Microsoft celebrates its 50th anniversary this month. The company started as a small software startup co-founded by Bill Gates and Paul Allen in an Albuquerque, New Mexico, garage. It went on to revolutionize personal computing, business productivity and now — it hopes — artificial intelligence with its big investment in OpenAI, the maker of ChatGPT.

Microsoft has set about integrating the technology across its products, and it recently unveiled a slew of upgrades to its Copilot AI assistant.

They include Memory, which retains personal details like the foods you like or your kids' birthdays and can use that information to make your dinner reservations or pick out a gift. The Vision upgrade enables the AI to analyze photos and video and provide tips on, say, redecorating your kitchen.

Marketplace's Meghan McCarty Carino spoke with Yusuf Mehdi, consumer chief marketing officer at Microsoft, to learn more about the new features.

The following is an edited transcript of their conversation.

Yusuf Mehdi: Well, on Memory, I'm really excited about the idea that Copilot can now anticipate your needs and, you know, notify you of things that are upcoming. It can start to give you better answers. So for example, if you're always trying to solve a particular problem, you don't have to go back and ask it every single time. Now you can say, hey, remember that time I was trying to change the oil on my car, or I was trying to configure something on my PC? Copilot can say, oh yeah, this is what we did last time. Here's the answer for you. On things like Vision, one of the things that's beautiful is as you're walking around the world, if you have a question about something you're looking at, like a certain building, and you want to know the origins of it or you're looking at a — I was doing this yesterday with some friends — you look at a particular flower, you can just, you know, pull up your phone and say, tell me about this flower. And Copilot can answer that for you as well.

Meghan McCarty Carino: With this greater personalization and memory of personal details, I think always come concerns about privacy. How is Microsoft handling the security of, you know, this intimate personal data?

Mehdi: For sure, privacy and security are top of mind for us. I would say we start with that as the key feature because, as we've learned, it's more important that people trust the technology than it is any particular neat thing that you can do with it. So on things like Memory, you're completely in control. If you don't want to have Copilot remember things, you can just turn it off. If you want to selectively delete things that you've done, you can do that as well. With things like Vision, those are not on by default. You have to manually go turn those on, and then we'll have a very prominent notification that Copilot Vision is on so that you know when to turn it off when you're done using it.

McCarty Carino: And where are these kind of requests being processed? You know, all of the various tasks, are they going to the cloud? Are they on device?

Mehdi: Yeah, so the way it works is when you initiate a Copilot action, for example, if you say, hey, help me book a restaurant reservation for, you know, my wife's birthday. Essentially, what happens is Copilot uses the browser, your browser, to then essentially go to the website, and then Copilot tries to navigate and make reservations. So it'll go to the website, it'll find the links for reservation, and it'll use AI to figure out what's there. And then as appropriate, it'll check back in with you. So when the time comes to, for example, fill out a Captcha, if it's asking you to make sure that it's a human, then it'll tell you, hey, you need to complete this Captcha. And when it comes time to, you know, actually book the thing. If you, for example, need to enter your credit card, Copilot will tell you, hey, you need to take over and enter your credit card information.

McCarty Carino: So this kind of agentic AI, personalized AI, it is all the rage now, and there are kind of a lot of similar features in products out there, including even from, I think, Microsoft's partner OpenAI. What do you think differentiates Copilot from the others out there?

Mehdi: Well, one of the things we're doing at Microsoft is we actually have two Copilots. We have Copilot for your consumer life, and we have Microsoft 365 Copilot for your work life. For the Microsoft 365 Copilot, we can provide enterprise security. We have compliancy with the data in your enterprise. It can access your corporate graph data so that you get very unique capabilities there. On the consumer side, we lean more to providing a little bit more personality, a little bit more what we think of as IQ support, but EQ support, meaning it can support you with the environment as a whole, even beyond just answering questions. So the warmth, the personality, the support for you, it's a much richer experience, and when you use it, you really can tell the difference between it and tools that are one size fits all.

McCarty Carino: Microsoft would seem to have kind of a big scaling advantage here, with the Office suite already being so widely adopted. But given that scale, I mean, what is the cost of adding all these AI features and sort of training users to be more and more reliant on advanced AI to accomplish tasks like search that were much cheaper before you add [a large language model] in?

Mehdi: Yeah, that's a good question. There's two parts to it. First, I would say, on the proactive side, you're just so much more efficient using Copilot than say, search, because you can get right to the answer you want. You don't have to go through a bunch of links and eventually find what you want, and frankly, the accuracy is just that much better. So the time savings for you as an individual is significant from a cost of building it. We use a variety of different tools with Copilot and a variety of different AI models underneath the covers, so we're able to optimize the cost to serve and provide that functionality. And the way that technology is just moving at today's pace, we're ever increasing the ability to reduce the costs for offering these great capabilities for people.

McCarty Carino: Let's talk about another big cost, which is environmental. Microsoft famously has a goal to get to carbon negative by 2030 and all this AI uses an incredible amount of energy. How do you square that?

Mehdi: Well, we're very focused on our goals, and we're making great progress. We feel good about making our goals for 2030. Part of how we do that is we really, as I said before, take advantage of a number of technologies to reduce the cost, to reduce the power consumption, to answer those [questions]. Some of that is more advanced, sophisticated models. Some of it is we're able to run some of the AI locally on your device, on your computer, and so you don't actually have to use all of that power in the cloud. You can use your local PC, and that's what we have with these Copilot+ PCs that can run AI locally on your device.

McCarty Carino: When you think about the first 50 years of Microsoft, how do you define its legacy, and how are these new tools kind of bringing the company into the next 50 years of that legacy?

Mehdi: Well, one of the, you know, the visions and dreams Bill Gates had was really to build Microsoft as essentially a software factory so that it could produce all sorts of software at increasingly more accessible, more inexpensive ways, essentially building the platform for the software industry. And now, as we look forward, we're kind of back to the same roots. We want to build the platform for AI development for the world. We're building the AI tools that will allow anyone to be a great creator, have anyone be someone that can build the next big AI software application or, you know, computer experience. And so we're excited that at the next 50 years, at this place in time and this place with technology development, that is going to happen and we'll be an empowering company in that world.

More on this

Microsoft held its 50th anniversary festivities Friday at its headquarters in Redmond, Washington. But the event was interrupted by a couple of employees protesting Microsoft's connection to the war in Gaza.

An Associated Press investigation this year found AI models from Microsoft and OpenAI had been used as part of an Israeli military program to select bombing targets. Some employees also rallied outside the event.

Microsoft said in a statement that it provides "many avenues for all voices to be heard. Importantly, we ask that this be done in a way that does not cause a business disruption. If that happens, we ask participants to relocate. We are committed to ensuring our business practices uphold the highest standards."

On Friday, the AP reported that the two employees who interrupted the event had lost access to their work accounts, though it wasn't clear whether they were fired after the protest. Monday, a group representing both employees told the AP they had been fired. Microsoft did not immediately provide comment on the situation and at the time of this writing had not clarified what happened to the workers.