This week’s Microsoft earnings call delivered noteworthy updates on Microsoft 365 Copilot and AI agent momentum, including multi-thousand-seat customer implementations, as well as visibility into AI agent rollouts by large Dynamics 365 customers.
In addition, the company laid out key trends in AI usage among developers, security customers, and the healthcare industry.
This detail provides valuable context to supplement major financial developments including a massive jump in remaining performance obligation (RPO), as detailed in Cloud Wars founder Bob Evans’ analysis of Microsoft earnings. Those RPO gains are largely powered by Microsoft’s work with OpenAI.
Chairman and CEO Satya Nadella said his firm’s AI growth numbers, as detailed below, are noteworthy for their speed and breadth. “We are still in the beginning phases of AI diffusion and its broad GDP impact, and already we’ve built an AI business that is larger than some of our biggest franchises that took decades to build,” Nadella said in a LinkedIn post following the earnings call.
Copilot, Agent Inroads
There are several noteworthy figures indicating broad adoption of Copilots and agents, but I’ll start out with several large deployments that give insight into adoption by customers on the leading edge of AI.
Microsoft noted that the following organizations, spanning financial services, government, and education, purchased over 35,000 Copilot seats in the second quarter:
- Financial services: Fiserv, ING, Westpac
- Government: NASA, US Department of the Interior
- Education: University of Kentucky, University of Manchester
The financial services wins detailed above follow last week’s disclosure by BNY that is now has well over 100 “digital employees” or agents in use performing a wide range of tasks. The bank had previously provided visibility into its wide range of AI use cases and its approach of making the technology widely available to employees.
In addition, the global communications firm Publicis purchased close to 100,000 seats for use by nearly all its employees.
Microsoft noted that built-in agents for Dynamics 365 are being embraced by marquee customers: Visa is using the Customer Knowledge Management agent to convert customer conversations into knowledge articles, while Sandvik is using the Sales Qualification Agent to automate lead qualification across tens of thousands of potential customers.
In addition to that customer context, Microsoft shared a quarterly rollup that reflets Copilot deployment and usage more broadly; this included:
- 365 Copilot daily active users increased 10X year-over-year
- 365 Copilot seat adds were up 160% year over year
- There are now 15 million paid 365 Copilot seats
Development Drivers
Copilot Studio and GitHub businesses are especially important as Microsoft increasingly aims to make agent development as broadly accessible as possible — including for ordinary business users — while automating development work to the maximum extent.
The company noted that the German industrial giant Siemens – a longstanding Microsoft customer and partner in an AI context — is adopting the full GitHub platform to increase developer productivity, after a successful Copilot rollout to 30,000 of developers.
In addition, it said more than 80% of Fortune 500 companies are using agents that were built with Copilot Studio and Agent Builder, its low-code/no-code tools. Meantime, Copilot Pro+ subscriptions for individual developers are up 77% year over year.
Applying AI and Agents to Security Challenges
Microsoft has made a major push in recent months to broaden security functionality on the strength of AI; that included building and delivering a set of security-focused aqents within its software stack.
The company noted one customer utilizing those agents, Icertis, whose security operations center team is using Microsoft agents and has reduced manual triage time by 75%. Icertis is a developer of AI-powered contract lifecycle management.
Microsoft added that its Purview data security and governance platform audited 24 billion Copilot interactions in the past quarter, a 9x increase from one year earlier and a solid indication of the rapidly expanding need for AI governance.
Vertical Industry AI
The final category I’ll highlight from the Microsoft report is vertical industries, with a particular focus on healthcare as well as science and engineering.
We’ve previously documented the impact of AI in healthcare, including for clinicians. In its quarterly report, the company said Mount Sinai Health is advancing a system-wide Dragon Copilot deployment for healthcare providers after trialing the technology with its primary care physicians. In the most recent quarter, Dragon Copilot was used in documenting 21 million patient encounters, a 3x increase year over year.
In science and engineering, consumer goods company Unilever and design automation firm Synopsys are using Microsoft Discovery to orchestrate R&D-focused AI agents. Discovery is a platform designed to accelerate discovery in biology, chemistry, and physics using agentic AI. Unilever and Synopsys are using Discovery to reason over scientific literature and internal knowledge, create simulations, and drive new discoveries.
Despite the positive indicators from the Microsoft report, including the RPO figure, investors reacted negatively to its planned AI infrastructure spending, driving its stock down 10% on Thursday. It was the largest one-day percentage decline for Microsoft in nearly six years.
