Microsoft bets big on AI agents at Build 2025

Tech behemoth Microsoft on Monday introduced dozens of AI tools to assist developers in integrating AI across the entire software development lifecycle.

Launched at Build 2025—Microsoft's annual developers conference—the platforms are designed to build AI agents efficiently, boost scientific discovery, and advance open standards and shared infrastructure and protocols.  

Microsoft is building an open agentic web where AI agents interact, make decisions, and perform tasks for individuals, teams, and companies. The company’s new updates will shape the software development lifecycle with AI. 

“Software engineering has always been about having the right tools to bring your ideas to life. We are continually evolving these tools. Github continues to be home for developers, and we are doubling down for developers building any applications—trust, security, compliance, auditability, and data residency are even more critical today,” said Satya Nadella, CEO of Microsoft, in his keynote speech. 

The updates span Microsoft’s full product suite, including GitHub, Azure, Windows, and Microsoft 365, focused on advancing AI agents capable of solving complex business problems.

One major highlight is a new coding agent built into GitHub Copilot. When a developer assigns an issue to Copilot or initiates a prompt in Visual Studio Code, the agent sets up a secure development environment powered by GitHub Actions. It also automatically adds code to a draft pull request, which developers can track in real time using session logs.

Microsoft said security rules like branch protections still apply, and a human employee must approve the changes before any automated build or deployment begins.

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Another key announcement was related to Azure AI Foundry, which helps developers design, fine-tune, and deploy AI agents and applications. Microsoft is adding xAI’s Grok 3 and Grok 3 Mini models to its ecosystem and introducing new tools like the Model Leaderboard and Model Router to aid model selection.

In a major push to be agent-first, the firm is launching NLWeb, a proposed open protocol that acts like “HTML for the agentic web.” With just a few lines of code, developers can turn websites into natural language interfaces that work with any model, allowing users to interact with content semantically.

Microsoft also announced broad support for the Model Context Protocol (MCP) across products like GitHub, Copilot Studio, Dynamics 365, Azure AI Foundry, Semantic Kernel, and Windows 11. The company has joined the MCP Steering Committee alongside GitHub and introduced new contributions to expand the protocol’s ecosystem.

This development comes as major tech companies double down on AI developer tools. Amazon, for instance, is developing its own AI coding assistant, Kiro, which is designed to generate code in real time, auto-document software, and identify potential bugs. 

Meanwhile, OpenAI is in talks to acquire AI coding startup Windsurf in a $3 billion deal. Windsurf had recently been in talks with investors, including General Catalyst and Kleiner Perkins, to raise fresh capital at the same $3 billion valuation.