As Windows Turns 40, Microsoft Rebuilds It for the AI Era

While some companies claim they’re building an agentic operating system, Microsoft is doing it at a far larger scale—and you won’t need a Copilot+ PC to see it. At this year’s Ignite conference, the software maker is rolling out a broad slate of Windows upgrades, including deeper Copilot integration, AI-driven system management, expanded personalization and productivity features, stronger security and compliance tools, wider cross-platform support, and built-in agent connectors, workspace, and new APIs.

In other words, Microsoft is updating its 40-year-old operating system for the agentic era. By embedding AI bots into core software, the company is aiming to make day-to-day work more collaborative between humans and machines—part of a broader push to help organizations move towards what it calls “Frontier Firm” status.

Microsoft has already embedded AI agents across its cloud apps and browser. Now, it’s turning to Windows, the operating system billions rely on for productivity and collaboration. By integrating agents directly into the OS, the company hopes to make AI a seamless part of daily work—handling routine tasks, offering context-aware assistance, and connecting workflows across apps.

“Last year at Ignite, we introduced the ‘Era of AI,’” writes Pavan Davuluri, Microsoft’s president for Windows and devices, in a blog post. “This year, we’re evolving Windows to empower people to easily, securely, and confidently leverage the full power of AI. Whether it’s incorporating AI tools in their workflow or choosing to use AI agents to perform tasks on their behalf, Windows is becoming the canvas for AI—embedding intelligence into the system, silicon, and hardware, so organizations can move from experimentation to execution at scale.”

Here’s a look at what’s coming to Windows:

MCP on Windows with Agent Connectors and Workspace

Microsoft introduced Model Context Protocol (MCP) support for Windows in May. However, it was only available as a private developer preview. Six months later, MCP on Windows is being upgraded to “preview” and now features native agent connectors and an agent workspace.

Using the agent connector, developers can make their Windows apps discoverable to local AI agents. These bots can then be registered within Windows’ on-device registry. Developers can also utilize MCP on Windows to activate agent connectors, enabling them to complete tasks for end users, such as scheduling, file management, email drafting, or executing cross-application workflows; however, permissioning will be granted by the user on the device.

Currently, Microsoft offers two types of agent connectors: one for local file searches and another for modifying a device’s Windows settings, including Bluetooth, network, and other features. Both of these features are currently in preview.

Microsoft is also introducing a security environment called Agent workspace. This is an isolated, policy-controlled, and auditable space where all interactions involving MCP and computer-using agents will operate. It bears some similarities to the Mirror Dimension from “Doctor Strange,” in which an entirely separate layer of reality exists, and what happens there doesn’t affect the real world. In the Agent workspace’s case, bot interactions won’t disrupt a user’s main session in Windows—and it actually exists. Microsoft announces that the Agent workspace is now available in private preview.

“This integration isn’t just about adding agents; it’s about making them part of the OS experience,” Davuluri explains. “By embedding agent capabilities into core Windows services, Copilot and other agents are able to orchestrate tasks across apps, files, and system functions while the operating system is built to help ensure user security, consent, and control.”

Introducing Windows 365 for Agents

For users running cloud-based Windows, Microsoft is releasing a tool that helps developers build bots for this OS. Called Windows 365 for Agents, it offers modular UI controls, enterprise-grade security, and support for both Windows and Linux environments. Similar to agents on desktop Windows, Windows 365 for Agents promises to create agents that open apps, process data, and automate tasks on a Cloud PC.

Microsoft describes Windows 365 for Agents as the “backbone” for some of its “most advanced” AI initiatives, stating that it serves as the execution platform for those agents built into Microsoft Copilot Studio for computer use. To demonstrate this capability, the company has developed Researcher with Computer Use, a solution leveraging Cloud PCs running a Linux environment. This technology allows users to automate website navigation and use the command-line terminal to do advanced, code-driven tasks.

Some developers that are already building on Windows 365 for Agents include Manus AI, Fellou, Genspark, Simular, and Tinyfish. Manus AI, for example, uses non-domain-joined Cloud PCs to run its automated PowerPoint creation and editing tool, relying on Windows 365 for Agents for broader deployment and stricter access controls.

