Microsoft launches $2.5 billion unit to push enterprise AI adoption
Microsoft Frontier will put 6,000 engineers with customers as companies press vendors to prove AI returns.
By Daniel Okafor · Business Editor
3 min read
Microsoft said Thursday it is putting $2.5 billion into a new business unit, Microsoft Frontier, to help corporate customers get more value from artificial intelligence. The move targets a problem facing many large companies: turning AI spending into results they can measure.
Judson Althoff, who leads Microsoft’s commercial business, said in a company blog post that Frontier will include 6,000 forward-deployed engineers. Microsoft describes those workers as industry specialists who will work directly with customers on AI projects rather than only selling software from a distance.
A push to make AI work inside companies
Microsoft’s plan comes as major AI vendors try to help customers adapt AI tools to specific business needs. Fortune reported that Amazon recently announced a $1 billion initiative using a similar forward-deployed engineer model, while OpenAI and Anthropic have also made multibillion-dollar investments in related efforts.
Althoff said Microsoft wants Frontier to go beyond typical programs of that kind because of its scale and range. He cited Microsoft’s work with the London Stock Exchange Group, saying the partnership helped LSEG’s finance department ask complex AI questions across structured and unstructured financial material.
Microsoft is also pitching flexibility as part of the offering. Althoff said customers using Microsoft’s platform can select models for different tasks from providers including OpenAI and Anthropic, as well as open-source options, without being tied to one model provider.
Althoff said Microsoft will protect customers’ proprietary information, including data and intellectual property. According to his blog post, that information will not be used to train models in ways that reduce the customer’s competitive advantage.
Pressure to show returns
Microsoft CEO Satya Nadella said in a LinkedIn post that Frontier is intended to help companies build their own AI capabilities. He said the goal is to let organizations convert their knowledge, processes and expertise into AI systems that keep improving.
The investment comes as Microsoft presses for broader use of Copilot, its AI assistant for business customers. Fortune reported that Copilot has not become widespread across the corporate market, even as Microsoft has spent billions of dollars on data centers that support AI models and other computing services.
Other large technology companies, including Amazon and Google, have also committed record spending to AI infrastructure, Fortune reported. Those companies are betting that customer demand will rise and that the cost of running AI systems will fall over time.
Microsoft also faces investor concern about AI rivals, including Anthropic and OpenAI, taking business from its established software products, according to Fortune. Fortune reported that Microsoft shares are down about 20% over the past year.
Palantir Technologies helped make the forward-deployed engineer model better known, particularly through its work with the U.S. government, Fortune reported. Shan Sinha, chief executive of safety-focused wearable startup Canopy and a former Microsoft and Google employee, told Fortune the current hiring push resembles the dot-com era, when companies sent workers to help customers build websites.
Althoff said Microsoft has seen measurable outcomes from AI work with companies including Land O’Lakes, Unilever and Novo Nordisk. He said Microsoft plans to expand that work globally with systems integrators including Accenture, Capgemini, EY, KPMG and PwC.
This story draws on original reporting from Fortune.