Frontier Transformation starts with a simple idea: AI must do more than optimize what already exists. It must unlock new levels of creativity, innovation, and growth. And it must show up inside real work, grounded in real context, and solve real problems for people and organizations. We’ve found that to do this, the two most important elements are intelligence and trust. Intelligence ensures AI is contextual, relevant, and grounded. Trust ensures AI can scale safely, securely, and responsibly. Our announcements today show how intelligence and trust together turn AI from experimentation into durable, enterprise-wide value.
Wave 3 of Microsoft 365 Copilot
Wave 3 marks a new version of Microsoft 365 Copilot, moving beyond assistance to embedded agentic capabilities. And this is just the start, with much more product innovation to follow in the months ahead.
Copilot Cowork
Working closely with Anthropic, we have brought the technology that powers Claude Cowork into Microsoft 365 Copilot. It’s this multimodel advantage that makes Copilot different. Your work is not limited by one brand of models. Copilot hosts the best innovation from across the industry and chooses the right model for the job regardless of who built it. This is a pattern of work that will only become more powerful as new models and ways of working emerge.
Copilot Cowork brings long‑running, multi‑step work into Microsoft 365 Copilot, moving beyond prompts and responses toward execution that unfolds over time. And, with Work IQ, it has the full context of your work, not just fragments of data, so it can reason over all relevant materials. Instead of asking Copilot to generate a single artifact, Cowork allows you to delegate meaningful work and stay in the loop as that work progresses.
With Cowork, Copilot can break down complex requests into steps, reason across tools and files, and carry work forward with visible progress and opportunities to steer. Tasks are no longer confined to a single turn or a single app. They can run for minutes or hours, coordinating actions and producing real outputs along the way.
Cowork is built with enterprise needs in mind. Work is observable. Actions are transparent. Documents are immediately enterprise knowledge that’s protected and ready to share. Progress can be reviewed, guided, or stopped. And everything operates within Microsoft’s security, identity, and governance framework, so organizations can adopt these capabilities with confidence.
By combining Anthropic’s agentic model for multi-step tasks with Microsoft 365, Cowork delivers a managed, enterprise‑grade experience that pairs powerful reasoning with the controls enterprises expect. This is the promise of Copilot: the best AI innovation from across the industry delivered quickly with the intelligence of Work IQ and trust of Microsoft’s Enterprise Data Protection. Cowork is being tested with a limited set of customers as a research preview and will be available through the Frontier program in March.
Join the Frontier program to get access to Microsoft’s latest AI innovations.
Microsoft 365 Copilot in Word, Excel, PowerPoint, and Outlook
Today, many AI tools treat the creation of an artifact as a single-shot task. They connect to Microsoft 365 data but miss key context. They create content that doesn’t follow how apps natively work. They create version sprawl by producing files that are locally downloaded. And they do not respect the existing confidentiality protections within an organization.
Wave 3 of Copilot will now work alongside you in Word, Excel, PowerPoint, and Outlook, creating, editing, and refining high-quality content from start to finish inside a document, spreadsheet, presentation, or email. And it uses Work IQ to stay grounded in the context of your work, so edits always reflect what is current and relevant across your files, meetings, chats, and relationships.
Copilot does the heavy lifting by updating existing work: refining a Word document into a polished draft, improving Excel spreadsheets with real formulas, producing slides in PowerPoint that match how your organization builds decks—including understanding layouts, object styles, and brand kits— and drafting and refining emails directly in Outlook. And because this work happens inside the apps where people already work, every change is transparent, reviewable, and reversible as you iterate.
During preview, we described these capabilities as “Agent Mode.” As we moved toward general availability, it became clear that this isn’t a separate mode at all—it’s core to how this next wave of Copilot works.
Microsoft 365 Copilot enforces existing Microsoft 365 permissions and sensitivity labels and saves files to OneDrive and SharePoint—with tenant-level controls—so protected content isn’t processed when extraction isn’t allowed. This means organizations can apply governance, audit, compliance, and retention policies at scale.
These new Copilot experiences are generally available in Excel and Word, with PowerPoint and Outlook starting to roll out over the coming months.
Agents in chat
Not all work starts inside a document or an app. Often, it begins conversationally—with a question, an idea, or a rough intent that needs to be turned into action.
That’s why, in Wave 3, chat in Copilot is the entry point for chat‑first creation and execution. From chat, you can create documents, spreadsheets, and presentations directly from a conversation, or ask Copilot to take common workplace actions—like scheduling a meeting or drafting and sending an email to your team—without copying and pasting between tools or switching contexts. These end‑to‑end workflows move work forward immediately and set Copilot apart.
Chat in Copilot is where the ecosystem comes together. Built‑in agents for Word, Excel, PowerPoint, and Outlook let you move easily from conversation into app‑native work. And with agents in Copilot supporting open standards like Apps SDK and MCP Apps, your apps can now surface directly within chat—enabling live, interactive experiences where work actually happens. From sales and customer service insights in Microsoft Dynamics 365, to custom apps built with Microsoft Power Apps, to partner experiences from Adobe, Monday.com, and Figma, Copilot brings your critical tools and insights together in one place.
