Satya Nadella

“We are also accelerating our own model development.”

“Copilot revenue accelerated over 60% quarter-over-quarter.”

“And we will be among the first cloud providers to deploy next-generation rack-scale AI infrastructure based on AMD Helios and NVIDIA Vera Rubin.”

“When it comes to knowledge work, we now have over 30 million paid Microsoft 365 Copilot seats, with net seat adds more than doubling quarter-over-quarter.”

“This is the system we are using in our products with great results.”

“Customers are rapidly adopting our AI-optimized databases like Cosmos DB and PostgreSQL, to give agents fast, secure access to real-time data and context they need for memory and retrieval.”

“When it comes to Xbox, we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth.”

“Just 2 months after launch, hundreds of enterprise customers have already purchased millions of seats.”

“The next layer is the enterprise data in context.”

“And this quarter alone, we cut latency by 25%.”

“That's the way to think about it, right, which is you can't be subject to the refusal of one model.”

“We now have 100,000 Foundry customers and revenue more than doubled year-over-year.”

“And so in my mind, I think you've got to get the product shape right.”

“And therefore, there is a tremendous opportunity to turn customers' workflows, domain knowledge, and accumulated judgment into AI systems that learn and improve with every usage.”

“In security, we are helping customers both secure their AI deployments and use AI to strengthen their security posture.”

“But more importantly, we are building a new model system where the harness, context, memory, and action space are separate from any one model family, thereby moving the frontier on the cost-to-outcome curve.”

“And I said, "Build me a new sort of Power BI dashboard, essentially." But here is the thing.”

“To help customers capture that opportunity, this month we launched Microsoft Frontier Co., the largest outcome-driven engineering organization in the industry.”

“Going forward, we have 2 goals; first, ensuring AI empowers every person, amplifying their agency, and ambition; and second, empowering every organization to build their own continuous learning loop and ensuring that they don't outsource their core IP.”

“Across both our high-value agentic experiences and the AI platform and infrastructure, we are focused on helping customers turn AI into measurable outcomes.”

“In search and advertising, Bing and Edge have both taken share for 5 straight years.”

“And by the way, it's all registered with Agent 365, right?”

“We see significant opportunity for Windows to become the offload for unmetered intelligence, combining powerful on-device compute with enterprise-grade security.”

“On top of this data estate, we are building an IQ layer that combines data with model capabilities to deliver the right context at the right time.”

“And LinkedIn continues to see strong engagement across the platform with double-digit member growth for the fifth consecutive year.”

“So the TAM is much more expansive.”

“Just last week, we announced a partnership with Mistral to bring its models to Microsoft Sovereign Cloud, enabling customers to run them across public, customer-controlled, and fully disconnected environments.”

“This is the first time where you really have an enterprise-wide tool which has a both per seat and usage-based pricing.”

“So you're able to take that enterprise-wide workflow and wire it into the super app, right?”

“Levi Strauss & Co., for example, is using models from OpenAI and Anthropic on Foundry as it brings more than 1,000 domain-specific agents into a unified enterprise AI platform.”

“It's not something that will just show up at the end.”

“Over the last 3 quarters, user satisfaction scores have doubled and are now at an all-time high.”

“We are also bringing capacity online faster than ever.”

“Copilot is evolving rapidly, from chat to Cowork to Autopilots.”

“Beyond model choice, data, and context, we are building Foundry as the complete app and agent stack.”

“It also has the added benefit of business continuity and resilience because every model is substitutable.”

“And this quarter, EY deployed E7 to 400,000 employees in our largest win to date.”

“In closing, I'm energized by the opportunities ahead.”

“There's no reason not to.”

“Tens of thousands of customers, including nearly 90% of the Fortune 500 are already grounding their agents in enterprise context with Foundry, Fabric, and Work IQ.”

“In Windows, we are investing to ensure that it has the best quality and fundamentals while also ensuring it's the best place to run secure edge AI.”

