Microsoft lost its way in the AI race. Can Copilot get it back on course? | Fortune

Microsoft lost its way in the AI race. Can Copilot get it back on course? | Fortune

By Jeremy Kahn
Publication Date: 2026-05-21 07:00:00

Redmond, Washington, mid-January 2026. The weather, cold and gray. It’s the kind of morning the snooze button was built for. But the team of engineers camped out in Building 92 on Microsoft’s sprawling campus got here early. They are in a race. And they are behind.

The team is working on a new AI product, one that functions as a personal assistant, capable of doing everything from booking flights to responding to emails to finding a good local plumber. They know competing teams at other companies are working on similar products. As if they needed a reminder that a lot is riding on their work, Satya Nadella drops by. He wants to show them something.

The Microsoft CEO opens a laptop and fires up an application. It’s a kind of system for instructing and controlling multiple AI agents. He calls it “Chain of Debate.” As Nadella walks them through the demo, the engineers trade knowing looks, the sort regulars at the local basketball court exchange when they realize a…