Microsoft wants to turn Windows into an Agent workbench: AI can directly operate the computer and also use fewer tokens.

Beating AI News: Microsoft has announced its Windows "Hybrid Intelligence" plan, preparing to let AI Agents execute tasks directly on computers. After authorization, Copilot can read local files and recent activity, and can also organize files, troubleshoot issues, and write programs. In a Microsoft demonstration, it automatically gathered tax filing materials, renamed files, packaged attachments, and drafted an email to an accountant.

The key to this approach is having local AI and cloud AI work together. Copilot is responsible for receiving tasks, while Windows provides the ability to access files and execute operations. Some tasks can be handled by models on the computer, reducing cloud token consumption and keeping sensitive data local. When stronger reasoning capabilities are needed, cloud models are called upon.

To support local operation, Microsoft compressed the 137-billion-parameter coding model MAI Code 1.1 Flash to 53GB, allowing it to run on high-performance computers equipped with RTX Spark. GitHub Copilot will also use HydraFusion to automatically select local or cloud models, so that some coding tasks no longer depend on paid cloud inference.

Microsoft has also launched the MXC secure sandbox to limit the files and networks the Agent can access and prevent unauthorized operations. MXC is now officially open. New capabilities such as Copilot reading local files and performing computer operations will roll out to Copilot+ PCs in the coming months.