“And if you think about even the usage side, that's a place where, again, lots of interesting data there, right, which is time to usage has drastically come down.”

“I've never been more confident in Microsoft's opportunity to drive durable long-term growth and ensure the benefits of AI flow broadly.”

“We offer the broadest model catalog in the cloud with over 11,000 models, including the latest from OpenAI, Anthropic, Mistral, xAI, as well as our own MAI family.”

“Telefónica, for example, adopted Foundry as the foundation of its corporate agentic platform, with its first wave of agents tackling mission-critical network operations.”

“So given that direction of travel, we are very, very clear about the architectural sort of design of the platform, which is you've got to keep your harness separate from the model.”

“In health care, we are on pace to automate over 100 million patient encounters this calendar year, including 28 million this quarter, up 2x year-over-year.”

“When it comes to developers, GitHub Copilot now has 50 million users.”

“Our Cobalt VMs are powering both our own first-party workloads as well as workloads for customers, including Adobe, Arm, Elastic, OpenAI, Sprinklr, and TomTom.”

“When it comes to running agents, CPUs are just as important as GPUs.”

“This quarter, we introduced usage-based billing and have continued to see business and enterprise seat growth and also significant consumption revenue after the new model went into effect.”

“And this quarter, we introduced Web IQ, which gives agents access to real-world intelligence from across the web.”

“It was a very strong close to what was a record fiscal year for us.”

“Finally, let me talk about devices and consumer.”

“But the secular shift is clear, and we're very bullish about us coming with the right sort of mix of business and the right margin structure and most importantly, with the right value for our customers.”

“For example, millions of developers have used MAI-Code-1-Flash on GitHub Copilot achieving higher code acceptance rates and 10% lower median token usage, while still having access to frontier capabilities from OpenAI and Anthropic.”

“You have to recognize the breadth, the geo mix, the segment mix, the workload mix and you got to really think about all of those when you're even building capacity.”

“Over the last fiscal year, we have reduced dock-to-live times for new GPUs in our largest regions by nearly 50%.”

“NHS England, for example, is rolling out Copilot to 505,000 clinicians and staff, the largest health care deployment of its kind after a trial showed it saved employees an average of 43 minutes per day.”

“All up, GitHub now has 225 million users as organizations across every industry, including over 90% of the Fortune 500 choose GitHub for their AI-powered development.”

“The frontier is about every firm having a frontier and the choice, the cost control, and the capability that they need in order to be able to control their destiny.”

“And we want to democratize that design pattern so that every enterprise can use it.”

“These quality improvements, together with continued product innovation, are driving record usage intensity.”

“Customer service is at the forefront of this transformation, with usage-based credit consumption in this category up 4x quarter-over-quarter, with customers like Northern Trust using our tools to drive proactive intelligence.”

“Just 2 months in, Agent 365 now has nearly 40 million agents registered across tens of thousands of companies.”

“PostgreSQL revenue was up 55%, accelerating for the third consecutive quarter.”

“More than 2,500 customers have already used Rayfin and is now powering the backend for apps created with Replit too.”

“It definitely feeds off of all the signals, right, whether it's the defenders -- identity Entra signal, the defender signal, the network signal, the app security signal, all that's sort of helping really do the context so that you can then truly create the protection.”

“As Perception moves beyond private preview, we expect to bring it to customers through a consumption-based offering.”

“The mix of customers is super important.”

“Earlier this month, we added usage-based billing to Cowork with thousands of customers already paying for and actively using it.”

“And then the other one is the business model.”

“In fact, we proved with the MDASH data in CyberGym that essentially, you can have Mythos level performance with 50% less cost because of this MAI Cyber Flash 1 (sic) [ MAI-Cyber-1-Flash ].”

“This quarter, we also introduced Autopilots, autonomous, long-running agents with full enterprise compliance, including always-on personal agent powered by OpenClaw.”

“To date, Purview has audited over 50 billion Copilot interactions to meet compliance obligations, up nearly 360% year-over-year.”

