Copilot Gets Brains: Microsoft Unveils ‘Work IQ’ & Agent Mode Integration with GPT-5 and Anthropic

At Microsoft’s Ignite 2025 developer conference, the focus was on empowering the AI lifecycle, with Microsoft unveiling the Work IQ intelligence layer and Agent Mode for Microsoft 365 Copilot, alongside integration with GPT-5, Sora 2 and Anthropic models.

The updates extend to Office apps, where Copilot Agent Mode will bring Anthropic or OpenAI reasoning models to Excel, while Word and PowerPoint agents assist in producing documents and presentations, and Outlook gains voice commands and quick actions with a preview version due in early 2026.

The new Microsoft Agent 365 platform is designed to monitor, manage and secure AI agents, integrating Defender, Entra and Purview through a registration hub, dashboards and security features to prevent agents becoming “shadow IT.” IDC forecasts enterprises will deploy more than 1.3 billion AI agents by 2028, and Microsoft responded with Microsoft 365 Copilot Business, priced at 21 USD per user per month and launching this December.

Sora 2 will be used in Create to generate marketing or social-media videos, and Microsoft also introduced Foundry IQ, Fabric IQ and Microsoft Agent Factory to help organisations build bespoke agents.