Manufacturing for tomorrow: Microsoft announces new industrial AI innovations from the cloud to the factory floor

After years of uncertainty from supply chain disruption and increased customer expectations, to changes in consumer demand and workforce shortages, manufacturing remains one of the most resilient and complex industries. Today, we are witnessing the manufacturing industry enter a transformative era, fueled by AI and new AI-powered industrial solutions. This AI-driven shift is prompting many organizations to fundamentally alter their business models and re-evaluate how to address industry-wide challenges like data siloes from disparate data estates and legacy products, supply chain visibility issues, labor shortages, and the need for upskilling employees, among others.  AI is more than just an automation tool, it’s a catalyst for innovation, efficiency and sustainability. AI innovation creates an opportunity to help manufacturers enhance time-to-value, bolster operations resilience, optimize factory and production costs and produce repeatable outcomes.

Ahead of Hannover Messe, one of the world’s largest manufacturing innovation events, Microsoft is announcing new AI and data solutions for manufacturers to help unlock innovation, enable intelligent factories, optimize operations and enhance employee productivity. The manufacturing industry has been incredibly resilient over the last decade and the infusion of new AI solutions signifies a critical transformation in this vital industry.

Unlock innovation and fuel the next generation of intelligent factories with data and AI

Manufacturing is one of the most data-intensive industries, generating an average of 1.9 petabytes worldwide every year, according to McKinsey Global Institute. And most of this data goes unused, leaving many valuable insights untapped. According to Gartner® Research, “Generative AI will transform the manufacturing industry to a level previously not available, by providing new insights and recommendations based on data and actionable information.”[1] In this era of AI, the importance of data continues to grow as organizations realize they are only scratching the surface of what’s possible.

To help customers leverage their data and insights, today, we are announcing the private preview of manufacturing data solutions in Microsoft Fabric, and copilot template for factory operations on Azure AI. These solutions help manufacturers unify their operational technology and information technology (IT) data estate and accelerate and scale data transformation for AI in Fabric, our end-to-end analytics SaaS-based platform. Copilot template for factory operations helps manufacturers to create their own copilots for front-line workers utilizing the unified data. Front-line employees can use natural language to query the data for knowledge discovery, training, issue resolution, asset maintenance and more. For example, if a factory plant manager wants to understand why a machine is breaking, they can query the copilot to get insights and resolve the issue in just days, instead of weeks.

As part of our private preview, Intertape Polymer Group (IPG) uses Sight Machine’s Manufacturing Data Platform to continuously transform data generated by its factory equipment into a robust data foundation for analyzing and modeling its machines, production processes and finished products. IPG is now using Sight Machine’s Factory CoPilot, a generative AI platform with an intuitive natural language chat interface, powered by the Microsoft Cloud for Manufacturing and the copilot template for factory operations on Azure AI. This tool facilitates the team’s ability to rapidly gather insights and direct work on production lines which previously operated like black boxes. Instead of working through manual spreadsheets and inaccessible data, all teammates including production, engineering, procurement and finance have better information to drive decisions on products and processes throughout the plant improving yield and reducing inventory levels.

Also in private preview, Bridgestone is partnering with Avanade to confront production challenges head-on, focusing on critical issues related to production disruptions and scheduling inefficiencies, like yield loss, which can escalate into quality issues. As a private preview customer collaborating with Avanade, Bridgestone aims to harness the power of manufacturing data solutions in Fabric and the copilot template for factory operations. Their goal is to implement a natural language query system that enables front-line workers, with different levels of experience, with insights that lead to faster issue resolution. The team is excited to establish a centralized system that efficiently gathers and presents critical information from various sources and facilitates informed decision-making and enhances  operational agility across Bridgestone’s production ecosystem.

Creating more resilient operations and supply chains

A robust data strategy must span from cloud to the shop floor to enable the level of scale and integration that will help manufacturers accelerate industrial transformation across all operations. However, gathering OT data and integrating the data into multiple solutions is not an easy task for manufacturers. Production is complex, and their sensors, machines and systems are highly varied. Each site is unique and ensuring the right data is being shared with the right person at the right time is onerous and costly. Unfortunately, these scale and integration hurdles also block the enterprise from scaling AI solutions across every shop floor or gaining global visibility across all their sites.

With this in mind, Microsoft recently launched the adaptive cloud approach, including Azure IoT Operations. Our adaptive cloud is a framework to modernize edge infrastructure across operations, like factories, to take advantage of a modern, composable and connected architecture for your applications. Our adaptive cloud approach creates the level of scale needed to repeat AI solutions across production lines and sites. Putting the adaptive cloud approach into practice, Azure IoT Operations leverages open standards and works with Microsoft Fabric to create a common data foundation for IT and OT collaboration. To find out more about our adaptive cloud approach and Azure IoT Operations, visit our Azure Blog.

Looking to increase global operational efficiency, Microsoft’s customer Electrolux Group, developed a single platform to build, deploy and manage several key manufacturing use cases. Their platform’s goal is to capture all manufacturing data, contextualize it and make it available for real time decision-making across all levels of the organization within a scalable infrastructure. To enable this, Electrolux Group is adopting a full stack solution from Microsoft that leverages the adaptive cloud approach, including Azure IoT Operations. Using this approach, Electrolux Group is looking to reduce overhead from multiple vendors, a consistent and simple way to deploy and manage multiple use cases at a site, and then the ability to scale those solutions to multiple sites with simple and consistent fleet management.

Supply chain disruption is not new; however, its complexity and the rate of change are outpacing organizations’ ability to address issues. Manufacturers are under pressure to prevent and minimize disruptions, and as a result, almost 90% of supply chain professionals plan to invest in ways to make their supply chains more resilient. To support our customers, we’re announcing the upcoming preview of a traceability add-in for Dynamics 365 Supply Chain Management that will allow businesses to increase visibility into their product genealogy through the different steps of the supply chain. Traceability will also help businesses track events and attributes throughout supply chain processes and will provide an interface to query and analyze data.

Empowering front-line workers with AI tools to improve productivity,and job satisfaction

To enable intelligent factory operations, an empowered and connected workforce is key. According to the latest Work Trend Index, 63% of front-line workers do repetitive or menial tasks that take time away from more meaningful work. Additionally, 80% of front-line workers think AI will augment their ability to find the right information and the answers they need. From the office to the factory floor to the field, we are building solutions to address the unique challenges manufacturers face — by helping streamline front-line operations, enhance communication and collaboration, improve employee experience and strengthen security across shared devices.

