Microsoft’s Radical Bet Turns Windows Into an AI Playground

Microsoft is transforming Windows into an agentic AI platform, marking one of the biggest shifts in the operating system’s history as the software giant starts building the underpinnings of the new open, agentic web.

At this week’s Microsoft Build 2025, CEO Satya Nadella said the internet’s legacy systems need to be reconfigured to work with the coming wave of AI agents.

“We’re just about getting into these middle innings of another platform shift, and these middle innings are where all things happen,” Nadella said.

The CEO noted that in past technology transformations – such as the cloud and mobile — after the initial wave of early adoption, software engineers get to work in the “middle innings” to transform visions into a practical reality. Nadella said this is where generative AI is today.

“In 2025, we’re building out this open agentic web at scale,” Nadella said.

Microsoft’s moves come at a time when companies are rapidly adopting GenAI as a way to build a competitive edge, according to PYMNTS data. Nearly two-thirds of product leaders use the tech to innovate, while more than a third use it to collect feedback on those products.

Read more: From Spark to Strategy: How Product Leaders Are Using GenAI to Gain a Competitive Edge

Retooling the Tech

At Build, Microsoft announced a slew of foundational updates that will enable autonomous AI agents to reason, act, and collaborate directly within Windows, turning the world’s most widely used desktop operating system into an intelligent platform for a new generation of software.

The move is part of Microsoft’s broader strategy to build out what it calls the ‘agentic web,’ where intelligent agents can seamlessly interact with data, apps, and users.

To that end, Microsoft is directly embedding Model Context Protocol (MCP) into Windows. Developed by Anthropic, MCP is a protocol that allows agents to interact with your computer.

“We’re going to be doing a whole bunch of work over the next handful of months with our partners and collaborators at Anthropic to make sure that the really tough enterprise problems that need to be solved on top of a protocol like MCP get resolved,” Nadella said.

See also: Microsoft’s Nadella: AI Agents Serve as ‘Chiefs of Staff’

Using MCP, AI agents like GitHub Copilot can do more than write code; they can also install software, access files and folders, change system settings, open and interact with apps — with the user’s approval.

According to the PYMNTS Intelligence report, Payments Execs on Agentic AI: ‘The Back Office Will Never Be the Same,’ MCP is revolutionary. It serves as the lingua franca for AI models to communicate back and forth, and a game-changing technology that produces better outcomes than previously manual efforts.

Read more: Payments Execs on Agentic AI: ‘The Back Office Will Never Be the Same

Turning Any Aebsite Agentic

Supporting this shift is the Foundry Local, Microsoft’s new tool that lets your PC run AI features without needing the internet. It lets apps and assistants think, act, and help directly on the device for faster responses and better privacy.

Foundry Local is built into Windows and works with new AI-powered PCs, making it easier for developers to create intelligent software that understands what users need and gets things done for them.

Sarbjeet Johal, founder of tech search firm Stackpane, said on X that combining native support for MCP on Windows with Foundry Local is a “killer combination for developers.”

Also unveiled at the conference is Copilot Tuning, a new feature that allows enterprises to fine-tune or customize AI agents using their own data, tone, and workflows. Developers can train models that reflect a company’s legal style, financial knowledge, or industry-specific jargon.

This capability ensures that agents go beyond being general-purpose assistants — they also become experts of the data and processes of each organization.

See more: Microsoft to Retire Bing Search APIs, Promote Azure AI Agents

Microsoft also announced NLWeb, an open standard that can transform any website into an agentic website. It lets AI agents understand and take action on web content.

“The idea behind NLWeb is it is a way for anyone who has a website — or an API — to very easily make their website or their API an agentic application,” said Microsoft CTO Kevin Scott at the conference.

It’s like “HTML for the agentic web,” Scott added.

Microsoft is working with companies like Tripadvisor to deploy NLWeb so their websites can let AI agents search and book trips directly.

Read more: Forget Browsing. The Agentic AI Internet of Tomorrow Will Find You First

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