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Microsoft has introduced a new version of Copilot that brings AI agents, Office tools, and a new Code feature into a single experience. The company is positioning the updated Copilot as a place where users can ask questions, delegate longer tasks, create documents, and build small software solutions.
The update adds three key capabilities: Home, Code and Autopilot. Home brings Chat and Cowork together, while Office in Copilot adds Word, Excel and PowerPoint capabilities. Code allows users to create apps, dashboards and workflows using natural-language instructions.
Microsoft said Home will become Copilot's starting point. Chat is designed for questions, lookups and drafting, while Cowork handles multi-step tasks and produces a completed result. Eventually, Copilot will be able to determine whether Chat, Cowork or Code should handle a request without requiring users to select a mode themselves.
Users will also be able to create or update Word documents, Excel workbooks and PowerPoint presentations directly through Copilot. Files will remain editable and can stay synchronized with the corresponding Microsoft 365 applications.
Microsoft's new Code feature is designed to help non-developers create small, purpose-built software solutions. Users can describe an app, tracker, dashboard, automation, or workflow in natural language, after which Copilot builds it.
Code uses the same underlying technology as GitHub Copilot and operates in a sandboxed environment. Solutions can include desktop widgets, interactive dashboards and cloud-hosted internal applications.
Code is scheduled to enter Microsoft's Frontier program at the end of the month, with broader availability planned in the following weeks. A preview will also be available to Microsoft 365 Premium and Pro subscribers later this year.
Also Read: CTO Guide to AI Agent Infrastructure: From Copilots to Autonomous Systems
Autopilot, previously known as Scout, is Microsoft's persistent agent designed to continue working after a user assigns it a goal. Users can give it a name, role, and objective, after which it can monitor channels, follow up on conversations, and handle recurring work.
The agent operates in the cloud and has its own identity, memory, computer, and workspace within an organization's tenant. Autopilot is designed to work across Teams, Outlook, chats, channels and documents while remaining subject to permissions, auditing and organizational controls. It will expand to private preview at the end of September.
Microsoft is expanding Copilot's access to business context through Microsoft IQ. Fabric IQ brings data from Power BI semantic models into Copilot. At the same time, integration with Dynamics 365 and Power Platform is planned for public preview.
A new plugin registry will also bring Microsoft, partner, and custom-built plugins into one catalog, allowing administrators to approve and manage plugins centrally.
Microsoft is also adding FinOps capabilities to manage AI spending. A user subscription license covers Copilot across applications such as Word, Excel, PowerPoint, Outlook and Teams, while usage-based billing applies to Cowork, Code and Autopilot. New administrative controls will let organizations manage spending policies, model availability, and credit requests.