Today we’re introducing new capabilities for Copilot in Dynamics 365 Field Service that help service managers and technicians efficiently find information, resolve issues while keeping customers updated at every step, and help summarize their work. Generally available, field service managers can interact with Copilot to find pertinent information about work orders using natural language in their flow of work in the Dynamics 365 Field Service web app. Additionally, available in public preview, front-line workers can configure and customize the fields Copilot uses to generate summaries within Dynamics 365 Field Service.

To further streamline collaboration among field service managers, technicians, and remote experts, Dynamics 365 Field Service users with the Field Service app in Teams can now share links to work orders that automatically expand to provide key details. This capability is generally available starting today. Should technicians need additional assistance from remote experts to resolve issues, they can simply access Dynamics 365 Remote Assist capabilities in the flow of work in Microsoft Teams with anchored spatial annotations even if the camera moves.

Microsoft ecosystem and partnerships in the era of AI

These new industry innovations in data and AI are strengthened through the Microsoft Cloud for Manufacturing, which enables organizations to accelerate their data and AI journey by augmenting the Microsoft Cloud with industry-relevant data solutions, application templates and AI services. The Microsoft Cloud for Manufacturing brings the best of Microsoft and our partners to jointly accelerate the digital transformation in manufacturing.

Microsoft is a trusted co-innovation partner committed to working with enterprises to unlock the true potential of AI solutions and transform the industry.​ Our offerings can also be customized by an unmatched global ecosystem of trusted partners. This year, we’re proud to have the following valued partners demonstrate at our Hannover Messe booth: Accenture, Annata, Ansys, Avanade, AVEVA, Blue Yonder, Bosch, CapGemini, Cognite, Connected Cars DK, DSA, HERE Technologies, Hexagon, Netstar, NVIDIA, o9 Solutions, PTC, Rockwell Automation, SAP, Syntax, Sight Machine, Siemens, SymphonyAI, Tata Consultancy Services (TCS), Threedy, ToolsGroup and Tulip Interfaces.

We look forward to seeing you at the Microsoft Booth in Hall 17 Stand G06, where you can join guided tours, and speak with manufacturing and industrial experts from around the world.



[1]  Gartner®, GenAI use-case prism for manufacturing, By Ellen Eichhorn, Sohard Aggarwal, July 2023. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.


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Microsoft and G42 partner to accelerate AI innovation in UAE and beyond

Strategic partnership highlights:

  • Expansion of partnership between Microsoft and G42 to deliver advanced AI solutions with Microsoft Azure across various industries and markets.
  • Microsoft will invest $1.5 billion in G42 for a minority stake in G42 and join its board of directors.
  • Companies will support the establishment of a $1 billion fund for developers to boost AI skills in the United Arab Emirates (UAE) and broader region.

Expanded strategic partnership:

Today, we announced a strategic investment in G42, a leading AI company in the UAE, to co-innovate and deliver advanced AI solutions with Microsoft Azure for various industries and markets across the Middle East, Central Asia and Africa.

Microsoft will invest $1.5 billion in G42 for a minority stake in the company with Brad Smith, Microsoft Vice Chair and President, joining G42’s board of directors — strengthening the long-standing collaboration and mutual synergies between the two companies. With the breadth of the Microsoft Cloud and its differentiated AI capabilities, the deal significantly advances G42’s strategy of delivering generative AI and next-generation infrastructure and services for a range of customers across financial services, healthcare, energy, government and education.

The commercial partnership is backed by assurances to the U.S. and UAE governments through a first-of- its-kind binding agreement to apply world-class best practices to ensure the secure, trusted, and responsible development and deployment of AI. Microsoft and G42 will work closely together to elevate the security and compliance framework of their joint international infrastructure. Both companies will move forward with a commitment to comply with U.S. and international trade, security, responsible AI, and business integrity laws and regulations. The work on these topics is governed by a detailed Intergovernmental Assurance Agreement between G42 and Microsoft that was developed in close consultation with both the UAE and U.S. governments.

Foundational to the partnership is G42’s trust and commitment in Microsoft’s cloud platform. G42 will expand its existing commitment to deploying Microsoft Cloud offerings, demonstrating confidence in Microsoft as its preferred partner to enhance services and deliver value-added solutions to its customers. With the partnership, G42’s data platform and other essential technology infrastructure will migrate to Microsoft Azure to benefit from industry-leading performance, scalability and security capabilities. Migrating to Azure will also support AI product development that allows G42 to create services that can scale to achieve faster delivery times for its customers globally. Together, we look forward to accelerating AI transformation in emerging markets and advancing equitable growth in AI globally.

Building on our technical co-innovation

G42 brings an excellent track record as a leader actively driving global progress and accessibility in AI technologies, and Microsoft and G42 have worked closely together to help optimize Cloud and AI solutions for the Middle East.

Last year, G42 was one of the first partners to commit to implementing Microsoft Cloud for Sovereignty offering to UAE-based organizations. G42 is helping public sector and regulated industries to use new platform capabilities for securing sensitive data, providing access to the latest cloud and AI features available on Azure public cloud, and ensuring they comply with local privacy and regulatory requirements. G42’s deep understanding of UAE sovereignty requirements and technical capabilities are central to customizing Microsoft Cloud for Sovereignty to help address customer’s specific needs.

Microsoft also announced that Jais, G42’s Arabic Large Language Model (LLM), will be available in the Azure AI Model Catalog. This model represents a significant advancement for the Arabic world in AI, offering over 400 million Arabic speakers the opportunity to explore the potential of generative AI. Jais is the world’s first Arabic LLM developed by G42 in collaboration with Cerebras, Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), and Med42 LLM, a generative AI model to streamline medical reporting. The expanded partnership with Microsoft will help accelerate the adoption of G42’s groundbreaking AI products and services, such as Jais, making them available through Microsoft Azure.

Announced in March of this year, First Abu Dhabi Bank (FAB), the UAE’s largest bank, will collaborate with Core42, a subsidiary of G42, to accelerate its digital transformation journey leveraging Microsoft Azure trusted cloud platform for enterprises. FAB will move its datacenter and workload to Azure, enabling the bank to use Core42’s sovereign controls platform, which is built on Azure and ensures the highest standards of data sovereignty and compliance with UAE regulations.

