Earlier this 12 months, 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.
A couple of 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 Could. 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 accustomed to Microsoft’s AI plans that the corporate is taking a much more cautious strategy with onboarding xAI’s prize Grok 4 mannequin, after rapidly onboarding fashions from opponents like OpenAI, Meta, and Mistral.
Musk introduced Grok 4 early final month, simply days after the Grok chatbot spewed out a collection of pro-Hitler views on X. I’m informed 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 an alternative 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 shall be accessible via Microsoft’s AI providers.
I perceive Microsoft has been crimson 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 crimson workforce experiences for Grok 4 as “very ugly.”
As an alternative of launching Grok 4 to all Azure AI Foundry clients, Microsoft is now engaged on a non-public preview of the mannequin — simply as Grok hits the headlines once more for generating Taylor Swift nudes. This preview will solely be accessible for a handful of shoppers, I’m informed, 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 an announcement that’s attributable to a named spokesperson.
Grok 4 availability on Azure AI Foundry is necessary to xAI, because it provides Elon Musk’s AI firm direct entry to Microsoft’s enterprise clients. It’s equally necessary to Microsoft, as the corporate is eager to place itself as the AI mannequin internet hosting firm. Microsoft’s circumspect strategy with the Grok 4 preview means it’s unlikely that we’ll see xAI’s prize 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 & Business Copilot (BIC) groups. In June, the BIC workforce moved closer to the Microsoft 365 Copilot facet of the corporate, with Lamanna reporting as much as Rajesh Jha, Microsoft’s head of experiences and units.
In an inner memo yesterday, Lamanna introduced some BIC management adjustments that can see Microsoft make Agent 365 an “official product initiative.” Agent 365 seems like a method for Microsoft to concentrate on the challenges of AI agent safety and compliance whereas it scales these brokers throughout Groups, Outlook, and SharePoint. The Agent 365 initiative shall 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 underneath Dan Lewis,” says Lamanna in his memo. Another Energy Automate workers will now be a part of Microsoft’s Energy Platform workforce.
Lastly, the BIC workforce can be creating “Microsoft Ahead Deployed Engineers (FDEs).” These are technical consultants who work straight 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 exhibit AI instruments to companies.
“Ahead Deployed Engineers are rapidly turning into important to giant scale AI transformations, as seen at firms like Plantir and OpenAI,” says Lamanna. “Simply as we’re altering the way in which we do software program and product improvement, Microsoft might want to undertake this new method of delivering AI options to clients.”
- Microsoft experiences 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 grew to become 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 throughout the 2025 fiscal 12 months. Xbox also had a good quarter, with content material and providers income up 13 p.c and general gaming income up 10 p.c 12 months over 12 months. Xbox {hardware} remains to be struggling, although, with {hardware} revenues down 22 p.c this quarter.
- Satya Nadella was good for his $80 billion. Earlier this 12 months, there was loads of 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 middle tasks. “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 12 months if it retains that spending up every quarter.
- OpenAI’s new GPT-5 mannequin arrives as we speak. 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 as we speak. 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’ll be able to wager that Copilot and Azure AI Foundry may even be prepared with GPT-5 later as we speak.
- Hey Microsoft, is it ‘Xbox PC’ or ‘Xbox on PC’? Microsoft has been utilizing the “Xbox PC” and “Xbox on PC” branding phrases just lately, and it seems to be like the corporate has finally settled on Xbox on PC. It’s a brand new strategy to promoting that video games can be found on Microsoft’s Xbox app on PC, and a brand new approach to compete with Steam. The Xbox on PC branding isn’t too totally different from simply Xbox PC, nevertheless it’s a refined change that makes it sound extra such as you’re getting Xbox video games on PC moderately than needing some type of Xbox PC {hardware}. Both method, Microsoft nonetheless faces challenges convincing customers to go for Xbox video games on PC over merely shopping for them on Steam.
- Microsoft’s Home windows XP Crocs aren’t 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 at present accessible for Microsoft workers 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 creator a conviction case “sturdy sufficient to justify automated 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 crucial vulnerability within the new NLWeb protocol Microsoft made an enormous deal about only a few months in the past at Construct. NLWeb gives 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 challenge a CVE, an trade commonplace for classifying vulnerabilities.
- Microsoft makes OpenAI’s new open mannequin accessible 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 accessible 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 Sport Prepared drivers until October 2026. That matches the 12 months of prolonged safety updates that Microsoft will supply customers, and can guarantee Home windows 10 customers proceed receiving the prize optimizations for brand spanking new video games and apps.
- Bing made Google dance after which stole some search visitors. Microsoft CEO Satya Nadella wished 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 word that Bing has elevated its search share by a small share on desktop. That might imply Microsoft’s methods to maintain individuals 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 accessible on units for colleges, nevertheless it was designed to maintain Microsoft’s training 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 workforce up with 8BitDo, and never Microsoft, for a particular anniversary version Xbox controller. The officially licensed controller includes a gold and blue design, with loads of Easter eggs to rejoice 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 greater rewards. Microsoft’s hacking occasion, Zero Day Quest, is back and accepting nominations till October 4th. This 12 months there may be as much as $5 million in bounty awards, up $1 million from final 12 months. Microsoft is even providing multiplied bounty awards for locating essentially the most crucial points in merchandise like Azure, Copilot, and Microsoft 365. Safety researchers may 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 Sport Bar. Microsoft began testing its Xbox Copilot on iOS and Android earlier this 12 months, and now it’s bringing the chatbot to the Sport Bar characteristic on Home windows 11. If you happen to’re a part of the PC preview for Xbox options, you’ll be able to 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 collection 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, vp 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 subsequent 5 years.
- Microsoft tries to maintain its shopper Copilot out of New York Occasions AI copyright case. Microsoft is making an attempt to argue that its present model of Copilot for customers should be excluded from legal discovery within the copyright lawsuit filed by The New York Occasions. Microsoft argues its prize model of Copilot “didn’t exist on the time Information Plaintiffs filed their complaints” and “is constructed on a unique 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 middle technique remains to be in pause mode. There have been a number of experiences of Microsoft pausing knowledge middle builds over the previous six months, alongside leasing freezes. Now, SemiAnalysis reports that Microsoft’s dedicated knowledge middle development is down 12 months over 12 months, and that “nearly no new leases had been signed prior 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 all the time eager to listen to from readers, so please drop a remark right here, or you’ll be able to attain me at [email protected] if you wish to talk about anything. If you happen to’ve heard about any of Microsoft’s secret tasks, you’ll be able to attain me by way of e-mail at [email protected] or communicate to me confidentially on the Sign messaging app, the place I’m tomwarren.01. I’m additionally tomwarren on Telegram, should you’d want to speak there.
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