Microsoft And DeepSeek Are Launching New AI Together

Microsoft announced the general availability of Copilot Co-work and its evolution into a full enterprise AI agent platform, moving to usage-based billing at 1 cent per Copilot credit due to the explosive costs of agentic workloads. To help customers forecast spending, Microsoft defined task types and user personas. The company is also experimenting with fine-tuned open-source models like DeepSeek as a lower-cost, customer-selectable option hosted on Azure with enterprise security—but not as a default replacement. Meanwhile, Microsoft is positioning itself as a multi-model platform routing tasks across OpenAI, Anthropic, and others based on cost and quality, and introduced Web IQ, a Bing-powered grounding system tailored for agents. Despite market skepticism and limited early access, Copilot Co-work is positioned as the central hub unifying Microsoft's agent strategy with cost controls, admin governance, and future enterprise features.

• ▶ 0:57 Copilot Co-work is now generally available worldwide after a 3-month preview, with more than half of the Fortune 500 already using it for long-running, agentic tasks like comparing thousands of files or analyzing sales pipelines.
• ▶ 2:22 Microsoft is moving Copilot Co-work to usage-based billing because agentic AI costs explode—some users ran hundreds of tasks per week—so pricing is now 1 cent per Copilot credit, based on model use, context retrieval, tool calls, and runtime.
• ▶ 3:45 To help estimate costs, Microsoft defined three task types (light, medium, heavy) and four user personas, so companies can forecast spending based on how many people use Co-work, how often, and which tasks they run.
• ▶ 4:28 Microsoft is exploring a fine-tuned DeepSeek V4 (or another open-source model) as a lower-cost option for Copilot Co-work, but only as a cost experiment, not a full replacement.
• ▶ 5:24 If adopted, DeepSeek would not be the default; it would be a customer-selectable option, fully hosted on Azure with enterprise security, compliance, and data residency controls.
• ▶ 6:26 The real shift is Copilot becoming a multi-model enterprise platform that routes tasks across Anthropic, OpenAI, Microsoft's Cowork 1, and potentially DeepSeek based on cost, quality, security, and use case.
• ▶ 6:46 Microsoft has built a sizable business selling AI models to Chinese companies, with ByteDance on track to spend over $1 billion per year on Microsoft AI and cloud services.
• ▶ 9:28 Microsoft does not host OpenAI models in Chinese data centers due to IP theft concerns; Chinese customers access them over the internet from facilities like Singapore.
• ▶ 9:43 OpenAI has privately complained that Microsoft isn't doing enough to prevent Chinese firms from using OpenAI models for distillation, and Chinese customers face no heightened monitoring.
• ▶ 11:12 Microsoft introduced Web IQ, a Bing-powered grounding system built specifically for AI agents, delivering fresh web information agents need to reason, verify, and complete tasks.
• ▶ 11:35 Unlike human-oriented search engines, agents run multiple queries, retrieve passages, compare sources, and need fresh data, low latency, and concise machine-readable output that doesn't waste tokens.
• ▶ 12:30 Web IQ faces skepticism: the market is crowded with competitors, search latency may not be the main bottleneck in agent workflows, and early access is limited to select Azure users—but it signals Microsoft's ambition to own the full agent stack.
• ▶ 13:15 Copilot Co-work is positioned as the central hub unifying Microsoft's entire agent strategy, running in the cloud, connecting to company data via Work IQ, and adhering to Microsoft 365 security rules.
• ▶ 13:32 The platform emphasizes cost efficiency with usage-based pricing and admin controls, allowing organizations to set budgets, track spending, and limit who uses it.
• ▶ 13:55 This signals a strategic shift from a Copilot feature to a full enterprise AI agent platform, with future capabilities like plugins, compliance tools, and data loss prevention on the roadmap.

• ▶ 0:02 Copilot Co-work Goes GA with Usage-Based Pricing (0:02 - 4:28) - Covers Copilot Co-work's global launch, customer examples, agentic AI costs, and usage-based pricing details.
• ▶ 4:28 Microsoft Explores DeepSeek for Copilot Co-work (4:28 - 6:42) - DeepSeek enters the story as Microsoft reportedly tests a fine-tuned DeepSeek V4 or open-source model for Copilot Co-work.
• ▶ 6:42 Microsoft's China AI Business, Distillation, and Geopolitics (6:42 - 11:12) - Explores Azure AI growth in China, the AI ecosystem, distillation concerns, and Chinese in-house model competition.
• ▶ 11:12 Web IQ: Bing-Powered Grounding for Agents (11:12 - 13:15) - Introduces Web IQ, Microsoft's Bing-powered grounding service for AI agents.
• ▶ 13:15 Copilot Co-work Agent Platform and Sign-Off (13:15 - 14:08) - Shows Copilot Co-work tying the agent strategy together, adds enterprise controls, and ends with a call to action.