”
- Microsoft studies sturdy cloud earnings, with Home windows and Xbox up, too. Microsoft’s earnings final week despatched the inventory worth hovering to the purpose the place it briefly turned the second $4 trillion company. The higher-than-expected earnings included Microsoft reporting its Azure income for the primary time. Azure generated greater than $75 billion in income in the course of the 2025 fiscal yr. Xbox also had a good quarter, with content material and providers income up 13 % and general gaming income up 10 % yr over yr. Xbox {hardware} remains to be struggling, although, with {hardware} revenues down 22 % this quarter.
- Satya Nadella was good for his $80 billion. Earlier this yr, there was numerous doubt over the $100 billion in funding behind The Stargate Challenge, and Nadella was fast to defend Microsoft’s personal funding in cloud and AI knowledge heart initiatives. “I’m good for my $80 billion,” said Nadella at the time. Microsoft is now spending $30 billion on its AI infrastructure investments subsequent quarter, which totals $120 billion over a yr if it retains that spending up every quarter.
- OpenAI’s new GPT-5 mannequin arrives immediately. Microsoft-owned GitHub spilled the beans on GPT-5 a little bit early, simply as OpenAI teases a launch throughout a “LIVE5TREAM” at 10AM PT / 1PM ET immediately. Expect to see four new model variants, with “enhanced agentic capabilities” and the flexibility for GPT-5 to deal with “complicated coding duties with minimal prompting.” If GitHub is prepared with GPT-5, then you may guess that Copilot and Azure AI Foundry can even be prepared with GPT-5 later immediately.
- Hey Microsoft, is it ‘Xbox PC’ or ‘Xbox on PC’? Microsoft has been utilizing the “Xbox PC” and “Xbox on PC” branding phrases lately, and it seems to be like the corporate has finally settled on Xbox on PC. It’s a brand new method to promoting that video games can be found on Microsoft’s Xbox app on PC, and a brand new method to compete with Steam. The Xbox on PC branding isn’t too completely different from simply Xbox PC, however it’s a refined change that makes it sound extra such as you’re getting Xbox video games on PC somewhat than needing some form of Xbox PC {hardware}. Both method, Microsoft nonetheless faces challenges convincing shoppers to go for Xbox video games on PC over merely shopping for them on Steam.
- Microsoft’s Home windows XP Crocs are not any joke. Microsoft has created limited-edition Windows XP-themed Crocs primarily based on the basic Bliss wallpaper. They even include Clippy and Recycle Bin shoe charms. They’re presently out there for Microsoft staff to preorder for $80, forward of a “worldwide launch.”
- Microsoft has an AI agent that may detect malware. Microsoft introduced Project Ire this week, an autonomous AI agent that may analyze and classify malware with out help. Developed by Microsoft Analysis, Microsoft Defender Analysis, and Microsoft Discovery & Quantum, Challenge Ire is the primary agent at Microsoft to independently writer a conviction case “sturdy sufficient to justify computerized blocking” of an APT malware pattern.
- Microsoft’s plan to repair the net with AI has already hit an embarrassing safety flaw. Researchers have already discovered a important vulnerability within the new NLWeb protocol Microsoft made an enormous deal about just some months in the past at Construct. NLWeb presents ChatGPT-like seek for any web site or app, however safety researchers have discovered an embarrassing flaw simply as Microsoft is deploying the brand new protocol with clients like Shopify, Snowlake, and TripAdvisor. Anybody might learn delicate information, together with system configuration information and even OpenAI or Gemini API keys. Microsoft has now patched the flaw however is refusing to situation a CVE, an trade customary for classifying vulnerabilities.
- Microsoft makes OpenAI’s new open mannequin out there on Home windows. OpenAI launched a brand new, free and open GPT mannequin earlier this week that may run on a PC. Microsoft was fast to make it easy to run on Windows, with the light-weight gpt-oss-20b mannequin now out there on Home windows AI Foundry. You’ll want a PC or laptop computer with no less than 16GB of VRAM, and the gpt-oss-20b mannequin is optimized for code execution and power use. Microsoft says it’s “good for constructing autonomous assistants or embedding AI into real-world workflows, even in bandwidth-constrained environments.” Microsoft can be engaged on a macOS launch.
- Nvidia will assist GeForce drivers on Home windows 10 till October 2026. Microsoft is ending assist for Home windows 10 in October, however Nvidia is dedicated to proceed releasing its new GeForce Recreation Prepared drivers until October 2026. That matches the yr of prolonged safety updates that Microsoft will supply shoppers, and can guarantee Home windows 10 customers proceed receiving the most recent optimizations for brand spanking new video games and apps.
