Microsoft Is All-In on Agentic AI and Vibe Coding Now That It’s ‘Working’


During Microsoft’s latest earnings call on Wednesday, CEO Satya Nadella perhaps unintentionally summed up the current state of the company’s massive agentic AI push.

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“It sort of didn’t work until it started working,” Nadella said, referencing the Agent Mode feature in Microsoft Excel, “and that’s just because the model showed up.”

Agent Mode, a feature that uses AI to create and edit Excel workbooks in tandem with your actions, is now the default mode for Microsoft 365 Copilot and Premium subscribers in Excel, Word and PowerPoint as of last week. He said Microsoft’s investments in its AI infrastructure gave the company the usage capacity to implement the model that worked.

(Nadella used the term Agent Mode, but officially, Microsoft has retired that term, preferring the simpler “edit with Copilot.”)

That capacity played a big role during the earnings call, as Microsoft shifts toward charging customers for how much they use the AI, not just for access licenses. “We have a structural position in knowledge, work, coding [and] security,” he said. “And then you couple that with the right business model… which is user plus usage.”

Nadella said nearly 90% of Fortune 500 companies now have active agents built with “our low-code/no-code tools,” and the company is seeing its Copilot Credit consumption nearly double quarter-over-quarter as customers employ custom agents tailored to their workflows.

There was also a significant milestone, Nadella said: Microsoft Bing, the company’s 17-year-old search service, reached 1 billion active monthly users for the first time.

Usage pricing comes to GitHub

Nadella frequently mentioned GitHub, the software development platform that Microsoft purchased in 2018, as another standout. Starting June 1, GitHub Copilot is moving to a usage-based pricing model.

The number of enterprise subscribers on the platform has nearly tripled year-over-year, he said, with nearly 140,000 organizations now using GitHub Copilot.

Every GitHub Copilot plan will include a monthly allotment of GitHub AI Credits. According to the GitHub blog, “Usage will be calculated based on token consumption, including input, output and cached tokens, using the listed API rates for each model.”

Microsoft announced $82.9 billion in revenue for the quarter, an 18% increase from the previous year’s third quarter, during the period from January to March. Capital expenditures are expected to rise to over $40 billion to build out more capacity for AI tools — including massive data centers.





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