Microsoft Sales Chief Responds to Potential Rivalry with OpenAI’s New Agent Product
The Takeaway
- Microsoft sales chief positions company against OpenAI’s new Frontier AI agent product.
- Microsoft emphasizes platform strength, diverse AI models, and enterprise security.
- OpenAI and Anthropic AI agents may threaten traditional enterprise software market.
Microsoft’s top sales executive told staff on Friday that the company was uniquely positioned to compete against a new OpenAI product aimed at helping businesses automate office tasks across different software applications—including Microsoft’s own apps.
In an email, Microsoft Chief Commercial Officer Judson Althoff provided talking points salespeople could use in selling Microsoft’s tools for managing so-called AI agents, including highlighting their potential advantages over OpenAI’s new product, known as Frontier, according to two Microsoft employees who received the email.
Althoff’s effort to rally his troops shows how quickly new AI announcements are impacting the enterprise software industry. Over the past few weeks, public market investors have sold off software stocks on fears that AI—including agents made by Anthropic and OpenAI—will make traditional enterprise software apps less valuable and impact their growth.
It’s not the first time Microsoft has found itself in competition with OpenAI after investing $13 billion in the startup in exchange for the right to use OpenAI’s technology in its own products. As both companies sold similar AI products to businesses, Microsoft has repeatedly told salespeople to tell customers that Microsoft could provide more security and compliance guarantees than the younger startup.
Newfangled AI agents developed by firms such as OpenAI and Anthropic are still rife with security vulnerabilities, limited in their capabilities and make mistakes, but AI leaders including Nvidia CEO Jensen Huang increasingly describe a future in which AI agents themselves will use traditional enterprise apps to perform tasks currently handled by people. That could put the enterprise app business in a precarious position.
Microsoft, the No. 1 seller of enterprise apps, is trying to get ahead of AI upstarts like OpenAI by releasing its own products for workers to create and direct AI agents. Microsoft’s Agent 365 aims to help companies keep track of different AI agents—including those offered by OpenAI—and connect those agents to other applications so they can reorganize files or create forecasts based on data stored in those applications.
Microsoft is also developing Windows-based AI agents that could perform tasks and use applications on a customer’s computer the way a human would, The Information reported last week.
Microsoft is far from alone. Other enterprise software firms like ServiceNow, Salesforce, and Amazon have recently debuted products meant to help customers keep track of and direct agents from a range of different AI providers.
The traditional enterprise firms are keeping a watchful eye on both OpenAI and Anthropic, from which many of them buy AI models to power features in their enterprise apps.
Using a technique known as reinforcement learning, OpenAI and Anthropic have been training AI to be able to use enterprise apps as a “digital coworker” alongside humans for the better part of a year. Now, they are trying to get such AI in the hands of businesses.
OpenAI said a customer could use Frontier, which it announced on Wednesday, to create multiple “AI coworkers” and assign them different tasks that involve pulling in data from various applications: one AI agent could research potential sales leads while another could take that agent’s findings and check it against existing customer accounts stored in a company’s sales database and send sales pitches to customers that aren’t already in the system.
Ominous Chart?
OpenAI didn’t specify which well-known enterprise apps its AI would use to perform these tasks. But it included a graphic in its blog post about Frontier, showing how OpenAI’s technology for directing these agents would sit on top of companies’ “systems of record.” That term describes applications made by firms such as Microsoft and Salesforce that store corporate data customers trust to be accurate.
Some executives at traditional enterprise application firms said they viewed the graphic as OpenAI’s way of showing the heavy influence it wants to have over the way businesses use and pay for software and AI. (An OpenAI spokesperson did not immediately respond to a request for comment.)
To be sure, OpenAI isn’t arguing that the AI itself will work out of the box. It’s hiring AI specialists to work deeply with customers to reorganize their IT systems and make their existing software work better with AI. Anthropic also has such employees, which work with companies such as Cox Automotive to develop AI agents to power new products.
In the Friday email, Althoff said OpenAI is a worthy competitor that deserves respect, but he also urged sales teams to stay the course and keep in mind the advantages Microsoft has as it competes with the startup, said a current employee.
One of these advantages, Althoff said, is that Microsoft is a “platform” company that offers many different AI models and has longstanding relationships with enterprise customers. OpenAI, in contrast, is an AI developer that has yet to show it can be a platform company, especially since it has no infrastructure of its own in place, Althoff said in the email. (OpenAI relies on cloud providers such as Microsoft to run its technology and business.)
‘Application Scaffolding’
Althoff emphasized that Microsoft’s Azure cloud server business—which also powers OpenAI’s technology—already offers access to a wide range of models, making Microsoft a more logical destination for directing multiple AI agents, the people said. Microsoft offers OpenAI’s models as well as those of other providers like Anthropic, Mistral, and xAI.
Althoff also said Microsoft has experience working with large enterprises with complex security and compliance needs, which made it better positioned to win business, the people said.
OpenAI’s Frontier release came several weeks after its archrival Anthropic released Cowork, a product that also aims to automate workplace tasks by taking over a user’s computer to perform work on their desktop like a human would.
Microsoft leaders almost immediately discussed how Cowork stacked up against Microsoft’s AI products like 365 Copilot—which uses models from Anthropic and OpenAI to automate tasks in its flagship Office 365 and Outlook software—and how Microsoft could potentially compete with the Anthropic product.
Microsoft CEO Satya Nadella has previously said that the company’s strategy is to develop “application scaffolding”—software that helps customers use AI models to automate tasks across various applications and data they use. He argued that AI models themselves could become “commoditized,” meaning value would flow to firms like Microsoft that give customers useful tools to connect the models to applications and data.