One of the leading examples of precision medicine in action is the collaboration between G42 subsidiary M42, a global health care company, the Broad Institute of MIT and Harvard, Microsoft, and the International Center for Genetic Disease (ICGD). The partners are using Terra, a scalable and secure platform for biomedical research, to enable data sharing and analysis across different institutions and countries. Terra, powered by Microsoft Azure, allows researchers to access and analyze anonymized genomic data from the Emirati Genome Program, which has completed over 500,000 whole genome sequences to date. By applying AI technologies to this rich data source, the collaborators aim to advance clinical genomic research and disease prevention, as well as support precision medicine and life science strategies globally.

Accelerating access to digital innovation in UAE and the region

Along with providing advanced AI capabilities, the partnership will benefit regions beyond the UAE in ways that will improve how enterprises experience cloud computing. By bringing expanded low latency datacenter infrastructure to emerging markets, Microsoft and G42 will help accelerate digital transformation across key industries in those regions. This will provide countries across the Middle East, Central Asia and Africa with expanded access to services and technologies that will allow them to address the most challenging business concerns while ensuring the highest standards of security and privacy.

Furthermore, the partnership will also support the development of a skilled and diverse AI workforce and talent pool that will drive innovation and competitiveness for the UAE and broader region with the investment of $1 billion in a fund for developers.

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Announcing new Microsoft AI Hub in London

Microsoft recently announced the creation of Microsoft AI, a newly formed organization to help advance our consumer AI products and research, including Copilot. Building on that news, I’m thrilled to share that Microsoft AI is opening a new AI hub in the heart of London. Microsoft AI London will drive pioneering work to advance state-of-the-art language models and their supporting infrastructure, and to create world-class tooling for foundation models, collaborating closely with our AI teams across Microsoft and with our partners, including OpenAI. 

The new AI hub will be led by Jordan Hoffmann, an exceptional AI scientist and engineer. Prior to joining Microsoft AI, Hoffmann distinguished himself as an AI pioneer at Inflection and DeepMind, based in London. Hoffmann will be joined by a talented group of Microsoft AI team members based in our London Paddington office.   

There is an enormous pool of AI talent and expertise in the U.K., and Microsoft AI plans to make a significant, long-term investment in the region as we begin hiring the best AI scientists and engineers into this new AI hub.  

In the coming weeks and months, we will be posting job openings and actively hiring exceptional individuals who want to work on the most interesting and challenging AI questions of our time. We’re looking for new team members who are driven by impact at scale, and who are passionate innovators eager to contribute to a team culture where continuous learning is the norm.  

This is great news for Microsoft AI and for the U.K.  As a British citizen, born and raised in London, I’m proud to have co-founded and built a cutting-edge AI business here. I’m deeply aware of the extraordinary talent pool and AI ecosystem in the U.K., and I’m excited to make this commitment to the U.K. on behalf of Microsoft AI. I know – through my close work with thought leaders in the U.K. government, business community and academia – that the country is committed to advancing AI responsibly and with a safety-first commitment to drive investment, innovation and economic growth. Our decision to open this hub in the U.K. reflects this ambition.  

The Microsoft AI London hub adds to Microsoft’s existing presence in the U.K., including the Microsoft Research Cambridge lab, home to some of the foremost researchers in the areas of AI, cloud and productivity. At the same time, it builds off Microsoft’s recently announced £2.5 billion investment to upskill the U.K. workforce for the AI era and to build the infrastructure to power the AI economy, including our commitment to bring 20,000 of the most advanced GPUs to the country by 2026. 

Stay tuned for more updates as we continue to push the boundaries of what’s possible with AI and extend the benefits to every person and organization across the U.K.  

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Advancing science: Microsoft and Quantinuum demonstrate the most reliable logical qubits on record with an error rate 800x better than physical qubits

Advancing science: Microsoft and Quantinuum demonstrate the most reliable logical qubits on record with an error rate 800x better than physical qubits

Two Quantinuum scientists working in a lab
Quantinuum scientists making adjustments to a beam line array used to deliver laser pulses in H-Series quantum computers. Photo courtesy of Quantinuum.

Today signifies a major achievement for the entire quantum ecosystem: Microsoft and Quantinuum demonstrated the most reliable logical qubits on record. By applying Microsoft’s breakthrough qubit-virtualization system, with error diagnostics and correction, to Quantinuum’s ion-trap hardware, we ran more than 14,000 individual experiments without a single error. Furthermore, we demonstrated more reliable quantum computation by performing error diagnostics and corrections on logical qubits without destroying them. This finally moves us out of the current noisy intermediate-scale quantum (NISQ) level to Level 2 Resilient quantum computing.

This is a crucial milestone on our path to building a hybrid supercomputing system that can transform research and innovation across many industries. It is made possible by the collective advancement of quantum hardware, qubit virtualization and correction, and hybrid applications that take advantage of the best of AI, supercomputing, and quantum capabilities. With a hybrid supercomputer powered by 100 reliable logical qubits, organizations would start to see scientific advantage, while scaling closer to 1,000 reliable logical qubits would unlock commercial advantage.

Advanced capabilities based on these logical qubits will be available in private preview for Azure Quantum Elements customers in the coming months.

YouTube Video

A purpose-built computing platform for science

Many of the hardest problems facing society, such as reversing climate change, addressing food insecurity and solving the energy crisis, are chemistry and materials science problems. However, the number of possible stable molecules and materials may surpass the number of atoms in the observable universe. Even a billion years of classical computing would be insufficient to explore and evaluate them all.

That’s why the promise of quantum is so appealing. Scaled quantum computers would offer the ability to simulate the interactions of molecules and atoms at the quantum level beyond the reach of classical computers, unlocking solutions that can be a catalyst for positive change in our world. But quantum computing is just one layer for driving these breakthrough insights.

Whether it’s to supercharge pharma productivity or pioneer the next sustainable battery, accelerating scientific discovery requires a purpose-built, hybrid compute platform. Researchers need access to the right tool at the right stage of their discovery pipeline to efficiently solve every layer of their scientific problem and drive insights into where they matter most. This is what we built with Azure Quantum Elements, empowering organizations to transform research and development with capabilities including screening massive data sets with AI, narrowing down options with high-performance computing (HPC) or improving model accuracy with the power of scaled quantum computing in the future.