“For example, our FDE teams worked with Novo Nordisk to build an agent that helps analyze clinical data while meeting its strict compliance requirements.”

“That means any given model at any given time is swappable.”

“The usage intensity itself has gone up significantly.”

“We are exposing over 650,000 MCP actions across sales, finance, supply chain, HR, and customer service so that agents can now access business context and take action using the same data models, rules, permission, security guardrails, and audit trails as any application user.”

“And finally, with Agent 365, we offer a control plane that extends companies' existing governance, identity, security, and management frameworks to agents they build.”

“I mean we are talking about usage intensity that's sort of at the same level of what is an everyday communication tool like Outlook or Teams.”

“It delivers 30% better performance per dollar than the latest generation hardware in our fleet and is now supporting both OpenAI and MAI models.”

“And the time from deployment to what we think of as high usage, meaning monthly active usage about 80% across a customers' user base, has fallen from months to just days over the past year.”

“So for example, your CRM system, your ERP system, all of them are just skills and plug-ins that go into Cowork.”

“AI sovereignty is increasingly top of mind for our customers, and we are expanding our offerings to meet that need.”

“That's sort of a lot of what we are focused on.”

“Every customer wants the right model for each task based on quality, latency, cost, and compliance.”

“So at the end of the day, if a firm is a learning machine, they need their own learning machine.”

“I think that, that is now fairly clear, and it's going to become clearer by the day.”

“And we are going further with HorizonDB, our new fully managed PostgreSQL service on Azure, which delivers 3x the throughput of self-managed deployments.”

“So we're already seeing the ARPU growth that comes from things like E7.”

“When the harness will ensure that your memory, your context, all of that is external.”

“For example, we increased the throughput for Copilot workloads 4x since the start of the year.”

“We're also getting more from the infrastructure we already have by optimizing across silicon, systems, and software.”

“You should and you can use frontier models.”

“So the way we are coming at this is, at the end of the day, the goal is to have the firm be in control of their own destiny in terms of what I describe as building their human capital and their token capital, right?”

“In biz apps, we have been reinventing Dynamics 365 for an agent-first world.”

“The most comprehensive and valuable data in the world is inside each of the customer tenants.”

“And we're very excited about Perception and what it means, quite frankly, for our security business going forward.”

“All up, we added another gigawatt of capacity this quarter and remain on track to roughly double our overall capacity in just 2 years.”

“The agentic era is being built on GitHub.”

“All up, the number of Foundry customers at 1 trillion token annualized run rate increased 4x year-over-year.”

“And we have been encouraged by the response to our new E7 suite, as customers increasingly go all in on an integrated AI offering that brings together Copilot, E5, Entra, and Agent 365.”

“And the other thing I'd say is from a resilience perspective, right, for whatever reason, if a given model goes away, then you kind of can't be left high and dry.”

“You need to be able to still continue your cyber operations.”

“Every major coding agent runs on the platform and 1 in 3 pull requests on GitHub now involves an agent.”

“Microsoft Cloud surpassed $214 billion, up 27%, and Azure surpassed $100 billion, up 41%.”

“We're going to be very, very focused on driving customer value and then expanding with it.”

“Our Security Copilot is built that way.”

“The number of conversations per user nearly doubled year-over-year.”

“It gives agents access to the IQ layer, the tools they use along with durable state and memory, secure sandboxes, rubrics and evals, and even their own self-improvement loops.”

“We have the best IP in the industry and talented studios around the world, and believe we can bring these strengths together and expect to return the business to growth in fiscal 2027.”

“And we are also moving from seats to seats plus consumption model.”

“We also continue to modernize our fleet with our own silicon innovation alongside the latest from NVIDIA and AMD.”

“You will maybe need multiple models to even remediate some challenges that get caused by one model, right?”

“In addition to this, we are also evolving our business model beyond per seat to per seat plus consumption, further expanding our TAM and delivering more customer value.”

“And HSBC committed to 200,000 seats to accelerate its workforce transformation.”