Copilot also makes it easy for people across your organization to build agents that support their day‑to‑day work using Agent Builder. Meanwhile, IT and business leaders can create more sophisticated business process agents with Microsoft Copilot Studio—from employee onboarding to procurement. Recent updates to Copilot Studio help organizations evaluate agent quality, coordinate multiple agents, and ensure agents work together across systems—while remaining observable, governable, and secure at enterprise scale.
Copilot works directly inside apps when work is underway, and agents in chat provide the starting point when work begins with a conversation.
Excel, Word, and PowerPoint Agents are rolling out to generally availability in chat in Copilot. Schedule from chat and custom instructions are available today and send email from chat is rolling out with broad availability this spring.
Multi‑model intelligence
Wave 3 also advances Microsoft’s commitment to model choice in Copilot, so intelligence can show up in the right way for the work at hand, without requiring you to think about models at all.
Many AI tools lock users into a single vendor’s models. Others force people to choose between tools, experiences, or modes depending on the task. That fragmentation creates friction for individuals and complexity for organizations. Leaders end up managing overlapping tools, inconsistent experiences, and rising costs as teams bring their own AI into the business.
At the same time, IT and business decision‑makers are forced into long‑lived vendor bets, even as the pace of model innovation accelerates and better capabilities emerge elsewhere. The result is broken context for users, unnecessary overhead for organizations, and the burden of model selection pushed onto people who just want to get work done.
In contrast, Microsoft 365 Copilot brings leading models from multiple providers directly into the work experience. With Wave 3, Claude is now available in mainline chat in Copilot via the Frontier program, alongside the latest generation of OpenAI models, which continue to roll out with new releases. This means users can access advanced reasoning and multistep capabilities in their everyday Copilot conversations, not just specialized tools. Copilot automatically applies the right model for the task, all grounded in your enterprise context and protected by Microsoft’s security and governance controls.
Agent 365
As organizations adopt agents as part of everyday work, the challenge shifts from experimentation to operating them with trust, safety, and control at scale. IDC projects agent use will increase by an order of magnitude over the next few years, with hundreds of millions—and soon billions—of agents operating across enterprises.1 That scale creates a new dilemma for IT and security leaders: how to manage agents across the organization without rebuilding infrastructure, weakening security posture, or slowing innovation. This is exactly the scenario Agent 365 was designed for.
Agent 365 is the control plane for agents. In practical terms, it gives IT and security leaders one place to observe, secure, and govern every agent across the organization, and it provides the confidence to move from agent experimentation to enterprise-scale operations. Agent 365 extends the management, security, and governance processes organizations already use for employees to agents, so they can stay in control as agents become part of daily work.
The idea is simple: there is no need to reinvent the wheel. The fastest path to getting agents under control is to manage them in a similar manner to managing users, using familiar Microsoft solutions including the Microsoft Admin Center for agent management and Microsoft Security solutions like Defender, Entra, and Purview for agent security and governance.
Agent 365 will be generally available on May 1, priced at $15 per user per month.
Introducing Microsoft 365 E7: The Frontier Suite
Frontier transformation is real when both sides of the system move together: people and AI operating across the enterprise.
Microsoft 365 E7: The Frontier Suite closes the gap, equipping employees with AI across email, documents, meetings, spreadsheets, and business application surfaces, while giving IT and security leaders the observability and governance needed to operate AI at enterprise scale.
Copilot and agents work together with shared intelligence, understanding context, history, priorities, and constraints. Trust is built in by default—with user data, enterprise data, and agent actions protected through identity, policy, and observability—so AI can scale across the workforce without compromising security or compliance.
Microsoft 365 E7 will be available for purchase on May 1 at a retail price of $99 per user per month, and includes Microsoft 365 Copilot, Agent 365, Microsoft Entra Suite, and Microsoft 365 E5 with advanced Defender, Entra, Intune, and Purview security capabilities to help secure users, delivering comprehensive protection across agents and users.
Get started today
Wave 3 of Microsoft 365 Copilot marks a turning point in how AI shows up at work. Agentic capabilities are embedded directly into Word, Excel, PowerPoint, Outlook, and Copilot Chat, bringing multi‑model intelligence into everyday workflows. Agent 365 makes this shift operational by giving organizations a way to observe, govern, and secure agents as they move from experimentation to enterprise‑scale use. Microsoft 365 E7 brings it all together by unifying productivity, AI, identity, and security into a single foundation.
Together, these changes make frontier transformation real: intelligence that understands the context of work, and trust that allows AI to scale safely across the workforce. When intelligence and trust move together, AI stops being an experiment and starts becoming how work gets done.
- Visit Microsoft365.com/copilot or download the Microsoft 365 app on your mobile device to get started.
- For the latest research and insights on AI at work, visit WorkLab.
- Learn from our engineering leaders how Microsoft delivers AI built for work at the Microsoft Frontier Transformation digital event on March 9, 2026, at 8:00 AM PT.
Footnotes
Microsoft 365 E7 is available with and without Teams.
