Microsoft's Jacob Andreou unveils Copilot agentic browser, first-party AI models, and Clippy's return as 'Miko'

Summary

Microsoft is moving to reduce its dependence on OpenAI models inside Copilot, with the company's first fully in-house foundation models now live in production. Jacob Andreou, who leads product and growth for Microsoft AI with a focus on Copilot, confirmed that roughly six weeks ago Microsoft began running its own end-to-end pretrained models through LM Arena benchmarks, placing in the top five to top ten across language, text, and image categories. Prior to that, Microsoft had no capability to build foundation models from scratch. GPT-4o was the primary model powering Copilot responses for an extended period before GPT-5 took over as the default; certain product modes are now served by Microsoft's own first-party models.

The strategic logic is a product loop, not a model race. Andreou frames the shift around what he calls a model-product-user feedback cycle, where usage patterns flow back into post-training to better match actual user behavior. The argument implicitly concedes that raw intelligence benchmarks are losing their differentiation value, pointing to GPT-4.5's reception as evidence that users pushed back on tone and personality even as capability improved.

Copilot's Agentic Browser

Microsoft's most significant near-term launch is a Copilot mode inside Edge that transforms the browser into an agentic layer. Edge already has hundreds of millions of users, giving the rollout immediate scale that standalone agentic browser startups cannot match. The feature goes beyond sidebar chat: it monitors browsing patterns across tabs, infers ongoing tasks such as trip planning or candidate research, and proactively advances those tasks between sessions. On re-entry, users can resume from where the agent left off with a single tap.

On prompt injection risks, Andreou characterizes the current release posture as essentially a security preview, with the system checking in at multiple action steps and Microsoft prepared to iterate rapidly as vulnerabilities surface.

Social Layer and Miko

Copilot is also the first AI application to introduce group chats, allowing users to add other people to an active AI conversation via a share link. Invitees do not need to install the app and can participate directly through mobile Safari. Andreou, who previously worked on My AI at Snapchat for nine years before joining Microsoft, flagged the absence of any social layer across competing AI products as a gap he intends to close.

The session also included the first on-air reveal of Miko, a new animated character embedded in Copilot. Miko is a direct spiritual successor to Clippy, Microsoft's retired Office assistant, with Satya Nadella personally requesting the Clippy lineage be acknowledged. The character was built by a dedicated team and is positioned explicitly as a safe, non-romantic AI persona, a deliberate contrast to companion AI products elsewhere in the market.

Enterprise vs. Consumer Sequencing

Andreou outlined a six-to-nine month execution split: enterprise focus stays inside Microsoft 365 and existing work applications, while the consumer push centers on the standalone Copilot app available on iOS and Android. Long term, Microsoft views the highest-context system, one that integrates calendar, files, and personal data across both surfaces, as the structural winner. The consumer Copilot app currently does not require a Microsoft 365 subscription to deliver value, a deliberate on-ramp strategy.

On the startup competitive question, Andreou drew a line between defensible vertical specialization, citing Bloomberg's Excel plug-in as a durable example, and horizontal features that sit squarely on Microsoft's roadmap. He was direct that agentic capabilities inside Excel are actively advancing, flagging that category as high-risk territory for startups positioning against it.