Microsoft Build Day 2: Catch Up on the Biggest Copilot AI, Agent and Chip News

Microsoft Build Day 2: Catch Up on the Biggest Copilot AI, Agent and Chip News Satya Nadella's keynote on Tuesday was chock-full of AI and computing. This is the biggest news, live from San Francisco. Microsoft Build Day 2 is underway, and we're live on the ground to bring you all the latest news. Tuesday's keynote address was full of surprise guests and introduced new AI software and hardware. Here's what you need to know. CEO Satya Nadella was joined by a number of guests during the nearly two-and-a-half-hour keynote. Nvidia CEO Jensen Huang and Qualcomm CEO Cristiano Amon both joined remotely to talk about the future of agentic AI computing. The "Claw Father" Peter Steinberger popped on stage to celebrate OpenClaw, the agentic AI platform that took the tech world by storm earlier this year, coming to Windows. And The Chainsmokers were there, too -- apparently the EDM duo are also tech venture capitalists. If there's one single through line from Build so far, it's that Microsoft is all in on AI. Our CNET team is on the ground in San Francisco to cover all the many ways Microsoft is integrating AI into its future. Follow along as we track every major announcement. OpenClaw creator: 'There's no stopping' AI agents Speaking during a breakout session at Microsoft Build 2026, OpenClaw creator Peter Steinberger said artificial intelligence agents are here to stay. Coders no longer have to figure out how to build software faster; they have to figure out how to get their agent to build software faster, he said. "It's only been a year since we've had coding agents, half a year since they got good, and now there's no stopping them," Steinberger said. OpenClaw and Microsoft announced during the Build keynote on Tuesday that a new system called Microsoft Execution Containers will allow you to create secure containers in which to run AI agents. That includes OpenClaw, the AI tool that allows you to run autonomous, always-on agents. "You can totally run OpenClaw inside your company now," Steinberger said during the keynote. Microsoft Discovery for scientists Built on Microsoft's cloud computing platform Azure, Microsoft Discovery is an agentic AI platform built for scientists and researchers. According to the tech giant, mining company BHP is already "using it to find copper-leaching solutions in months instead of years," while biopharma company GSK is using Microsoft Discovery for "drug discovery" and chemicals research company Syensqo is using it for semiconductor research and development. During an onstage demo during the Build keynote, David Carmona, VP of Microsoft Discovery and Quantum, showed how the discovery engine can explore hypotheses and perform long-running simulations for hours or even days. When he opened a slide that was already completed earlier by Microsoft Discovery, he showed that it was based on a research paper he had asked it to use, "internally bringing together public scientific literature and internal knowledge." "This is a critical asset because it provides complete visibility of the research, so scientists can be in full control," Carmona said. Microsoft Discovery is available from Tuesday, and a free Discovery app will be accessible in preview form for the scientific community this summer, requiring a GitHub Copilot account. MAI-Image-2.5 brings out Microsoft's creative side Microsoft is getting back into the creative AI space. It just dropped two new image generation models, named MAI-Image-2.5 and a flash variant. MAI-Image-2.5 is available now in PowerPoint and Foundry, with plans to roll out to OneDrive soon. Microsoft AI CEO Mustafa Suleyman said the new image model outperforms Google's Nano Banana, one of the most popular AI image tools available, in image editing. But it isn't the benchmark leader -- Suleyman said it placed second. It's an impressive stat, but I'm withholding any judgments until I can get my hands on the new model and see how it performs. Every AI image tool has its pros and cons, even so-called leaderboard darlings. These are two of seven new AI models from Microsoft AI. Microsoft also introduced the next generation of its AI models for voice generation, transcription and coding. Keep scrolling to read about them. Updates to AI speech recognition and voice generation Just two months after dropping MAI-Transcribe-1 and MAI-Voice-1, Microsoft has updated both its speech recognition and speech generation models. MAI-Transcribe-1.5 can transcribe 43 languages, while MAI-Voice-2 now has 15 additional languages and new voice options. AI coding model comes to Copilot Microsoft's MAI-Code-1, an AI coding model that was tuned for GitHub, is now available on Copilot and VS Code. Many AI companies have been focusing on building AI tools for coding this year, like OpenAI's Codex and Anthropic's Claude Code. This new model gives developers even more ways to use AI in their work, if they want to. First-ever reasoning model: Can it compete