Microsoft Enterprise AI Momentum Gains, But Costs Remain High

Microsoft's (MSFT) enterprise AI push has been gaining momentum, particularly in September 2026 when it launched a revamped Copilot built around Home, Code, and Autopilot. Home integrates chat and delegated work, while Code enables non-developers to build secure apps and automations using natural language. Autopilot is a persistent agent that keeps tasks moving even when users are offline.

These new features have been met with solid adoption, with Microsoft 365 Copilot paid seats reaching 30 million in the fourth-quarter fiscal 2026, representing more than double the sequential net seat additions. Agent 365 registered nearly 40 million agents within two months of its launch, and Foundry revenues more than doubled year over year.

However, scaling enterprise AI remains costly, with Microsoft expecting a 23-24% rise in cost of revenues for the fiscal first quarter, keeping operating margins roughly flat year over year. The company is shifting toward credit-based pricing, which could make Copilot revenues less predictable in the near term.