Microsoft is working on a new Copilot and could unveil it at the company’s Build conference next week, according to an internal memo viewed by Business Insider.
The software giant also has grand “Agent Factory” ambitions, and is developing new ways for corporate customers to manage AI agents alongside human employees, the memo shows.
The Tenant Copilot project is run by the organization behind the Microsoft 365 business. This new Copilot is designed to “rapidly channel an organization’s knowledge into a Copilot that can ‘talk,’ ‘think,’ and ‘work’ like the tenant itself,” according to an April 14 email sent by Microsoft executive Jay Parikh.
A “tenant” is the term used to describe corporate users of the Microsoft 365 suite of business applications. A Copilot that has access to these tenants would essentially be able to access customer information stored within their Microsoft 365 accounts.
Parikh explained in the email that Microsoft is using different AI techniques to power the Tenant Copilot feature. Supervised fine-tuning helps “to capture a tenant’s voice.” The tool will also tap into OpenAI’s o3 reasoning model “to shape its thought process.” Lastly, “agentic” fine-tuning will “empower real-world tasks,” he wrote.
Microsoft at the time planned to offer a public preview of Tenant Copilot at Build, according to the memo. The company sometimes changes what it plans to announce at the conference.
Meanwhile, the CoreAI Applied Engineering team is also “working to launch a collaborative go-to-market plan for top-tier customers to drive successful adoption of our Al cloud,” Parikh added in the memo.
Microsoft declined to comment.
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Parikh’s ‘Agent Factory’ concept
Parikh is the former head of engineering at Facebook. Microsoft CEO Satya Nadella hired Parikh in October and tapped him in January to run a new group called CoreAI Platform and Tools focused on building AI tools. The group combined Microsoft’s developer division and AI platform team and is responsible for GitHub Copilot, Microsoft’s AI-powered coding assistant.
This year’s Build event will be Parikh’s first at the helm of this new organization. In the email to the nearly 10,000 employees in the organization, Parikh discussed a new “Agent Factory” concept. That’s likely a nod to cofounder Bill Gates, who talked about Microsoft being a “software factory.”
“Building our vision demands this type of culture — one where Al is embedded in how we think, design, and deliver,” Parikh wrote. “The Agent Factory reflects this shift — not just in what we build, but in how we build it together. If we want every developer (and everyone) to shape the future, we have to get there first.”
Parikh has been trying to work across organizations to collaborate on AI agents, through a “new type of cross-product review” combining teams such as security services like Entra and Intune with “high-ambition agent efforts” within LinkedIn, Dynamics, and Microsoft 365.
Meet your new AI agent co-worker
Part of this effort focuses on how to manage AI agents alongside human employees.
Microsoft, for example, has been working on how to handle identity management for AI agents, according to the memo. This technology usually controls security access for human users. Now, the company is trying to spin up a similar system for AI agents.
“Our hypothesis is that all agent identities will reside in Entra,” Parikh wrote, although “not every agent will require an identity (some simpler agents in M365 or Studio, for instance, don’t need one).”
Microsoft is taking a similar approach to M365 Admin Center, which is used by IT administrators to manage employee access to applications, data, devices, and users. Future versions of this system will accommodate AI agents as “digital teammates” of human workers, according to Parikh’s memo.
Microsoft’s Copilot Analytics service is also expanding into broader workforce analytics to give corporate customers a view of how work gets done both by humans and AI agents.
And Parikh aims to make Azure AI Foundry, its generative AI development hub, “the single platform for the agentic applications that you build,” he wrote. “At Build, we will have the early versions of this, and we’ll iterate quickly to tackle a variety of customer use cases.”
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