Microsoft Spends $2.5 Billion on Customer AI Deployments

Microsoft Spends $2.5 Billion on Customer AI Deployments

Microsoft will spend $2.5 billion on a new unit aimed at helping its customers implement artificial intelligence (AI).

The Microsoft Frontier Company, announced Thursday (July 2), will also embed 6,000 industry and engineering experts with the tech giant’s customers in what it calls a step above what is known as “forward deployed engineering” (FDE).

“The pace of AI adoption is moving incredibly fast. Customers have moved well beyond experimentation and understand the importance of adopting AI to transform their business,” Judson Althoff, CEO of Microsoft’s commercial business, said in explaining the initiative. “They are now concentrating on delivering measurable business outcomes and demonstrating a return on their AI investments, while ensuring their intelligence is amplified and their IP is protected.”

The news comes on the heels of an announcement from Amazon’s cloud division Amazon Web Services (AWS) earlier this week that it was investing $1 billion in an FDE initiative that will put thousands of engineers on-site with customers to develop AI solutions. This program is aimed at speeding the development of AI applications to a matter of days rather than months.

“At the center is the AI-Driven Development Lifecycle, a new approach to software development that combines AI-powered execution with human oversight and dynamic team collaboration that builds intelligence for a customer’s next project,” the company said.

AI labs OpenAI and Anthropic have also launched their own FDE groups, collaborating with private equity groups and banks to boost enterprise adoption.

In an interview with CNBC, Althoff said the FDE effort is the result of the company’s realization that “customers are in very different places right now, and trying to really figure out AI.”

“Do they snap to one model from OpenAI or one model from Anthropic, or a family of models?” Althoff said in the interview. “Do they take it from a technology first mindset? How do they look at their existing business processes and operations?”

Meanwhile, recent PYMNTS Intelligence research has found that workers in the U.S. are getting little to no training on how to use AI on the job.

The study, “Wage to Wallet™ Index – The Resilience Deficit: Labor Workers in an Automated Economy,” found that 48% of American workers in educated professional and higher-paying roles, typically salaried, “go to work each day and confront AI tools they’re not prepared to use effectively,” as PYMNTS wrote in May.

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