Microsoft 365’s “Biggest” Update in 8 Years Will Transform Microsoft Teams Into a Hub for AI Agents

CEO Santya Nadella: “This is the biggest update ... since Teams launched”

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Microsoft Hub for AI Agents
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Published: May 20, 2025

Rhys Fisher

Microsoft CEO Satya Nadella has claimed that the latest enhancements to Microsoft 365 Copilot signify the biggest update for the productivity platform “since Teams launched”.

Now generally available, the 365 Copilot brings together each of the following tools into one “scaffolding that’s intuitive”:

  • Chat allows users to search for answers within work and web data.
  • Search ensures access to data beyond Microsoft 365, now including Confluence, Google Drive, JIRA, ServiceNow, and others.
  • Notebooks allow businesses to combine chats, pages, documents, and emails in a single collection. From that, they can create guides, audio reviews, and even podcasts.
  • Create enables brands to turn documents, like PowerPoint presentations, into images, graphics, and even explainer videos.
  • Agents anticipate, reason, and act to autonomously perform tasks across the 365 environment.

Sharing some examples of these AI agents, Nadella describes Microsoft’s “Researcher” as “perhaps the biggest game changer.”

The CEO explained how the Researcher agent is able to synthesize data from web and enterprise sources and analyze it with sophisticated chain of thought reasoning.

Another example outlined in the address was the Analyst agent, which can transform raw data from sources like Excel files into insights, forecasts, and visualizations.

In discussing the capabilities of these AI agents, Nadella referenced Microsoft’s legendary Co-Founder and former CEO Bill Gates:

“These agents are all at the end about putting expertise at your fingertips. Right?

A long time ago Bill [Gates] talked about information at your fingertips. I feel we’re at that age where we are now going to put expertise at your fingertips.

In putting this expertise at employees’ fingertips, the Microsoft 365 Copilot transforms Teams.

Microsoft Teams as a Hub for AI Agents

Microsoft Teams makes the new 365 Copilot experience “multiplayer,” according to Nadella.

Indeed, all the AI agents Microsoft customers invoke can appear in Teams.

Moreover, Teams users can ask questions, assign action items, or trigger workflows by @mentioning an agent in a Teams chat or meeting.

Excitingly, these agents can work together to automate complex, multi-step processes that start in Teams and expand into the enterprise.

That’s where the Microsoft Teams AI Library comes in.

Per Nadella, the AI Library makes the process of building multiplayer agents simpler.

Indeed, it now supports MCP – a standardized framework that allows third-party AI agents to communicate – and with “just one line of code”, users can enable agent-to-agent (A2A) interaction.

Moreover, developers can now publish their agents to the Agent Store, making them discoverable and usable to “hundreds of millions of users” across Copilot and Teams.

In expounding on this, Nadella discussed some examples of partners that have already built their own agents that connect to Copilot and Teams, including Workday, LSEG, and ServiceNow.

What’s the Significance for Customer Experience Teams?

It can sometimes be easy to overlook Microsoft Teams’ CX significance. Still, it’s the first platform that many sales, service, and marketing reps open up each day.

With Teams now acting as a hub for AI agents, these customer experience pros may soon be able to, via Microsoft Copilot in Teams, trigger actions across different CX systems without needing to log into them.

Moving forward, this could allow sales teams to update their pipelines, customer service teams to fetch and share customer insights, marketing teams to adjust campaigns, and so forth – all from within Microsoft Teams.

In addition, an AI agent may learn something across the external systems and alert users in Teams that they need to look into something.

The bottom line: Microsoft’s latest announcement has organization-wide implications, and that extends into the CX space.

What Else Did Microsoft Announce at Microsoft Build 2025?

Away from the revamped Teams news, Nadella also made a number of other CX-related announcements:

Copilot Tuning for Brand-Specific Experiences

Copilot Tuning will allow businesses to ground Microsoft’s AI agents in their tone, terminology, and knowledge.

In doing so, the capability aims to enable consistent, brand-aligned interactions that feel personalized, familiar, and compliant with internal CX policies and service standards.

Foundry for AI-Powered Agents and Local CX Tools

Azure AI Foundry now supports multi-agent orchestration, giving CX leaders the tools to build intelligent workflows, such as automated triage, escalation, or post-interaction surveys, powered by real-time customer data.

Foundry Local and Windows AI Foundry allow these agents to run on-device or at the edge, making it possible to deploy AI-enhanced CX tools even in offline or low-connectivity environments like retail branches or call centers.

AI-Powered SRE and GitHub Copilot Agent

Microsoft’s Azure SRE Agent can proactively identify and resolve system issues, reducing service downtime and ensuring a smoother customer experience.

On the other hand, the GitHub Copilot Agent boosts development speed and quality, helping CX teams iterate faster on customer-facing apps and automation tools with less engineering overhead.

Data Governance, Security, and Trust

All agent and workflow capabilities are deeply integrated with Microsoft Purview, Defender, and Fabric, ensuring that customer data used across Copilot and Foundry environments remains secure, compliant, and governed.

 

 

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