We continue to advance the state-of-the-art across all these hybrid technologies for our customers, with today’s quantum milestone laying the foundation for useful, reliable and scalable simulations of quantum mechanics.

Moving toward resilience

In an article I wrote on LinkedIn, I used a ‘leaky boat’ analogy to explain why fidelity and error correction are so important to quantum computing. In short, fidelity is the value we use to measure how reliably a quantum computer can produce a meaningful result. Only with good fidelity will we have a solid foundation to reliably scale a quantum machine that can solve practical, real-world problems.

For years, one approach used to fix this leaky boat has been to increase the number of noisy physical qubits together with techniques to compensate for that noise but falling short of real logical qubits with superior error correction rates.  The main shortcoming of most of today’s NISQ machines is that the physical qubits are too noisy and error-prone to make robust quantum error correction possible. Our industry’s foundational components are not good enough for quantum error correction to work, and it’s why even larger NISQ systems are not practical for real-world applications.

The task at hand for the entire quantum ecosystem is to increase the fidelity of qubits and enable fault-tolerant quantum computing so that we can use a quantum machine to unlock solutions to previously intractable problems. In short, we need to transition to reliable logical qubits — created by combining multiple physical qubits together into logical ones to protect against noise and sustain a long (i.e., resilient) computation. We can only obtain this with careful hardware and software co-design. By having high-quality hardware components and breakthrough error-handling capabilities designed for that machine, we can get better results than any individual component could give us. Today, we’ve done just that.

“Breakthroughs in quantum error correction and fault tolerance are important for realizing the long-term value of quantum computing for scientific discovery and energy security. Results like these enable continued development of quantum computing systems for research and development.”
Dr. Travis Humble, Director, Quantum Science Center, Oak Ridge National Laboratory

A breakthrough for handling quantum errors

That’s why today is such a historic moment: for the first time on record as an industry, we’re advancing from Level 1 Foundational to Level 2 Resilient quantum computing. We’re now entering the next phase for solving meaningful problems with reliable quantum computers. Our qubit-virtualization system, which filters and corrects errors, combined with Quantinuum’s hardware demonstrates the largest gap between physical and logical error rates reported to date. This is the first demonstrated system with four logical qubits that improves the logical over the physical error rate by such a large order of magnitude.

Graphic demonstrating the largest gap between physical and logical error rates yet detected
We’ve been able to demonstrate the largest gap between physical and logical error rates yet detected — far below the break-even point, now within a regime where quantum error correction is valuable and works.

As importantly, we’re also now able to diagnose and correct errors in the logical qubits without destroying them referred to as “active syndrome extraction.” This represents a huge step forward for the industry as it enables more reliable quantum computation.

With this system, we ran more than 14,000 individual experiments without a single error. You can read more about these results here.

“Quantum error correction often seems very theoretical. What’s striking here is the massive contribution Microsoft’s midstack software for qubit optimization is making to the improved step-down in error rates. Microsoft really is putting theory into practice.”
Dr. David Shaw, Chief Analyst, Global Quantum Intelligence

A long-standing collaboration with Quantinuum

Since 2019, Microsoft has been collaborating with Quantinuum to enable quantum developers to write and run their own quantum code on ion-trap qubit technology which includes high-fidelity, full connectivity and mid-circuit measurements. Multiple published benchmark tests recognize Quantinuum as having the best quantum volumes, making them well-positioned to enter Level 2.

“Today’s results mark a historic achievement and are a wonderful reflection of how this collaboration continues to push the boundaries for the quantum ecosystem. With Microsoft’s state-of-the-art error correction aligned with the world’s most powerful quantum computer and a fully integrated approach, we are so excited for the next evolution in quantum applications and can’t wait to see how our customers and partners will benefit from our solutions especially as we move towards quantum processors at scale.”
Ilyas Khan, Founder and Chief Product Officer, Quantinuum

Quantinuum’s hardware performs at physical two-qubit fidelity of 99.8%. This fidelity enables application of our qubit-virtualization system, with diagnostics and error correction, and makes today’s announcement possible. This quantum system, with co-innovation from Microsoft and Quantinuum, ushers us into Level 2 Resilient.

Pioneering quantum supercomputing, together

At Microsoft, our mission is to empower every individual and organization to achieve more. We’ve brought the world’s best NISQ hardware to the cloud with our Azure Quantum platform so our customers can embark on their quantum journey. This is why we’ve integrated artificial intelligence with quantum computing and cloud HPC in the private preview of Azure Quantum Elements. We used this platform to design and demonstrate an end-to-end workflow that integrates Copilot, Azure compute and a quantum algorithm running on Quantinuum processors to train an AI model for property prediction.

Today’s announcement continues this commitment by advancing quantum hardware to Level 2. Advanced capabilities based on these logical qubits will be available in private preview for Azure Quantum Elements in the coming months.

Lastly, we continue to invest heavily in progressing beyond Level 2, scaling to the level of quantum supercomputing. This is why we’ve been advocating for our topological approach, the feasibility of which our Azure Quantum team has demonstrated. At Level 3, we expect to be able to solve some of our most challenging problems, particularly in fields like chemistry and materials science, unlocking new applications that bring quantum at scale together with the best of classical supercomputing and AI — all connected in the Azure Quantum cloud.

We are excited to empower the collective genius and make these breakthroughs accessible to our customers. For more details on how we achieved today’s results, explore our technical blog, and register for the upcoming Quantum Innovator Series with Quantinuum.

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Sustainable by design: Advancing the sustainability of AI

During the past year, the pace of AI adoption has accelerated significantly, ushering in groundbreaking advances, discoveries and solutions with the potential to help address humanity’s biggest problems. We see this as a massive platform shift, akin to the printing press, which was not just an invention, but a technology that shaped a new economy. Alongside the incredible promise and benefits of AI, we recognize the resource intensity of these applications and the need to address the environmental impact from every angle.

In line with our commitment to responsible AI and our ambitious sustainability commitments, we’re determined to tackle this challenge so the world can harness the full benefits of AI. There are three areas where we’re deeply invested and increasing our focus. The first is optimizing datacenter energy and water efficiency. The second is advancing low-carbon materials, creating global markets to help advance sustainability across industries. And the third is improving the energy efficiency of AI and cloud services, empowering our customers and partners with tools for collective progress.