Those interested in trying out Windows 365 for Agents can sign up on the waiting list.

New Ways to Access and Manage Windows Agents

Now that agents are part of the operating system, how can people access them? Do they need to submit instructions online? Nope, because Microsoft has a new way to access bots locally, and it’s through the taskbar.

With the new “Agents on the taskbar,” Microsoft hopes agent usage will be just as easy and common as running an application on Windows. Users can initiate an agent task either through the Microsoft 365 Copilot app or the “Ask Copilot” option on the taskbar. The agent, which can also be triggered by typing “@”, will be displayed as an icon with status badges and a hover card that shows its progress and context.

Copilot Gets New Features

Microsoft’s AI assistant is being given new capabilities on Windows, all of which are in preview. They’re designed to provide a more personalized and multimodal experience when using AI.

• Ask Microsoft 365 Copilot: A new action within Click to Do that takes any text or image and sends it directly to Copilot without any context switching.
• Ask Microsoft 365 Copilot in File Explorer Home: Users can click on any file and have Copilot evaluate it or take action, all within the File Explorer. Moreover, hovering over a document in File Explorer will cause AI to “enhance” it.
• Enhanced search with Microsoft 365 federation: Search for files by describing their content. Initially, Microsoft 365 Copilot customers with Copilot+ PCs will be able to search local and cloud documents semantically.
• Writing Assistance: Watch out, Grammarly, because Microsoft is providing built-in rewriting and proofreading help. This feature will also work offline on Copilot+ PCs.
• Voice support: Users can interact with Microsoft 365 Copilot by voice after uttering “Hey Copilot” or using the Copilot key on Windows, all without needing to leave their current app or window.
• Fluid dictation and a more natural and lifelike reading experience: Microsoft is rolling out AI-powered accessibility features, starting with a way on Windows 11 Copilot+ PCs to make voice typing fast, accurate, and natural. Available in preview and as part of the company’s Voice Access suite, fluid dictation promises to turn speech into text more easily. In addition, Microsoft is enhancing its Narrator and Magnifier tools, powered by its Azure text-to-speech models. They’ll generate high-definition voices and adapt to the tone and pace contextually to make interactions feel natural. The updated Narrator and Magnifier are both generally available today.

New Windows AI APIs

Finally, Microsoft is rolling out three new developer tools designed to make it easier to build more capable apps. When used on Copilot+ PCs, these APIs enable AI features to run on-device, rather than in the cloud, thereby reducing latency, enhancing privacy, and lowering costs.

The first API powers Video Super Resolution (VSR), which utilizes AI to enhance low-resolution video streams, resulting in clearer and sharper footage. It’s helpful when having video calls, streaming, and playback. Microsoft says this is available as a preview in WinAppsSDK 2.0 Experimental 3.

The next tool will run Stable Diffusion XL right on Copilot+ PCs. Also available in preview through WinAppsSDK 2.0 Experimental 3, it enables high-quality text-to-image generation directly on the device without needing the cloud.

The third API involves Phi Silica, the smallest variation of all Microsoft’s Phi models that’s designed for use in Windows applications. This SLM is explicitly built for the Copilot+ PC’s Neural Processing Units (NPUs), running locally to provide text generation and summarization. Microsoft claims developers using the API are seeing a 40 percent boost in performance. However, to access Phi Silica, a Limited Access Feature (LAF) token is required.

“As we mark 40 years of Windows, this isn’t about looking back; it’s about building the future. The next chapter starts now,” Davuluri proclaims. “The announcements at Ignite 2025 are more than just features—they establish Windows as the canvas for AI and the execution fabric for people and the future of work.”

“Whether you’re equipping frontline workers, knowledge employees, or developers, Windows is the platform that brings it all together,” he continues. “From empowering teams with Windows 365, enabling secure hybrid work with Copilot+ PCs, and supporting the next generation of AI-powered apps and agents, Windows delivers a foundation that’s secure, manageable, and ready for what’s next.”

Featured Image: Microsoft logo displayed at the company's 2025 Build conference in Seattle, Wash. Credit: Ken Yeung