Microsoft unveils Copilot Cowork agents built on Anthropic’s AI and E7 AI product suite as it seeks to calm investor concerns about AI eating SaaS

Microsoft has announced a new set of products to get enterprise customers to build AI agents on its platform, including a new Copilot Cowork product built on top of Anthropic’s AI product Claude Cowork and a new business productivity software bundle that includes its own AI offerings.

The new products, which Microsoft is calling “Wave 3 of Microsoft 365 Copilot,” come as the software giant seeks to combat increased competition in the AI agent space both from rival business productivity software companies, such as Salesforce, and frontier AI companies such as OpenAI and Anthropic, which received billions of dollars in strategic investments from Microsoft but are nonetheless increasingly pursuing the U.S. tech giant’s traditional customer base. Microsoft also faces competition for AI agents from open-source offerings like OpenClaw.

Microsoft hopes to assuage investors concerned that AI agents will reduce companies’ need to rely on traditional software-as-a-service providers. The company’s shares have fallen more than 14% since Anthropic debuted its Claude Cowork product in mid-January.

At the heart of Microsoft’s announcement is Copilot Cowork, a new feature built in close collaboration with Anthropic. Copilot Cowork is designed to handle long-running, multistep tasks—such as preparing for a customer meeting by assembling a presentation, pulling together financials, emailing the team, and scheduling prep time—all from a single request. 

“We really believe right now is an inflection point,” Jared Spataro, Microsoft’s chief marketing officer for AI at Work, told Fortune. “The inflection point for us is Copilot taking on these agentic capabilities and going from assistance to real doing.”

Spataro said that Copilot Cowork uses Anthropic’s Claude model as the AI powering its reasoning and uses the same “agentic harness”—the system that allows the AI model to use other software tools and the guardrails around how it functions—as Anthropic’s Claude Cowork, but that Copilot Cowork includes features that make it easier to build the kinds of agents that companies need.

For instance, Microsoft’s implementation runs in the cloud within a customer’s Microsoft 365 tenant, meaning it is covered by the company’s enterprise data protection and integrated with what Microsoft calls “Work IQ”—a layer of intelligence drawn from a user’s emails, files, documents, meetings, and chats. Anthropic’s Claude Cowork, by contrast, runs locally on a user’s device.

“We actually don’t work locally, and that’s a feature, not a bug,” Spataro said. He described Anthropic’s offering as “a fantastic tool” but one with “limitations” in a corporate environment, noting it lacks access to cloud-based enterprise data and raises security concerns when deployed at scale.

“What Anthropic has done is demonstrate the value of these agentic capabilities and show us practically what it could look like,” he added. “Microsoft is all about commercialization.”

The Copilot Cowork feature is currently being piloted with select customers and will become available as a research preview in March through Microsoft’s new Frontier Worker product suite.

The company also announced that Anthropic’s Claude model is now available across the full Copilot Chat experience, not just in Microsoft’s Researcher and Excel features where it was previously offered.

While Microsoft initially built all of its Copilot offering around OpenAI’s models, it has now shifted to a flexible approach that allows customers to pick any model to power their AI assistants and agents. “Every 60 days at least, there’s a new king of the hill,” Spataro said. “There’s so much demand for a platform that doesn’t feel like, ‘I have to skip over to the next vendor.’”

The company said that its Agent 365 product—which is a so-called control plane or “orchestration platform” for AI agents, allowing IT and security teams to monitor, govern, and secure agents, including those created using other vendors’ software, across an organization—will be generally available from May 1, priced at $15 per user per month.

Spataro said the key insight behind Agent 365 came from recognizing that the same management infrastructure used for human employees—tools like Entra, Defender, Purview, and Intune—could be extended to manage AI agents as well. “AI agents are as subject to phishing attacks as people are,” he said. “As soon as an AI agent has an email address, they get spam too, and they can respond to it.”

Microsoft said that in just two months of preview, tens of millions of agents had appeared in the Agent 365 registry. Internally, Microsoft said it now has visibility into more than 500,000 agents across the company, with the most widely used focused on research, coding, sales intelligence, customer triage, and HR self-service.

Finally, Microsoft announced the Microsoft 365 E7 Frontier Worker Suite, also available from May 1, priced at $99 per user per month. The bundle combines Microsoft 365 E5—long the company’s premium business productivity suite—with Microsoft 365 Copilot and Agent 365. It also includes the Microsoft Entra Suite and advanced Defender, Intune, and Purview security capabilities.

The $99 price is below what customers would pay if they purchased these capabilities separately, according to Microsoft. The component pricing of the constituent parts—E5 at $60, Entra Suite at $12, Copilot at $30, and Agent 365 at $15—adds up to $117 per user.

While many analysts have speculated that AI agents will eventually force software-as-a-service companies such as Microsoft to shift away from per user pricing toward consumption-based models, Spataro said Microsoft’s customers are not currently demanding this. “I think I have the most data points of anyone in the industry; customers want per user right now,” he said. “Doesn’t mean they always will, but that’s what they want currently.”

Microsoft said Copilot paid seats have grown more than 160% year over year, with daily active usage up 10-fold. The number of customers deploying Copilot at significant scale—more than 35,000 seats—has tripled year over year, and 90% of the Fortune 500 now use Copilot, according to the company. It also said that 80% of the Fortune 500 are now using Microsoft AI agents in some capacity.

This story was originally featured on Fortune.com