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Copilot gaining new features for action-taking and memory

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Microsoft ( MSFT ) faces heavy AI competition as it turns 50 years old

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CEO Satya Nadella pushes for next innovation

By Jeffrey Dastin

REDMOND, Wash, April 4 (Reuters) - Thousands of people swooned in a dark conference hall that felt more like a rock concert when a Microsoft ( MSFT ) product manager demonstrated the company's latest feature: how to sum numbers in Excel, with the click of a button.

"It was literally like Mick Jagger walked out," said Yusuf Mehdi, Microsoft's ( MSFT ) consumer chief marketing officer, who started as an intern.

That was more than 30 years ago. On Friday, the day Microsoft ( MSFT ) turned 50, the company's leaders and staff gathered at its Redmond headquarters to remember the software maker's glory days while trumpeting what they hope will bring it into the future: more powerful artificial intelligence.

Copilot, Microsoft's ( MSFT ) AI assistant, is gaining a host of new features to make it more proactive. The version for consumers will start remembering personal facts about them. It will offer birthday reminders or support ahead of a presentation, or consumers can opt out, Mehdi said in an interview.

Copilot likewise will personalize podcasts and shopping recommendations, and it will let consumers task their AI to book events for them, or send a friend a gift while checking in for guidance. "It frees you up," said Mehdi.

Microsoft ( MSFT ) is hardly first to roll out action-taking or "agentic" software. As with rival systems, the AI will work best on popular sites where Microsoft ( MSFT ) has done some behind-the-scenes technical work, like with 1-800-Flowers.com ( FLWS ) and OpenTable, Mehdi said.

Mehdi recalled days when Microsoft ( MSFT ) was smaller and growing. He said CEO Bill Gates could devour three books' worth of information from one day to the next, at a time when the co-founder still worked on Microsoft ( MSFT ) software. Mehdi watched Steve Ballmer, Gates' eventual successor, chant "developers, developers, developers!" in a sweat-drenched shirt to rouse a crowd into the ".net" era.

Microsoft ( MSFT ) went from top of the pack to badly bruised in a high-profile lawsuit that U.S. antitrust enforcers brought against it in 1998. Years later, younger companies and startups, among them Alphabet and ChatGPT creator OpenAI, beat it to the punch on key AI developments.

Satya Nadella, Microsoft's ( MSFT ) current CEO, is not standing still. The leader who turned Microsoft ( MSFT ) into the No. 2 cloud powerhouse challenged his executives at an internal summit this week, recalled Mehdi: "How do we rethink the way that we build the software?"

Microsoft ( MSFT ) is iterating on its chatbot technology in a crowded field that includes Elon Musk's xAI and Anthropic. It has added Copilot to its heavily used productivity suites for business while giving consumers a distinctive version.

"It's warm; it has that personality," said Mehdi. Some users have taken to this, while others find it asks too many questions, he said.

"When we get to now be more personalized, we can start to get smarter," Mehdi said. "We're part way through that journey." (Reporting By Jeffrey Dastin in Redmond, Washington; Editing by David Gregorio)