with Claude? One of the seven new Microsoft AI models launched during the Microsoft Build keynote was MAI-Thinking-1, its first reasoning model. It was trained using "clean and commercially licensed data," according to Microsoft, with high performance and low token cost. "We need an AI that places humanity first, prioritizes human well-being, and human progress. This is the core philosophy and motivation behind our superintelligence efforts and Microsoft," the company said during the keynote. Available now on Foundry in a private preview, Microsoft says the model is good at complex, multistep reasoning and code generation, and compares to Claude's Sonnet 4.61 and Opus 4.6. "It's a midsized, 35 billion active parameter model with a 128K context window," said Kyle Daigle, COO of GitHub and CMO of Microsoft Developer. Microsoft IQ: The full setup for AI agents Generally available as of Tuesday across GitHub Copilot, Microsoft Foundry and Copilot Studio, Microsoft IQ is billed as "a new context layer that grounds agents in both world knowledge and enterprise knowledge." In other words, it gives AI agents the context they need to draw from to complete tasks for you -- using both your own workplace info and the live internet. It's got a few different components: - Work IQ: Provides workplace context for AI agents working in organizations, including access across Microsoft 365 -- like emails, documents and meetings. This will be generally available on June 16. - Web IQ: A search engine for AI agents. - Fabric IQ: A shared semantic space for your data, models and systems. - Foundry IQ: Ties together retrieval from enterprise knowledge and the live internet. A new quantum computing chip To wrap things up, Nadella announced a new quantum computing chip, Majorana 2. The hardware builds off Microsoft's topological qubit technology to create more reliable qubits -- the material that makes advanced quantum computing possible. Majorana 2 produces qubits with a mean lifetime of 20 seconds -- up from just 1 to 12 milliseconds in Majorana 1. Some qubits had lifetimes of more than a minute. That comes from the use of lead in the materials, compared to the aluminum-based Majorana 1. "It's this combination of the reliability, the speed, the size which makes the topological approach so unique," Nadella said. Nadella said the company used its Microsoft Discovery AI research platform to help make the advancements. The step forward is significant, but don't expect a quantum-powered laptop anytime soon. Microsoft said in a blog post that the progress cut its timeline for a scalable quantum computer in half -- to now expecting to have one in 2029. A new Github Copilot app The Copilot app for GitHub is now in preview, bringing agentic AI development to desktop. Cassidy Williams, senior director of Developer Advocacy at GitHub, showed off a demo of the GitHub Copilot app, using it to code on the fly with multistep demands. "This app is your home base for development and operations on your computer," Williams said. "I have access to all the most popular models via my single GitHub Copilot subscription, including those from OpenAI, Anthropic and Google, and see all of them in our model picker." Copilot can request a different AI model while you use the GitHub app, switching from GPT 5.5 to Claude Opus 4.8 during the live demo. The Chainsmokers showing up to a tech event for no reason While some might remember listening to The Chainsmokers back when Microsoft had the Zune MP3 player, most of us wouldn't expect them to take center stage at a tech conference in 2026. But that's what happened just now during the Build keynote when the EDM-pop duo -- Alex Pall and Drew Taggart -- joined Satya Nadella on stage. "I'm sure you guys are wondering what timeline you're on where The Chainsmokers are at Microsoft," Pall joked with the crowd. Despite saying "we ain't ever gettin' older" in their song Closer, the band has aged somewhat, and become venture capitalists. The duo shared with Nadella that AI presents an opportunity to reimagine the entire software architecture of their enterprises. "Instead of humans producing outputs, it's machines producing outputs," said Taggart. All this goes to prove that it really does just take one somewhat popular song to be successful. But for some fans of The Chainsmokers, the band's success as angel investors might be... well, I'll just quote Closer: "I know it breaks your heart." Putting your work on autopilot Autonomous AI agents similar to OpenClaw are coming to Copilot and are being built into Microsoft's apps. These agents, called Autopilots, are essentially "enterprise-grade claws," Nadella said. The agents will be rolled out over time and will eventually become a full suite. "They're a totally new way to reduce toil and get you back to what you love," Nadella said. The first is called Scout. It can keep an eye on your Outlook inbox and Teams messages to monitor things that need your attention and help you prepare for meetings and tasks. Nadella