“Now let me turn to the end-to-end platform we are building on this infrastructure to run, govern, and distribute apps and agents.”

“We are co-designing these models with our silicon, and we are seeing 40% better performance per watt when running MAI models on Maia 200.”

“More broadly, across our model implementations, we are seeing significant efficiency gains, including 89% reduction of GPU costs in Dynamics 365 with MAI-Voice-2-Flash and up to 84% reduced GPU costs in PowerPoint with MAI-Image-2.5.”

“We announced more than a dozen new models across image, voice, transcription, coding, security, including our first reasoning model MAI-Thinking-1, all with cost-efficient inference at the core for the enterprise use cases.”

“That's really the enterprise design architecture that we are going to evangelize.”

“And earlier this week, we introduced Project Perception, a complete multimodal agentic security system that brings together teams of agents to simulate attacks, investigate threats, and drive remediation.”

“We ourselves are using it.”

“And so what we launched with Perception is essentially saying, let's sort of really make sure that you have the red team agents that know how to find -- constantly are red teaming and finding the vulnerabilities.”

“That, to me, is a classic example of an enterprise-wide workflow.”

“You have to sort of monotonically work at it.”

“Also, the number of PostgreSQL customers also using Foundry increased 80% as customers increasingly choose it as their database for AI workloads.”

“So there's a lot more design space here.”

“All up, our annual revenue surpassed $331 billion, up 18%.”

“In security, MAI-Cyber-1-Flash achieves better performance than much larger Mythos model but at half the cost when combined with our multiagent security harness.”

“And then you've got to run an efficient railroad.”

“Last month, we made Cowork generally available, helping customers complete multistep tasks grounded in their work data while meeting enterprise security and compliance requirements.”

“And we partnered with LSEG to embed AI into LSEG Workspace, helping finance professionals ask complex questions and quickly find answers across structured and unstructured financial content.”

“And by the end of this month, we expect to have our Cobalt 200 racks in over 25 data centers around the world as we rapidly expand capacity.”

“It built a rich semantic model that went into my Fabric with OneLake that brought all the data in from the external sources, in fact, was current with all the SEC filings of all the MAG7.”

“More broadly, we have steadily been improving the quality and performance of Copilot, and have been delighted by the recent customer feedback.”

“We will embed 6,000 industry and engineering experts with customers to co-design, co-innovate, and continuously improve AI systems at scale.”

“The data estate is evolving from primarily supporting apps used by people to supporting agents.”

“Since the start of the year, we have seen 5x increase in the number of customers building with models from multiple providers.”

“Now let me turn to the apps and agents we are building on top of this platform for individuals and organizations.”

“This quarter, we also introduced Rayfin, the agent-first SDK that delivers a backend as a service for building apps on Fabric.”

“And that's what we are trying to build in, whether it's in code, whether it's in cyber, whether it is in knowledge work.”

“So what we are focused on is, first, again, take the same approach we have taken for knowledge work or coding, which is you've got to start with an intelligence-first, model-forward approach.”

“What used to be months is days, right?”

“So you kind of create your own agentic system that's continuously operating to create the cyber defense you need.”

“This is not going to be about come in and take all my knowledge and benefit yourself, whereas I am not getting anything out of it.”

“Average weekly engagement is on par with Outlook and Teams.”

“And this is what gives me confidence in our ability to shape the next phase of growth for our company and our customers.”

“35 billion Copilot interactions have been audited by Purview to date, up 7x year-over-year.”

“We now have 35,000 paid Fabric customers, up 60% year-over-year.”

“And in Microsoft 365 consumer, we now have nearly 95 million subscribers and early signals show increasing satisfaction as we make Agent Mode the default.”

“To put this momentum in perspective, weekly engagement is now at the same level as Outlook, as more and more users make Copilot a habit.”

“The next [ way ] up from infrastructure is the agent app platform.”

“The majority of users leverage multiple models.”

“When it comes to biz apps, we are seeing a new pattern emerge as customers shift from traditional seat model to seats plus consumption.”

