Microsoft thinks it found a way to make PCs relevant again

By Samantha Murphy Kelly, CNN

CNN  — 

Microsoft jumped headfirst into building artificial intelligence directly into its Windows operating system on Monday, announcing new AI computers that could help ramp up flagging PC sales.

The developments push the company closer to its long-time goal to “build computers that understand us versus us having to understand computers,” CEO Satya Nadella told the audience at the company’s annual developer conference at its Redmond, Washington headquarters.

“I feel like we’re really close to that real breakthrough,” he added.

The computers, which are packed with processors that power advanced AI tools, come as PC sales have stalled for years. The company hopes the new machines will boost sales and revive excitement, particularly as AI is expected to become increasingly part of everyday life.

Microsoft’s new lineup of Copilot+ PCs, which feature a new Surface Pro tablet and Surface laptop, include AI tools that don’t require internet connection – the AI processing occurs directly on the device

The new hardware runs on OpenAI’s new GPT-4o technology, which aims to turn ChatGPT into a digital personal assistant that can engage in real-time, spoken conversations and interact using text and “vision.” Announced last week, it can view screenshots, photos, documents or charts uploaded by users and have a conversation about them.

The new hardware also plays up Microsoft’s existing AI assistant called Copilot, which works across various products, including Bing and Microsoft 365. It can help with tasks such as writing, keeping track of emails in Outlook or designing presentations in PowerPoint.

One new feature, called Recall, acts as a personal “time machine,” allowing users to quickly find things from their computer, such as documents, images and websites. Another allows for real-time translation into more than 40 more languages locally on the device.

The company also showed off a new tool called Team Copilot, which serves as a personal assistant, allowing it act as a meeting facilitator to create agendas or take notes on behalf of the whole team, not just an individual user.

Microsoft isn’t alone in its AI PC ambition. Dell and Lenovo also recently debuted AI-first PC computers under the Copilot+ AI umbrella, an emerging category that experts widely believe will become the next stage of computing. (Copilot+ is the name of the line of hardware that supports the Copilot software.)

Next month, Apple is expected to announce new AI-powered tools for the iPhone and Mac at its annual Worldwide Developers Conference.

“Over time, AI capability will become a ubiquitous feature, but Microsoft and its partners have made a solid start,” Geoff Blaber, CEO at CCS Insight, told CNN. “They will need to work hard to ensure that AI becomes a lot more than just a meaningless descriptor with a growing number of features.”

Microsoft’s advancements also come at a time when the PC market is ripe for innovation.

“This is a much-needed catalyst,” Blaber added.

Although the Surface line is relatively small within the overall PC market, it serves as an aspirational brand and a frontrunner in terms of innovation, according to Jitesh Ubrani, a research manager at market research firm IDC. But Microsoft’s move is more reflective of a greater shift happening in the industry toward AI.

In June, Apple will likely introduce generative AI – artificial intelligence that is capable of creating new output from images to text – across its iOS and Mac platforms. Reports indicate the company could unveil an AI-powered chatbot that runs on OpenAI’s ChatGPT technology, the same technology that underpins Microsoft’s new CoPilot+ line.

Still, Microsoft has already established itself as an early leader in this space with ChatGPT integrated into key products. And it appears those efforts are paying off.

Last month, Microsoft reported quarterly profits of $21.9 billion, up from $18.3 billion a year ago. Revenue grew 17 percent year-over-year growth to $61.9 billion. Microsoft’s Azure cloud business also experienced strong growth – revenue grew 31 percent – boosted by AI tailwinds.

The company continues to go all in on AI in other ways, too. Earlier this month, Microsoft said it is pouring $3.3 billion into building a data hub in Wisconsin to train employees and manufacturers on how to best use artificial intelligence. The new center aims to create 2,300 union construction jobs and 2,000 permanent jobs over time, according to Microsoft. It also plans to use the center to train about 100,000 workers across the state.

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