Microsoft overhauls Copilot and launches a single app with chat, document editing, and autonomous agent

On Thursday, 25th, Microsoft unveiled a major overhaul of Copilot, transforming it into a single app that combines AI chat, Word, Excel, and PowerPoint editing, the creation of small programs via text commands, and an agent that can continue working after the user closes their computer.

Almost none of this is available today. Most of it will launch in an early access program in the coming weeks, with the most robust features being charged on a usage basis rather than a fixed subscription.

From pilot to autopilot: a shift in concept

In March 2023, when Microsoft first introduced Microsoft 365 Copilot, CEO Satya Nadella explained the product’s name by contrast: unlike an “autopilot,” where the AI makes decisions on its own, a “copilot” would keep the human in control at all times.

Three years later, Copilot introduced a new tab called Autopilot: an agent with its own identity, memory, and workspace that monitors channels, follows conversations, performs recurring tasks, and resumes projects days later without waiting for user commands.

Autopilot originated from an unexpected source. According to GeekWire, it is a direct descendant of Microsoft’s experiments with OpenClaw, an open-source personal agent that went viral earlier this year. In March, Nadella publicly labeled OpenClaw as a security risk “similar to a virus.”

The app is divided into three sections

Home is the new starting point, where conversational chat and Cowork—a mode for end-to-end delegated tasks like responding to an RFP or assembling a launch kit—come together in one place, along with real-time editing of Word, Excel, and PowerPoint within Copilot itself.

Code extends the creation of small apps, dashboards, and automations beyond the technical team: anyone can describe what they need in natural language, and the system builds and securely hosts the result within the company’s environment.

The aforementioned Autopilot, formerly known as Scout, is a persistent and proactive cloud-based agent that continues to run even when the user is away from the keyboard.

Billing model separates everyday use from advanced features

On the financial side, Microsoft has separated the two types of spending: a fixed subscription license covers everyday use, chat, Office, and quick responses. Meanwhile, Cowork, Code, Autopilot, and the most advanced frontier models will be charged on a usage basis (usage-based billing).

Among the “frontier” models mentioned in the announcement are Astra from OpenAI and Fable from Anthropic. This demonstrates that Microsoft continues to operate as a neutral infrastructure provider, selling paid access to the technology of its two biggest rivals while competing directly with products from both.

A race the entire industry is fighting simultaneously

The move comes as no surprise to industry observers. Microsoft has focused its efforts on the corporate Copilot rather than trying to compete directly with ChatGPT in the consumer market. The trend of consolidating chat, automation, and programming into a single app is being replicated by competitors almost simultaneously.

Anthropic itself merged its Cowork with Claude’s main app this month with the launch of Claude Docs. OpenAI has integrated Codex directly into ChatGPT, and Google has been adding features like in-depth research and navigation within Gemini itself.

None of the world’s four largest AI companies has yet separated a “conversational assistant” from an “assistant that performs work.”

Economic efficiency drives usage-based billing

There is also an efficiency argument behind the change. According to Microsoft, the multi-model design of Cowork, which automatically selects which AI to use for each task instead of relying on a single fixed model, has proven to be 30% to 40% cheaper than running everything on one model. This figure helps explain why charging by usage, rather than by a fixed subscription, makes economic sense for the company as AI workloads become heavier and more expensive to process.