“The system of work behind Work IQ alone now spans more than 17 exabytes of data growing 35% year-over-year.”

“And we are very excited about the continued progress with Foundry Agent Service and how customers can now build durable stateful agents that run across time boundaries, orchestrate tools and models and close the loop with evals and improvement over long-running workflow.”

“We have seen a surge in usage of our first-party agents with monthly active usage up 6x year-to-date.”

“Copilot queries per user were up nearly 20% quarter-over-quarter.”

“I mean this is like a daily habit of intense usage.”

“We continue to increase the pace of future innovation across Microsoft 365 Copilot introducing over 625 updates over the past year, up 50%.”

“Tens of thousands of companies are already managing tens of millions of agents in Agent 365, and we expect this momentum to grow significantly as agents will increasingly need tools for identity governance, security and more.”

“Finally, when it comes to our consumer business, we are doing the foundational work required to win back fans and strengthen engagement across Windows, Xbox, Bing and Edge.”

“Monthly active Windows devices surpassed 1.6 billion, and over time, Windows value will extend to deliver [ unmeeted ] intelligence at the [ edge ].”

“And even there, if you have commitments, long-term commitments to consumption, you get discounting that is appropriate with it.”

“Second, we are building high-value agentic systems across core domains such as productivity, coding and security.”

“We offer the broadest selection of models of any hyperscaler, so customers can choose the right model for the right workload across OpenAI, Anthropic, open source and more.”

“Our Edge browser has taken share for 20 consecutive quarters and Bing monthly active users reached $1 billion for the first time.”

“Over 15,000 customers now use both Foundry and Fabric, up 60% year-over-year as enterprises connect agents to real-time operational analytical and unstructured data that Fabric brings together.”

“It was a record third quarter powered by the continued strength of Microsoft Cloud, which exceeded $54 billion in revenue, up 29% year-over-year.”

“And so overall, I think the construct as they have grown and we have grown and our customers also have different expectations in terms of their model diversity.”

“And we are on course to productize new multimodal AI-driven scanning harness as well.”

“We set new records for monthly Xbox active users in the quarter as well as game streaming hours.”

“All up, we added another gigawatt of capacity this quarter and remain on track to double our overall footprint in just 2 years.”

“So I feel like that's the direction of travel.”

“Now let me turn to the high-value agentic systems we ourselves are building on this platform.”

“And you also see this in Xbox where the team is recommitting to our core fans and players and shaping the future of play.”

“And you got to remember the model capabilities are exponential.”

“As of last week, Agent Mode is now default experience across Copilot in Word, Excel and PowerPoint.”

“And with Cowork, you now have a new way to delegate and complete work using Copilot.”

“These models are already powering first-party scenarios like image generation in Bing and PowerPoint, and we are working towards having Transcribe-1-powered transcription in Copilot and Teams.”

“Our North Star remains the same, delivering customer value with highest quality and top-class innovation.”

“And we are seeing fast growth of our co-pilot credit consumptive offer, up nearly 2x quarter-over-quarter as customers increasingly extend copilot with custom agents tailered to their workflows.”

“In the near term, we are focused on fundamentals, prioritizing quality and serving our core users better.”

“Nearly 90% of the Fortune 500 now have active agents built with our low-code, no-code tools.”

“Our Cobalt server CPU is deployed in nearly half of our DC regions running workloads at scale for customers like Databricks, Siemens and Snowflake.”

“Cosmos DB alone saw 50% year-over-year revenue growth driven by AI app workloads.”

“Last week's Game Pass changes are one example of how we are staying responsive to customer feedback.”

“Beyond Fabric and Foundry, we are also helping knowledge workers build agents with tools like Copilot Studio.”

“When it comes to developers, GitHub itself is seeing unprecedented growth driven by proliferation of agentic coding and we are hard at work to scale and meet this demand.”

