Microsoft Overhauls Copilot With OpenClaw to Chase 97% of Office Users

Microsoft is reportedly planning a significant overhaul of its 365 Copilot by integrating OpenClaw's autonomous agent technology, a direct response to anemic user adoption and rising competition from rivals like Anthropic.

(Bloomberg) -- Microsoft Corp. is reorganizing its Copilot division to incorporate technology from open-source AI agent OpenClaw, a strategic pivot aimed at transforming the product from a passive assistant into an autonomous, always-on agent. The move comes as the software giant struggles with a 24% stock decline this year and a mere 3% adoption rate for its $30-a-month Copilot Pro subscription among its massive Office 365 user base.

"This is a shift from reactive, prompt-driven AI to a proactive assistant that anticipates user needs across applications," a person familiar with the project said. The goal is to create agents that can run 24/7, independently managing complex workflows without constant user instruction, a significant departure from the current Copilot experience.

The initiative is reportedly a top priority for Chief Executive Officer Satya Nadella, who has placed senior vice president Charles Lamanna in charge of the new direction, with some engineering teams already reassigned to focus on OpenClaw features. Early concepts include a Copilot that continuously monitors a user’s Outlook and Calendar to proactively generate daily to-do lists or organizes data in Excel spreadsheets in the background.

At stake is Microsoft’s dominance in the enterprise software market. The lackluster adoption of its flagship AI product has created an opening for competitors. Anthropic PBC, backed by Microsoft’s own cloud rival Amazon.com Inc., recently announced that its AI, Claude, can now integrate directly with Microsoft 365 applications, targeting the same core user base.

Competition Mounts as Anthropic Enters the Suite

The competitive threat is no longer theoretical. Anthropic has already begun to encroach on Copilot's home turf, with users starting to compare the offerings directly. German manufacturer Ameco Group, for instance, expanded its subscription to Claude after finding it superior for Excel automation tasks, despite having already purchased multiple Copilot seats.

"If Microsoft can do the same thing, I might switch back," said Ameco marketing executive Alexandre Giess, highlighting the fluid nature of customer loyalty in the rapidly evolving AI market. This sentiment underscores the pressure on Microsoft to deliver a more capable product. The company's response appears to be twofold: integrating more powerful autonomous features via OpenClaw while also launching its own "Cowork" agent, which is itself powered by Anthropic's models.

From 'AI Everywhere' to AI That Works

The strategic shift also follows significant user backlash against Microsoft's aggressive "AI everywhere" strategy. The company recently began removing the Copilot icon from core Windows 11 applications like Notepad and Snipping Tool after criticism from the enthusiast community, as reported by Windows Latest and TechPowerUp. The initial push for AI integration often led to a clunky user experience.

"It was completely useless because it took twice as long to do anything," said Nimesh Mehta, chief information officer at National Life Group, recalling his company's early tests of Copilot. He noted that a request to summarize a two-page document yielded a four-page summary. While acknowledging the product has likely improved, Mehta's experience reflects the challenge Microsoft faces in winning back users who were disappointed by the initial offering.

For investors, the OpenClaw pivot represents a critical test of Nadella's AI strategy. Successfully developing secure, effective autonomous agents could unlock a vast new revenue stream from the 97% of Office users who have so far resisted the AI upgrade. Failure, however, could see Microsoft lose its grip on the next generation of enterprise productivity, ceding the market to more agile and focused AI-native competitors. The first preview of these new capabilities could come as early as the Microsoft Build developer conference in June, though sources caution the timeline remains uncertain.

This article is for informational purposes only and does not constitute investment advice.