Microsoft is one of the central commercial players in the modern AI era, primarily through its partnership with OpenAI and its Copilot product line. An early and cautionary chapter came in 2016 with Tay, a public chatbot that was quickly manipulated by users into producing offensive output and pulled offline within a day - a widely cited lesson in how open, learning systems can be gamed.
Microsoft’s defining AI move was its investment in OpenAI. In its January 23, 2023 announcement “Microsoft and OpenAI extend partnership,” the company described a “multiyear, multibillion dollar investment to accelerate AI breakthroughs,” framing it as the third phase of the relationship following “previous investments in 2019 and 2021.” The agreement extended their work on AI supercomputing and research and let each company independently commercialize the resulting technology.
Microsoft turned that partnership into products under the Copilot brand. Its March 16, 2023 post “Introducing Microsoft 365 Copilot” described combining “the power of large language models (LLMs) with your data in the Microsoft Graph and the Microsoft 365 apps,” with answers “anchored in your business content,” and noted that “Copilot LLMs are not trained on your tenant data or your prompts.” The partnership has continued to evolve: Microsoft’s April 27, 2026 post “The next phase of the Microsoft-OpenAI partnership” described an amended agreement to simplify how the two companies work together.
Why business readers should care: Microsoft is the main route by which OpenAI’s models reach enterprise software, embedding generative AI into the Office tools, Azure cloud, and developer platforms that most large organizations already run on.