1. Optimizing datacenter energy and water efficiency

Over the past decade, our quest to innovate across every part of our cloud infrastructure to deliver more sustainable cloud services has led to many changes across how we design, build and operate our datacenters. As we continue this work, two of the biggest challenges we’re addressing are energy management and water intensity.

Energy management

The energy intensity of advanced cloud and AI services has driven us to accelerate our efforts to drive efficiencies and energy reductions. In addition, we have expanded our support to grow the availability of renewable energy, both for our own operations and for the communities in which we operate.

To continue driving improvements in datacenter energy management, we work to reduce peak power, safely harvest unused power, increase server density in existing datacenters through intelligent utilization and power-aware virtual machine allocation, and drive efficiency all the way to our chips and code.

With recognition of the need to continue bringing more renewable energy online, we currently have more than 135 renewables projects in our power purchase agreement (PPA) portfolio globally, a powerful mechanism to support the global energy transition. In the way we design, build and operate our datacenters, we’re focused on the path to 100% zero-carbon electricity 100% of the time.

We’re also working on solutions that enable datacenters to provide energy back to the grid to contribute to local energy supply during times of high demand. For example, in Ireland we built batteries into wind turbines for a wind energy project to capture energy when the turbines over-perform and deliver that energy to the local grid. In Denmark, excess heat created in a Microsoft datacenter will provide heat to the local community, producing enough heat to warm around 6,000 local homes. Both are examples of our work to use our data centers as a source of electricity to relieve pressure on local electric grids.

Water intensity

Currently, many datacenters rely on water for two reasons: directly for cooling, and indirectly for electricity generation. Although at a global scale total water consumption by datacenters is relatively small, weighing in about 0.1% of national water use in the U.S.1 we recognize the impact of datacenter operations on water-stressed areas, and are working to reduce this impact and design solutions that advance our progress on the road to water positive.

We take a holistic approach to water reduction across our business, from design to efficiency, looking for immediate opportunities through operational usage and, in the longer term, through design innovation to reduce, recycle and repurpose water. We’ve found success in using direct air instead of water to cool datacenters, harvesting rainwater, and procuring reclaimed water from utilities to reduce our dependence on fresh water. For example, in our Sweden datacenters, we will use a process called free cooling, a simple, cost-effective method that results in a 30% reduction in energy costs and 90% less water usage than standard systems.

2. Advancing low-carbon materials

For our future datacenters and to help drive progress industry-wide, another way we can advance progress is by helping to accelerate markets for low-carbon building materials. As a sector, building materials such as steel and cement are currently some of the highest contributors to the carbon cost of new construction, together producing an estimated 13.5% of global carbon emissions.2

Innovations in green steel3 and lower-carbon cement are rapidly emerging, however, these markets are still nascent and need significant investment to scale up and bring supply online.

With our $1 billion Climate Innovation Fund, we’re investing to hasten the development and deployment of new climate innovations, especially for underfunded sectors and supply-constrained markets like lower-carbon building materials. For example, we are investing in solutions such as H2 Green Steel to expand market supply of near-zero carbon steel4 which can deliver up to 95% lower CO2 emissions than conventional steel. We are also evaluating use of near-zero carbon steel in our own building materials and equipment supply chains.

Similarly, we’re working to broaden availability of low-carbon concrete and other construction materials through commercial projects and collaboration with the largest datacenter companies in the world. In Washington state, our pilot program utilizes concrete alternatives like biogenic limestone and fly ash and slag with the goal of lowering the embodied carbon in concrete by more than 50% compared to traditional concrete mixes. With these investments, we aim to facilitate the commercialization of materials that can make an outsized impact on carbon reduction, for our own construction and the broader industry.

3. Improving energy efficiency of AI and cloud services

Reducing the energy needed to power AI and cloud services up front is another critical component of the solution. We’re working to support developers and IT professionals with tools to optimize models and code, exploring ways to reduce the energy requirements of AI, and harnessing the power of these advanced technologies to drive energy breakthroughs.

As a founding member of the Green Software Foundation, we collaborate with other industry-leading organization to help grow the field of green software engineering, contribute to standards for the industry and work together to reduce the carbon emissions of software. Across our cloud services, we’re working to ensure IT professionals have the information they need to better understand and reduce the carbon emissions associated with their cloud usage.

As AI scenarios increase in complexity, we’re empowering developers to build and optimize AI models that can achieve similar outcomes while requiring fewer resources. Over the past few months, we’ve released a suite of small language models (SLMs) called “Phi” that achieve remarkable performance on a variety of benchmarks, matching or outperforming models up to 25x larger. Now available in the Azure AI Studio model catalog, Phi-2 offers a compact model for research and development or fine-tuning experimentation on a variety of tasks.

We’ve learned that the complex sustainability challenges we face today are best addressed through multidisciplinary, multi-sector collaboration, and energy breakthroughs are no exception. We recently collaborated with the Department of Energy’s Pacific Northwest National Laboratory (PNNL) using advanced AI models to find new materials that can reduce reliance on traditional battery materials such as lithium. The team screened over 32 million materials, discovered 500,00 stable candidates, and synthesized one promising candidate to a working prototype, shortening a process that can take years to a matter of days.

These highlights provide a glimpse into our work to build and operate cloud services more sustainably, advancing solutions that can reduce the future impact of AI. Our ambitious 2030 targets to become carbon negative, water positive, zero waste and to protect biodiversity require continued innovation across every aspect of our operations, and we’re committed to sharing what we learn along the way. Stay tuned for more on this topic in the months ahead.

Learn more:

To learn more, visit the Microsoft Sustainability website and read the whitepaper Accelerating Sustainability with AI. To learn how we’re integrating AI into our sustainability solutions, watch the digital event This is AI . . . for Sustainability.



Sources in footnotes:

1Data centre water consumption | npj Clean Water (

2Cement and steel — nine steps to net zero (

3What is green steel and how can it help us reach net zero? | World Economic Forum

4Iron & steel – IEA


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From vision to reality: Microsoft’s partners embrace AI to deliver customer value

From vision to reality: Microsoft’s partners embrace AI to deliver customer value

Artificial intelligence is a defining technology of our time. Over the past year we’ve begun to see how it can unlock profound possibilities for individuals, organizations and society — and it’s clear that we have only scratched the surface.  