“Copilot is uniquely valuable at work where nearly every task depends on organizational context, work IQ grounds, copilot responses in the full context of an organization, including people, roles, documents and communications, all within the company's security boundary.”

“We're optimizing every layer of the tech stack from DC design to silicon to system software, the model architecture as well as its optimization.”

“We introduced MAI-Transcribe-1, a state-of-the-art speech-to-texdt model and MAI-Image-2, one of the top image generation models in the world.”

“The liquidity and freshness of that data matters with billions of e-mails, documents, chats, hundreds of millions of Teams meetings and millions of SharePoint sites added each day.”

“To help mitigate risk immediately, we simship Defender protections when updates for AI discovered vulnerabilities are released.”

“At the end of the day, it is going to come from some eval and outcome that a business has, where these agents that are working on behalf of users or with users is creating value.”

“Today, I'll focus my remarks on both priorities, starting with infrastructure.”

“In knowledge work, it was another record quarter for Microsoft 365 Copilot seat ads which increased 250% year-over-year, representing our fastest growth since launch.”

“And our agentic products in LinkedIn Talent Solutions, which help hirers automate time-consuming tasks like sourcing, screening and drafting messages have already surpassed a $450 million annualized revenue run rate.”

“We have reduced, [ docked the ] life times for new GPUs in our biggest regions by nearly 20% since the beginning of the year.”

“Over 10,000 customers have used more than one model on Foundry, 5,000 used open source models, and the number who have used Anthropic and OpenAI models increased 2x quarter-over-quarter.”

“And earlier this week, we announced our move to usage-based pricing model for GitHub Copilot as we align pricing to actual usage and cost.”

“Our Fairwater data center in Wisconsin came online earlier this month, 6 weeks ahead of schedule, allowing us to recognize revenue earlier.”

“We're also hard at work changing the way we work.”

“All this innovation is driving record usage intensity across Copilot.”

“So in other words, you continue the conversation.”

“Finally, with Agent 365, we offer a control plane that extends company's existing governance, identity, security and management frameworks to agents.”

“Already the number of Security Copilot customers increased 2x year-over-year, our data security triage agents alone handled over 2 million unique alerts this quarter, and we are helping customers secure their AI deployments as well.”

“We are evolving our family of copilots from synchronous assistance to async coworkers that can execute long-running tasks across key domains.”

“We're also seeing rapid adoption of GitHub Pilot CLI with usage nearly doubling month-over-month.”

“Nearly 140,000 organizations now use Github Copilot and enterprise subscribers have nearly tripled year-over-year.”

“It's obviously already happening with coding.”

“And so when they start seeing that the trash trajectory is compressing the workflow, improving revenue, decreasing costs, that is what's driving usage.”

“All up, over 300 customers are on track to process over 1 trillion tokens on Foundry this year, accelerating 30% quarter-over-quarter.”

“It starts with model choice.”

“Across our fleet, millions of servers are powered by our custom networking security and virtualization silicon, including Azure Boost as well as our first-party CPUs and accelerators.”

“And we delivered a 40% improvement in inference throughput for our most used models across Copilot driven by our software and hardware optimization work.”

“We are moving aggressively to add capacity aligned to our demand signals we see and we have announced new data center investments across 4 continents.”

“Quarter-over-quarter, we continue to see acceleration and now have over 20 million Microsoft 365 Copilot paid seats.”

“But I think you said it, which is, customers want predictability, especially for budgets and procurement.”

“As our largest customers scale their AI deployments, they're increasingly leveraging other services across our platform and choosing to run those workloads on Cobalt, and we are expanding Cobalt supply significantly to meet this demand.”

“With Windows, we recently announced performance improvements for lower memory devices, streamline the Windows Update experience and brought back focus to core features and fundamentals that matter most to our customers.”

“For example, Bayer is using multiple models in Foundry to create its own in-house agent platform with more than 20,000 active monthly users.”

“And Bayer, Johnson & Johnson, Mercedes and Roche all committed to 90,000 or more seats.”

“You can use multiple models together to generate optimal responses.”