Microsoft chief executive Satya Nadella said on the company’s 28 October 2026 earnings call that Microsoft is “bringing together Chat, Cowork, Autopilot, and Code into one unified experience”, according to the prepared remarks Microsoft posted. “We think of Copilot as the new OS for work,” he said.
In the same remarks he said “Over 50 million agents are now in the registry, up over 30 percent quarter over quarter”, referring to Agent 365, Microsoft’s platform for managing agents. By our arithmetic, that means the registry held at most about 38.5 million agents a quarter earlier.
Business Pill · The Model and the Harness
An evergreen Business Engineer explainer on the model and the harness built around it. It explains the general idea only and does not discuss Microsoft’s results.
The key insight:Microsoft says it has folded Chat, Cowork, Autopilot and Code into one Copilot it calls the new OS for work, and the figures Nadella gave sit in the layers under it: Microsoft IQ for context, Agent 365 for agents and Auto mode for models.
Nadella called it Microsoft’s “biggest update to Copilot to date”. He said: “It is one product experience across commercial and consumer, and comes with all of Office built in.”
He gave four usage measures: “Automated tasks have nearly doubled since July. Daily users are up nearly 50 percent quarter over quarter, and over 5X year over year. User satisfaction improved nearly 20 percent quarter over quarter to another all-time high.”
He added that “90 percent of Copilot queries use Auto mode, which dynamically routes tasks across models, optimizing for quality, speed, and cost.” Microsoft did not give a user count or a seat count in the remarks.
The layers Satya Nadella described under Copilot in Microsoft’s posted FY27 Q1 prepared remarks (28 October 2026), with the figures he gave for each. The layer grouping is our reading of the remarks.
Who Is Buying It at Scale
“The number of customers with more than 50,000 Copilot seats increased over 8X year over year,” Nadella said, naming Capgemini, HCLTech, Hitachi Group, Truist Financial and the UK Revenue and Customs Department.
He said Volkswagen “announced plans to deploy Copilot to more than 330,000 employees, one of the largest deployments to date in Europe.” He also said “thousands of customers” have bought E7, “which brings together Copilot, E5, Entra, and Agent 365.”
Nadella said Microsoft’s business model is “expanding from per-seat subscriptions to include consumption”. That pricing change is a separate story; this piece is about what goes into the product.
The Layers Under the Copilot Window
In our reading, the remarks cover four layers. For apps, Microsoft introduced “30 new Copilot skills across Dynamics 365” and said it is “helping every organization stand up their own infinite SaaS Factory.”
For context, Nadella said “Work IQ makes this context available to every agentic workload”, and that Microsoft IQ brings together “Work IQ, Fabric IQ, and Foundry IQ, as unified context for agentic systems.” He said “Nearly 60,000 customers are accessing context across Microsoft IQ, up 25 percent quarter over quarter.”
For agents, he described Agent 365 as “a platform for AI observability, enabling customers to manage, secure, and optimize the performance and cost of their agents.” For models, he said: “Beyond models, we are making the harness behind our own Copilot experiences available to customers in Foundry.”
On control, he said Microsoft’s approach “is to separate intelligence from authority, enforcing identity, permissions, monitoring, and containment outside the model itself.”
The Same Pattern in Code
For software development, Nadella said “Agent generated PRs have increased 6X over the past six months. And agents now open more than a third of all PRs on the platform”, referring to GitHub.
He said “GitHub Advanced Security revenue increased over 50 percent year over year”, and that Microsoft announced “broad availability of Copilot Fusion, which is all about bringing multi-model orchestration to software development.”
The Numbers Behind the Growth
By our arithmetic, nearly 60,000 Microsoft IQ customers after 25 percent growth implies about 48,000 a quarter earlier. More than 50 million agents after growth of over 30 percent implies at most about 38.5 million, so the registry added at least about 11.5 million agents in the quarter.
Both are our calculations from Microsoft’s rounded figures (“nearly”, “over”), so they are approximate. Microsoft did not give either prior-quarter figure.
As we read the remarks, the product announcement is the window; the disclosed numbers sit in the layers beneath it, from nearly 60,000 Microsoft IQ customers to over 50 million agents in the Agent 365 registry.
As we read the remarks, Microsoft gave growth rates for daily users, automated tasks and large-seat customers but no base figures for Copilot seats, users or revenue.
Nadella said 90 percent of Copilot queries use Auto mode, which routes tasks across models; Microsoft also said it is offering the harness behind its own Copilot experiences to customers in Foundry.
Microsoft CEO Satya Nadella, prepared remarks for the 28 October 2026 earnings call
The framework argues that the next jump “is not a better prompt. It is an operating system that wraps your AI”.
Nadella used similar language for Copilot, calling it “the new OS for work”. The framework does not discuss Microsoft’s quarter.
What Is Not Established
Microsoft did not disclose Copilot seats, paid users or Copilot revenue in the remarks. The usage measures are growth rates without a base. The prior-quarter figures above are our arithmetic from rounded numbers.
Quotations come from the prepared remarks Microsoft posted for the 28 October call; the question-and-answer session is not part of them.
This Week In The AI Supercycle
Execution Fault Lines, Concentrated Demand, and Geopolitical Firewalls
This week’s issue: the AI build is not short of demand for its parts. It is short of cheap money, and its end revenue rests on a narrow base of large, often venture-funded buyers.
Nadella said Microsoft has merged Chat, Cowork, Autopilot and Code into one Copilot that it calls “the new OS for work”, with context from Microsoft IQ, agents managed in Agent 365 and models routed by Auto mode. By our arithmetic, the Agent 365 registry added at least about 11.5 million agents in the quarter, to more than 50 million.
95,000+ executives read Business Engineer for the AI strategy frameworks cited by ChatGPT, Claude, and Perplexity.
A note on sourcing. Quotations come from the prepared remarks Microsoft posted for its 28 October 2026 earnings call. Prior-quarter figures are our arithmetic from Microsoft’s rounded growth rates.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