For Microsoft and our partners across industries, AI offers a generational moment to reimagine the capabilities that software and services can provide. Our goal at Microsoft is to innovate and democratize our breakthroughs in AI — and the opportunity for partners is far greater than the sum of AI technologies themselves.  

For this State of the Partner Ecosystem moment, we’ll share how partners are seizing the opportunities that AI offers and making its promise real for organizations across the world. We’ll highlight partners who are building AI-powered solutions to innovate across industries, including three partners who are: 

  • Helping people and organizations achieve, in months, what once might have been a multi-year endeavor. 
  • Innovating in higher education by streamlining work in marketing, admissions and student advising. 
  • Empowering real-time decision making at the point of impact across the supply chain. 

First, we’ll look at how Microsoft is empowering our partners to innovate, build and differentiate with AI through a combination of technology advancements, an industry leading partner program and true market differentiation. During this time of AI transformation, there has never been a greater time to be a Microsoft partner, and our partners are fully embracing this new opportunity.

Unprecedented momentum: the Microsoft AI Cloud Partner Program 

Microsoft is driving innovation in generative AI, with new Azure OpenAI Services and an expanding portfolio of Copilot offerings. Today, we offer the most comprehensive commercial portfolio in the market with AI infused everywhere from the cloud to the edge, and across every solution area.  

Partners can tap into all this innovation through the Microsoft AI Cloud Partner Program. Through research, partnership, and new investments, we are bringing partners the capabilities and benefits to help them empower customers of every size, in every industry.  

Just as AI capabilities are infused throughout our technology portfolio, AI benefits are wired throughout the partner program. And today we are announcing enhancements to enable partners to create an AI-powered future, including:  

  • The expansion of AI skilling, boot camps and events 
  • New benefits packages with product enhancements like Microsoft 365 developer, increased Azure credits, and Visual Studio enterprise, to support AI practice growth 
  • New designations for partners to establish certified AI solutions or ways to differentiate themselves. 

This builds on the incredible momentum we’ve seen since we announced the Microsoft AI Cloud Partner Program last July. In fact, the Microsoft AI Transformation Partner Playbook outlining new possibilities with AI has been downloaded over 35,000 times. Our free go-to-market asset, the Era of AI marketing campaign-in-a-box, has been downloaded over 13,250 times.  

Today more than 13,000 partners building solutions with Microsoft Azure AI, serving more than 53,000 customers with generative AI capabilities alone. Our partner ecosystem is rising to meet demand with a nearly 250 percent increase in the number of generative AI-related partners in the past eight months. 

When you add that up, it points to a year of exponential innovation and growth for partners, and we are continuing to develop new ways to support this growth curve. Here are some specifics on the updates we are making to the Microsoft AI Cloud Partner Program in the coming months.

An infographic showing a thoughtful person alongside a statistic: nearly 250% increase in partners transacting with generative AI in the last eight months.

Program updates, including new designations and certifications for partners

Solutions partner designations and specializations are one way we help partners differentiate themselves in the market. Designations and certifications help to verify skills and validate the effectiveness of solutions so customers can find the partner and technology that’s right for their needs. 

To obtain designations and specializations, partners must meet skilling and performance requirements, and provide customer evidence to demonstrate their capabilities — and partners have embraced this opportunity with Microsoft AI. We have seen 58 percent growth since last July in partner designations for Azure Data and AI solutions, and 172 percent growth in partner specializations for the Build and Modernize AI apps with Azure and AI and Machine Learning designations.  

To build on this momentum, today we are announcing several new designations for partners across software, services and training. 

A new set of designations for partners who develop software: Solutions Partner with certified software 

Today, we are pleased to announce the general availability of Solutions Partner[i] with certified software[ii] designations. Certified software designations provide an opportunity to better connect with customers and to unlock additional benefits from Microsoft.  

By becoming a Solutions Partner with certified software, partners can differentiate their solution, increase their discoverability in the Microsoft Commercial Marketplace, connect with more customers, and take advantage of marketing and branding resources designed to help accelerate revenue growth in a rapidly expanding market.  

There are two pathways to become a Solutions Partner with certified software: solution areas and Industry AI 

  • Solution areas. To become a Solutions Partner[i] with certified[ii] software for solution areas, a partner’s software must meet readiness and technical requirements and demonstrate a track record of customer success. Solution area designations include Azure, Business Applications, Modern Work and Security.  
  • Industry AI. To become a Solutions Partner with certified software for Industry AI, in addition to the requirements above, a partner’s solution must also meet an industry-specific challenge aligned with the Microsoft Industry Cloud scenarios and include a Microsoft AI capability. Currently, partners can attain the following certified software designations for Industry AI: Healthcare AI, Retail AI, Financial Services AI, Manufacturing AI and Sustainability AI.  

More than 75 partners with solutions across all five industries and from around the world have participated in the public preview of the designation, including Netherlands, Iceland, Germany, United Kingdom, France, Norway, Ireland, India, Canada and the United States. There are 49 solutions currently certified with an additional 27 in progress.

New Training Services Solutions Partner designations 

We are also releasing new designations for partners who provide training services. Starting April 10, partners who qualify for Solutions Partner for Training Services designations will be able to complete enrollment.  

Qualified partners will receive designation-specific badges distinguishing their services from other partner types within the Microsoft AI Cloud Partner Program. These badges greatly enhance customer discoverability, making it easier for them to identify partners with unique expertise and a proven track record of delivery quality training. 

New Small and Medium Business (SMB) paths for Azure and Security Solutions Partner designations 

Based on partner feedback, we are investing in our small- and mid-sized business ecosystem and creating a pathway for partners who focus on delivering solutions for SMB customers across Azure Data & AI, Digital & App Innovation, Infrastructure and Security.  Later this year, we will introduce dedicated SMB paths for Solutions Partner designations for Azure​ and Security, adding to our existing SMB paths for Business Applications and Modern Work. 

For partners who serve smaller businesses, this creates an exciting new opportunity — a new way to qualify for existing Solutions Partner designations, giving more partners access to the products, go-to-market resources, support, and advisory benefits that come with these designations. The new SMB paths will differentiate partners who can meet customer needs and drive customer success by validating those partners’ capabilities in our Azure and Security solution areas.  