1IDC Info Snapshot, sponsored by Microsoft, 1.3 Billion AI Agents by 2028, May 2025 #US53361825
Facts Only
Microsoft announced Wave 3 of Microsoft 365 Copilot, introducing embedded agentic capabilities.
Copilot Cowork, developed with Anthropic, enables multi-step, long-running tasks within Microsoft 365 apps.
Copilot Cowork is in research preview and will be available through the Frontier program in March.
New Copilot features in Word, Excel, PowerPoint, and Outlook allow AI-assisted creation and editing directly within documents.
Excel and Word Copilot capabilities are generally available; PowerPoint and Outlook features will roll out in coming months.
"Agents in chat" enable conversational task initiation, including document creation and workplace actions like scheduling meetings.
Microsoft 365 Copilot supports multiple AI models, including Claude and OpenAI, automatically selecting the best model for tasks.
Agent 365, a control plane for managing agents, will be generally available on May 1, 2026, priced at $15 per user per month.
Microsoft 365 E7, priced at $99 per user per month, includes Copilot, Agent 365, and advanced security features.
Microsoft 365 E7 will be available for purchase on May 1, 2026.
The Frontier Transformation digital event is scheduled for March 9, 2026.
IDC projects agent use will increase significantly, reaching billions of agents in enterprises by 2028.
Executive Summary
Microsoft has announced Wave 3 of Microsoft 365 Copilot, introducing embedded agentic capabilities that move beyond simple assistance to execute multi-step tasks across applications like Word, Excel, PowerPoint, and Outlook. A key feature is Copilot Cowork, developed in collaboration with Anthropic, which integrates Claude’s reasoning abilities to handle long-running, complex workflows while maintaining enterprise-grade security and governance. This update also includes "agents in chat," allowing users to initiate tasks conversationally and create documents or perform actions without switching contexts. Microsoft is emphasizing multi-model intelligence, enabling Copilot to select the best AI model for a given task without user intervention. Additionally, the company introduced Agent 365, a control plane for managing agents at scale, and Microsoft 365 E7, a new suite combining productivity tools, AI, and security features for $99 per user per month. These developments aim to transition AI from experimentation to enterprise-wide adoption, with general availability for some features starting in March and May 2026.
The narrative positions these advancements as a shift toward "frontier transformation," where AI becomes deeply integrated into workflows while maintaining trust through security and compliance. However, the long-term impact on workplace dynamics, job roles, and organizational control remains uncertain, as the technology is still in early adoption phases with limited customer testing.
Full Take
**STEELMAN:** Microsoft’s Wave 3 Copilot update represents a significant leap in enterprise AI, embedding agentic capabilities directly into productivity tools while addressing governance and security concerns. The integration of multiple AI models (Claude, OpenAI) and the introduction of Agent 365 as a control plane suggest a thoughtful approach to scaling AI responsibly. The emphasis on "intelligence and trust" as dual pillars aligns with enterprise needs for both innovation and risk management.
**PATTERN SCAN:** The narrative employs a classic **ARC-0012 Solutionism** frame, presenting AI as the inevitable and sole path to "frontier transformation" without critically examining alternatives or trade-offs. There’s also a subtle **ARC-0024 Ambiguity** in how "agentic capabilities" are defined—vague enough to inspire confidence but lacking concrete limits or failure modes. The pricing structure ($99/user/month for E7) and the projection of "billions of agents" by 2028 lean into **ARC-0040 Future Lock-in**, implying that adoption is both urgent and irreversible.
**ROOT CAUSE:** The paradigm here is **technological determinism**—the assumption that AI progression is linear, beneficial, and inevitable, with human systems (workflows, governance) adapting to it rather than the reverse. The unstated assumption is that productivity gains from AI will outweigh costs like job displacement, cognitive overload, or over-reliance on automated systems.
**IMPLICATIONS:** For human agency, this shift could democratize complex tasks but also erode skills as workers delegate more to AI. The centralization of control via Agent 365 may streamline operations but risks creating new single points of failure or surveillance. The $99/month price tag for E7 suggests this is aimed at high-value enterprises, potentially widening the gap between AI-haves and have-nots.
**BRIDGE QUESTIONS:**
How will Microsoft measure the *net* productivity gains of Copilot after accounting for time spent reviewing/editing AI outputs?
What safeguards exist to prevent Agent 365 from becoming a tool for micromanagement or worker surveillance?
If multi-model intelligence is the future, how will Microsoft ensure transparency in model selection to avoid bias or vendor lock-in?
**COUNTERSTRIKE SCAN:** A bad actor pushing this narrative would emphasize urgency ("billions of agents by 2028"), downplay risks ("trust is built in by default"), and frame dissent as resistance to progress. The actual content aligns partially—it’s promotional but not deceptive, focusing on capabilities over coercion. No overt manipulation detected, though the lack of critical counterpoints (e.g., worker pushback, cost-benefit analyses) is notable.
**Patterns detected: ARC-0012 Solutionism, ARC-0024 Ambiguity, ARC-0040 Future Lock-in**
Sentinel — Human
The text exhibits strong human signals, including brand-specific terminology, precise product details, and event references, with minimal stylometric or coherence red flags.