- Bing made Google dance after which stole some search site visitors. Microsoft CEO Satya Nadella needed to make Google dance two years in the past, with an AI overhaul of Bing that was designed to steal Google’s all-important search market share. Now, there are many indicators that Microsoft has successfully taken search share off Google, each within the US and worldwide. Comscore and Statcounter each observe that Bing has elevated its search share by a small proportion on desktop. That would imply Microsoft’s tips to maintain folks utilizing Edge and Bing as defaults are having an affect on its search share.
- Microsoft is ending Home windows 11 SE, its ChromeOS competitor. Microsoft is ending support for Windows 11 SE next year, 5 years after it launched the working system on low-cost laptops that had been designed to compete with Google Chromebooks. Home windows 11 SE was solely out there on gadgets for colleges, however it was designed to maintain Microsoft’s schooling clients from switching to ChromeOS. As demand tails off for Chromebooks, Microsoft isn’t chasing Google’s low-cost laptops fairly as exhausting because it as soon as was.
- 8BitDo’s first wi-fi Xbox controller is a shock Uncommon collaboration. I used to be stunned to see Xbox recreation studio Uncommon crew up with 8BitDo, and never Microsoft, for a particular anniversary version Xbox controller. The officially licensed controller contains a gold and blue design, with loads of Easter eggs to have a good time Uncommon’s fortieth anniversary. It’s additionally 8BitDo’s first wi-fi Xbox controller, with a small USB dongle and never Microsoft’s native Xbox Wi-fi protocol.
- Microsoft’s Black Hat-like hacking occasion returns with larger rewards. Microsoft’s hacking occasion, Zero Day Quest, is back and accepting nominations till October 4th. This yr there may be as much as $5 million in bounty awards, up $1 million from final yr. Microsoft is even providing multiplied bounty awards for locating essentially the most important points in merchandise like Azure, Copilot, and Microsoft 365. Safety researchers can even get an opportunity to qualify for a reside hacking occasion at Microsoft’s headquarters in spring 2026.
- Microsoft is bringing its Xbox Copilot to the Home windows Recreation Bar. Microsoft began testing its Xbox Copilot on iOS and Android earlier this yr, and now it’s bringing the chatbot to the Recreation Bar function on Home windows 11. In case you’re a part of the PC preview for Xbox options, you may now start testing a new Gaming Copilot widget for the Game Bar. The Gaming Copilot is aware of what video games you’re taking part in and may take screenshots to reply questions, and it’s an early step in Microsoft’s broader imaginative and prescient to show its Xbox Copilot into an AI gaming coach.
- Microsoft’s 2030 imaginative and prescient for Home windows is all about AI. Microsoft quietly launched a brand new YouTube sequence on its Home windows channel earlier this week, discussing the corporate’s imaginative and prescient for Home windows in 2030. The first in the series options David Weston, vice chairman of enterprise and OS safety at Microsoft, who predicts “the world of mousing and keyboarding round will really feel as alien because it does to Gen Z [using] MS-DOS.” Microsoft has already began pushing AI brokers inside Home windows 11, and I’m solely anticipating the tempo of AI change in Home windows to speed up over the following 5 years.
- Microsoft tries to maintain its shopper Copilot out of New York Occasions AI copyright case. Microsoft is attempting to argue that its present model of Copilot for shoppers should be excluded from legal discovery within the copyright lawsuit filed by The New York Occasions. Microsoft argues its newest model of Copilot “didn’t exist on the time Information Plaintiffs filed their complaints” and “is constructed on a distinct platform with new system structure.” Copilot nonetheless makes use of the identical core OpenAI fashions, although, and that’s precisely what legal professionals for the NYT are arguing.
- Microsoft’s knowledge heart technique remains to be in pause mode. There have been a number of studies of Microsoft pausing knowledge heart builds over the previous six months, alongside leasing freezes. Now, SemiAnalysis reports that Microsoft’s dedicated knowledge heart development is down yr over yr, and that “virtually no new leases had been signed up to now 12 months.”
- The Home windows Vista boot sound bug in Home windows 11 builds has been mounted. Microsoft accidentally swapped Home windows 11’s startup sound with Vista’s in latest take a look at builds of the working system. That is now mounted within the latest Canary builds of Home windows 11. It’s a disgrace, as a result of I really want the Vista boot sound.
I’m at all times eager to listen to from readers, so please drop a remark right here, or you may attain me at [email protected] if you wish to talk about the rest. In case you’ve heard about any of Microsoft’s secret initiatives, you may attain me through electronic mail at [email protected] or converse to me confidentially on the Sign messaging app, the place I’m tomwarren.01. I’m additionally tomwarren on Telegram, for those who’d want to speak there.
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