Microsoft’s new AI service could spell trouble for the company’s biggest rivals.

Microsoft (MSFT 2.20%) unveiled a series of new artificial intelligence (AI) projects and features at its Build 2023 conference on Tuesday. Of all the services, capabilities, and initiatives detailed, the freshly announced Windows Copilot will likely go on to be the most important.

Copilot is an AI-powered virtual assistant that will be integrated across Microsoft’s Windows 11 operating system — making it easy for users to get answers to questions, rewrite text, and perform functions across different applications.

Microsoft co-founder and former CEO Bill Gates believes that personal-assistant technology will play a key role in deciding who ultimately emerges as AI’s biggest winner — and it could mean trouble for Alphabet (GOOG 0.47%) (GOOGL 0.44%) and Amazon (AMZN -0.38%). Even more striking, this potentially disruptive new feature will be available very soon.

This technology could upend Google and Amazon

Microsoft will make a preview version of Copilot available for all Windows 11 devices in June. The fast-approaching rollout looks particularly important considering recent comments made by Gates.

Just a day before announcing Copilot, the tech visionary said that victory in the AI race will go to whichever company delivers the best AI-powered personal assistant. He also fired shots at some of his company’s biggest rivals in the tech space. According to Gates: “Whoever wins the personal agent, that’s a big thing. You’ll never go to a search site again. You’ll never go to Amazon.”

While Gates didn’t specifically name Alphabet and its Google search engine, he clearly sees AI-powered personal assistants radically disrupting the space and potentially rendering the current market-leading service irrelevant. And per the quote, the legendary tech pioneer explicitly sees personal assistants upending Amazon’s current e-commerce business model.

It’s possible that Gates is overstating the disruptive impact that AI-powered assistant technologies will have on key businesses for Microsoft’s rivals. Gates still does some advisory work at the company, and he’s played a role in shaping its artificial intelligence strategy. Through his personal holdings and shares held in The Bill and Melinda Gates Foundation, he also has a personal interest in Microsoft stock performing well.

But while there’s no doubt about which company Gates is rooting for in the AI race, it wouldn’t be a stretch to say that Microsoft currently looks like the front-runner. Between its leadership in computer operating systems, productivity software, video games, cloud services, and other categories, Microsoft has access to an incredible range of valuable data that can be fed into AI systems. The company’s $10 billion investment in and partnership with OpenAI, the company behind ChatGPT, also gives it a close relationship with today’s biggest name in generative artificial intelligence tech.

Because access to valuable data is so important for AI systems, it’s possible that an early lead in personal assistants could turn into an insurmountable competitive advantage. Microsoft seems to be hoping that’s the case.

Does Microsoft already have an insurmountable lead in AI?

Personal AI assistants could eventually become the hub through which users perform much of their work and daily life activities. With the potential to be a unifying service platform, a highly advanced virtual assistant could replace the need for separate search engines, e-commerce services, and other stand-alones.

Given that Microsoft is the far-and-away leader in PC operating systems and has many other strengths, it potentially has huge advantages in this AI category. Next month, the company will roll out Copilot to hundreds of millions of Windows 11 users — and the service’s addressable market will continue to expand as more people migrate from earlier versions of the OS.

But while Microsoft has been the most aggressive in detailing and promoting its AI initiatives to the public, the competition is likely still just heating up. Alphabet and Amazon both have their own AI projects under way, and other big tech players, including Apple, also have powerful strengths.

Alphabet and Apple dominate in mobile OS, and both will have opportunities to score wins with their own personal assistants on smartphones, tablets, and other hardware platforms. And while Amazon has a much weaker position when it comes to hardware, it has found success with its Echo smart-speaker products and Alexa voice-based OS.

It’s still far too early to crown Microsoft the winner of the AI race, but there’s a good chance Bill Gates is right about the significance that personal assistants will play in deciding the winners and losers of the revolutionary new AI trend.

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