Additional details for the SMB paths for Azure and Security will be available in the coming weeks. 

An update on the Support Services Solutions Partner designation  

Today we are announcing that partners with a Solutions Partner for Support Services designation will soon receive exclusive new benefits, including paid support agreement pricing and access to a knowledge-based library of curated materials designed to help partners resolve incidents quickly and efficiently, in addition to customer-facing badging. General availability and more details will come later this year.

Equipping partners through AI skilling  

Rapid innovation with AI technology has created an increased demand for partner skilling for both pre-sales and technical roles. Responding to partner feedback, we have launched a breadth of Microsoft AI-focused skilling workshops, boot camps and training events. Since July 2023, more than 350,000 partner personnel have also become skilled pre-sales and technical depth learners for Microsoft AI, Copilot and Fabric. 

Microsoft AI partner training roadshow 

In March, we launched an in-person training series called the Microsoft AI Partner Training Roadshow to target six cities globally through June, across India, the Bay Area, Germany, Japan and Brazil. Our inaugural event in India had 1,500 attendees from 40 partner organizations with 96 percent of participants agreeing that the event was valuable and 94 percent indicating they gained new skills to be successful in their roles. The roadshow is focused on in-person training on AI, targeting 270 partner organizations, and includes a keynote session highlighting the unique value of Microsoft AI, Fabric and Copilot for Microsoft 365, followed by a sales excellence and technical excellence tracks. 

Copilot for Security upcoming release and partner skilling 

To support our partners and customers in securing their businesses, we are excited to announce the general availability of Microsoft Copilot for Security in all commerce channels, including Cloud Solution Provider (CSP) channel, on April 1, 2024. We initiated an active Copilot for Security partner community at Inspire last year, which has since grown to more than 1,000 participants. Over the past six months, Microsoft has engaged with more than 100 Managed Security Service Providers (MSSP) and Independent Software Vendors (ISVs) in a Copilot for Security Partner private preview. Upcoming security skilling events include:  

  • Microsoft Copilot for Security Partner Boot Camp Helps participants understand how Microsoft Copilot for Security enables security analysts to move at the speed and scale of AI by augmenting the human experience. Starting April 16. 
  • Threat Protection and Incident Response with Microsoft Sentinel Workshop Participants will learn how to deploy and connect this SIEM and SOAR solution to different data sources and   use intelligent security analytics and threat intelligence capabilities for attack detection, threat vulnerability, proactive hunting and threat response. April 22-25. 

New AI skilling for sales/pre-sales and technical depth  

  • Azure OpenAI Workshop – Designed to help participants deepen their understanding of Azure OpenAI Services, this is tailored for developers and data scientists aiming to do more with less. Starting April 16. 
  • Microsoft Fabric Workshop – Participants will learn more about this comprehensive suite of services, including data lake, data engineering and data integration, all in one place. And learn how to implement this easy-to-use product that is designed to simplify analytics needs of enterprises. Starting April 8. 
  • Copilot for Microsoft 365 Pre-Sales, Deployment and Adoption Bootcamp Participants will explore how Copilot for Microsoft 365 provides real-time intelligent assistance, enabling users to enhance their creativity, productivity, and skills. Starting March 26. 

New Partner Benefits 

On Jan. 22, Microsoft launched three new benefits packages: Partner Launch Benefits, Partner Success Core Benefits and Partner Success Expanded Benefits. Purpose-built to meet the varied needs of partners at different stages of growth and help partners scale their business through a portfolio of key Microsoft benefits, the packages are available for purchase at a significant discount for partners 

These refreshed benefits follow partners through every element of the partner journey: from creating their solutions, to go-to-market, to differentiating their organizations in the marketplace. Beyond the three new packages, partners can continue to pursue Solutions Partner designations and specializations to differentiate their organizations in the Microsoft  Commercial Marketplace and access additional product and support benefits. Partners who develop software IP can also tap into ISV Success, a collection of resources that help accelerate software solution development and amplify sales.  

The feedback on the new packages has been incredibly positive, and we continue to listen to partner feedback and explore new ways to invest in our partners.  

Update on Copilot for Cloud Solution Providers  

On Jan. 16, Copilot for Microsoft 365 became generally available across all sales channels, including through our Cloud Solution Providers. General availability of Copilot for M365 opened a wealth of immediate opportunities for partners to deliver end-to-end services to help customers achieve a smooth transition into an AI-powered organization.  

One Microsoft distribution partner, TD SYNNEX, has already engaged more than 2,000 partners in its enablement journey for Copilot for Microsoft 365, demonstrating the industry’s eagerness to harness the potential of generative AI. With more than 500 individuals certified in the program, TD SYNNEX provides its partners with the technical and operational expertise, solutions and resources to help partners leverage Copilot’s capabilities and gain a competitive edge. 

From vision to reality: partners are delivering AI solutions around the world 

We are committed to building AI capabilities across the Microsoft cloud, guided by our Responsible AI principles. Our partners enable us to scale and deliver those technologies to every organization and every person on the planet. We anticipated some remarkable innovation in this area, and in just over a year we have been amazed by the results and impact partners are achieving around the world. 

Here are some of the ways Microsoft partners are developing differentiated solutions and helping customers transform their business processes across industries.  

Accenture, together with Avanade, is working with Amadeus to develop a generative AI-powered interactive assistant using Microsoft technologies, including GPT models from Azure Open AI Service, Microsoft 365 and Teams, to allow corporate travelers to orchestrate complex travel-related tasks using only natural language.  

Anthology Inc is providing AI-powered innovation for higher education through its student success and lifecycle engagement solution that is built on Microsoft Dynamics 365. 

The Atlassian product suite — including Confluence, Trello, Jira and Atlas — improves productivity and collaboration. As part of the Microsoft Copilot Early Access Program, Atlassian enhanced its apps to empower users to track tasks, resolve issues and manage projects seamlessly.  

Companies use Blue Yonder for end-to-end supply chain management. Blue Yonder, built on Azure, uses AI and ML to provide real-time decision-making power and workflows that help businesses fulfill orders and respond quickly to shifting market conditions.  

CallMiner’s AI-driven platform empowers organizations to ingest and analyze every conversation that happens in the contact center and beyond to uncover insights, act, and drive transformational change.  

