【MSFT】Microsoft invests $2.5 billion to set up a new company to help businesses choose AI tools

Microsoft (Microsoft, US: MSFT) established a new company, Microsoft Frontier Company, with $2.5 billion funding to help enterprise clients select and integrate artificial intelligence (AI) tools, enabling AI investments to generate returns faster.

Microsoft Frontier Company’s first clients include Unilever (UK: ULVR) and Novo Nordisk (US: NVO). The new company will help clients choose AI tools from Microsoft and external vendors, and connect them with clients’ internal data to meet actual business needs.

Help Enterprises Choose AI Tools

In recent years, large enterprises have stopped simply renting AI models from a single provider such as OpenAI or Anthropic, and instead use different technologies at the same time, including open-source models, then adjust them according to their own business needs. This approach is more costly and also means it takes longer to see returns from AI investments.

Microsoft said that the results of Microsoft Frontier Company’s work will be retained by customers rather than handed back to Microsoft. The new company will also compete with Palantir Technologies (US: PLTR) and Amazon’s (US: AMZN) Amazon Web Services (AWS), which previously launched a $1 billion embedded engineering division to help enterprises deploy AI.

A Mistake to Rely on Copilot Using Only OpenAI

Judson Althoff, Microsoft’s executive vice president of its business division, said the new company is partly rooted in Microsoft’s own experience. He said that as models such as DeepSeek and Google Gemini have been catching up to OpenAI, enterprises need greater flexibility to quickly switch between different AI models.

Responding to Reuters, Althoff said that when Microsoft built Copilot three years ago, it made a mistake by tying it only to the OpenAI model. He said enterprises need AI models to enhance intelligence, and they also need to switch among and fine-tune different advanced models.

Microsoft is one of OpenAI’s major investors. Earlier this year, it also added Anthropic models to Copilot to respond to enterprise clients’ demand for Anthropic products. Althoff said that for customers, the alignment between internal data and AI models is more important than any single model itself.

Microsoft’s stock price rose on Thursday, up about 1.9% to $391.71, nearing the intraday high of $391.97.