Guest post by Judson Althoff CEO of Microsoft's commercial business globally.

Frontier Transformation is a holistic reimagining of business, aligning AI with human ambition to achieve an organisation's highest aspirations. It is the next evolution of AI Transformation — not only do we need to deliver efficiency and productivity, but we need to democratise intelligence and do more for humanity. Companies do not want or need more AI experimentation. They need AI that delivers real business outcomes and growth.

In my daily conversations with customers and partners, they typically question what the most important components of an AI solution are. Is it the model? Is it silicon? At Microsoft, we believe the two most essential elements of Frontier Transformation are Intelligence + Trust. Organisations need to harness their own unique work intelligence as they build agents and solutions; and all AI artefacts across their technology stack must be observed, managed and secured to ensure they are delivering value responsibly.

Intelligence that shows up in real work

I often say that zero-shot artefact creation is nothing more than a parlour trick. Models can reason over data, produce draft documents, presentations and spreadsheets, but they do not understand work. Real differentiation comes from intelligence — deep work context, embedded in the tools people already use. AI should amplify your intelligence but do so in a manner that protects your differentiation and unique value.

Work IQ amplifies an individual's IQ by tapping into your organisation's IQ. It is the intelligence layer that enables Microsoft 365 Copilot and agents to know how you work, with whom you work, and the content upon which you collaborate. That is why Copilot is faster, more accurate and more trusted than solutions built on models and connectors alone.

This month, we are unleashing Work IQ with our next generation of agentic experiences in Wave 3 of Microsoft 365 Copilot in Word, Excel, PowerPoint and Outlook. Employees will have an enhanced chat experience in Copilot with the ability to create and augment artefacts, and the power to build their own agents within the canvas they work in every day.

Microsoft 365 Copilot is model diverse by design. Rather than betting on a single model, we built a system that makes every model useful at work. Customers get the choice, performance and flexibility in an open, heterogeneous environment. Copilot leverages leading models from OpenAI and Anthropic, operating openly across clouds and data services without locking customers in. Claude is now available in mainline chat in Copilot via the Frontier programme, alongside the latest generation of OpenAI models.

M365 Copilot Wave 3 is not just a singular release of new capabilities but rather a commitment to continuous innovation. We will bring frontier capabilities with enterprise promises for our customers in an open and model diverse manner. Another great example of this is Copilot Cowork, which is in research preview. Built in close collaboration with Anthropic, we are bringing the technology that powers Claude Cowork into Microsoft 365 Copilot to enable long-running, multi-step work that unfolds over time. Click here to learn about our Wave 3 news in more detail.

These announcements come as our customers across industries are already seeing the value of Microsoft 365 Copilot. Microsoft recently delivered its strongest quarter yet with Copilot, with paid seats growing more than 160% year over year and daily active usage up ten times, as customers increasingly make Copilot a core part of everyday work.

Expansion is also accelerating as the number of customers deploying Copilot at significant scale — more than 35,000 seats — tripled year over year. Just last week, Mercedes Benz announced a global rollout of Microsoft 365 Copilot, following recent investments from NASA, Fiserv, ING, the University of Kentucky, the University of Manchester, the U.S. Department of the Interior an...