Datadog integrates with all major Azure services, including Azure OpenAI Service. Now customers can better optimize costs, troubleshoot issues and monitor the performance of their AI-powered applications.  

EY worked with Microsoft to create a generative AI chatbot to answer payroll questions from employees across the 159 countries and 49 languages that EY clients encompass.  

Icertis Contract Intelligence Copilots are providing customers with assistive and generative natural language capabilities that cut through legalese and turn contracts into interactive assets that deliver insights and automation to drive businesses forward.   

Intapp is enabling thousands of financial and professional services firms to harness the intelligence of their professionals through AI-powered software solutions.  

LTI Mindtree is leveraging generative AI, powered by GitHub Copilot and Azure OpenAI Service, to accelerate the migration of legacy apps from on-premises to the cloud. Their methodology automates the creation of new cloud architecture, code conversion and documentation generation, resulting in an average reduction of 46 percent in migration time.   

Sight Machine works with manufacturers to make their businesses stronger, more sustainable and more resilient. To better support manufacturers’ data accessibility needs, Sight Machine used Azure OpenAI Service to harness generative AI (GPT-4) and to develop Factory Copilot. 

Veeam Software, recently announced an extended, five-year strategic partnership with Microsoft to innovate new solutions for protecting customers by integrating Veeam’s product family and Microsoft Copilot and AI services. 

Looking ahead: unlimited opportunities for AI innovation 

We have seen tremendous progress as partners seize the moment and turn the promise of AI into a reality around the world. Today, we have moved from talking about AI to applying AI at scale in ways no one could have imagined just a few months ago. 

Microsoft is infusing AI across every layer of its tech stack, creating new ways to power organizations and industries, and unlocking new opportunities to deliver transformational value to customers.  

Key to making all this a reality are the capabilities, services, product innovation and depth of industry knowledge delivered by our partners. Microsoft’s mission is to empower every person and every organization on the planet to achieve more. Our partners enable us to deliver on that commitment, in every customer segment, every geography, every day.  


[i] “Solutions Partner” refers to a company that is a member of the Microsoft AI Cloud Partner Program and may offer software, services, and/or solutions to customers. Reference to “Solutions Partner” in any content, materials, resources, web properties, etc. and any associated designation should be not interpreted as an offer, endorsement, guarantee, proof of effectiveness or functionality, a commitment or any other type of representation or warranty on the part of Microsoft. All decisions pertaining to and related to your business needs including but not limited to strategies, solutions, partner selection, implementation, etc. rest solely with your business.   

[ii] A certification is (A) specific to the solution’s interoperability with Microsoft products and (B) based on self-attestation by the solution owner. Solutions are only certified as of the date the solution is reviewed. Solution functionality and capability are controlled by the solution owner and may be subject to change. The inclusion of a solution in marketplace and any such designations should not be interpreted as an offer, endorsement, guarantee, proof of effectiveness or functionality, a commitment or any other type of representation or warranty on the part of Microsoft. All decisions pertaining and related to your business needs including but not limited to strategies, solutions, partner selection, implementation, etc. rest solely with your business. 

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Source: The Official Microsoft Blog

Mustafa Suleyman, DeepMind and Inflection Co-founder, joins Microsoft to lead Copilot

Satya Nadella, Chief Executive Officer, shared the below communication today with Microsoft employees.

I want to share an exciting and important organizational update today. We are in Year 2 of the AI platform shift and must ensure we have the capability and capacity to boldly innovate.

There is no franchise value in our industry and the work and product innovation we drive at this moment will define the next decade and beyond. Let us use this opportunity to build world-class AI products, like Copilot, that are loved by end-users! This is about science, engineering, product, and design coming together and embracing a learning mindset to push our innovation culture and product building process forward in fundamental ways.

In that context, I’m very excited to announce that Mustafa Suleyman and Karén Simonyan are joining Microsoft to form a new organization called Microsoft AI, focused on advancing Copilot and our other consumer AI products and research.

Mustafa will be EVP and CEO, Microsoft AI, and joins the senior leadership team (SLT), reporting to me. Karén is joining this group as Chief Scientist, reporting to Mustafa. I’ve known Mustafa for several years and have greatly admired him as a founder of both DeepMind and Inflection, and as a visionary, product maker, and builder of pioneering teams that go after bold missions.

Karén, a Co-founder and Chief Scientist of Inflection, is a renowned AI researcher and thought leader, who has led the development of some of the biggest AI breakthroughs over the past decade including AlphaZero.

Several members of the Inflection team have chosen to join Mustafa and Karén at Microsoft. They include some of the most accomplished AI engineers, researchers, and builders in the world. They have designed, led, launched, and co-authored many of the most important contributions in advancing AI over the last five years. I am excited for them to contribute their knowledge, talent, and expertise to our consumer AI research and product making.

At our core, we have always been a platform and partner-led company, and we’ll continue to bring that sensibility to all we do. Our AI innovation continues to build on our most strategic and important partnership with OpenAI. We will continue to build AI infrastructure inclusive of custom systems and silicon work in support of OpenAI’s foundation model roadmap, and also innovate and build products on top of their foundation models. And today’s announcement further reinforces our partnership construct and principles.

As part of this transition, Mikhail Parakhin and his entire team, including Copilot, Bing, and Edge; and Misha Bilenko and the GenAI team will move to report to Mustafa. These teams are at the vanguard of innovation at Microsoft, bringing a new entrant energy and ethos, to a changing consumer product landscape driven by the AI platform shift. These organizational changes will help us double down on this innovation.

Kevin Scott continues as CTO and EVP of AI, responsible for all-up AI strategy, including all system architecture decisions, partnerships, and cross-company orchestration. Kevin was the first person I leaned on to help us manage our transformation to an AI-first company and I’ll continue to lean on him to ensure that our AI strategy and initiatives are coherent across the breadth of Microsoft.

Rajesh Jha continues as EVP of Experiences & Devices and I’m grateful for his leadership as he continues to build out Copilot for Microsoft 365, partnering closely with Mustafa and team.

There are no other changes to the senior leadership team or other organizations.

We have been operating with speed and intensity and this infusion of new talent will enable us to accelerate our pace yet again.

We have a real shot to build technology that was once thought impossible and that lives up to our mission to ensure the benefits of AI reach every person and organization on the planet, safely and responsibly. I’m looking forward to doing so with you.


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Source: The Official Microsoft Blog