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When Cowork and Copilot collide, who comes out on top? An alliance was struck this week that will see Anthropic’s general-purpose AI agent Cowork integrated into Microsoft’s AI assistant Copilot.

That marks a détente between two companies that have increasingly looked on course for a competitive clash over the use of AI within companies. But the tussle between the two remains, and the outcome will determine who emerges the victor as AI invades software.

Copilot has had an underwhelming run since it was added to Microsoft’s suite of Office apps in 2023. The software company recently revealed user numbers for the first time, with only 15mn paid seats, or about 3 per cent of Office users.

Enter Cowork, whose debut earlier this year shook software stocks. Two months in, it has become the poster child for AI agents, the software tools that take on work tasks for you. You could use it to do things like clean up a busy calendar, or organise and share background information ahead of a meeting.

If you are a user of Office software (now rebranded as Microsoft 365), these might sound like the kinds of things Microsoft’s Copilot should do for you. The fact that it doesn’t, and that Microsoft has had to turn to Anthropic, is revealing. If agents become a new interface through which workers use software to get things done (don’t bother opening an app, just ask your computer to do the work) then this becomes the high ground that everyone will want to occupy.

The convergence of Copilot and Cowork speaks volumes about Microsoft’s urgent need for a leg up for its AI capabilities, as well as its view of where competitive advantage will lie as the technology invades software.

By inviting Cowork into a work environment shaped by Microsoft, the software giant gets to set the terms. As a standalone app, the Anthropic service can only work at a device level: workers have to give it individual permissions to access all the applications and services they use.

Integrated into Copilot, on the other hand, the agent can operate in the cloud, with full access to all the data and context about a company that Microsoft already possesses. That not only makes it potentially far more useful but ensures it is operating with the governance and security already in place for other software.

Anthropic, for its part, could see a new jolt of growth. Its coding agent, Claude Code, has already fuelled a stunning jump in the company’s annualised recurring revenue (what annual revenue would be based on its current level of subscription income), from $9bn in December to $19bn in March. Microsoft’s massive base of users could help propel it into the mainstream of white-collar work.

It is unclear how long the mutual self-interest that brought Microsoft and Anthropic together will last. For workers whose companies run largely on Microsoft software, Cowork will have a clear subsidiary position. But for anyone else, an agent that can only work inside a subset of your apps is of limited value. As Copilot and Cowork increasingly compete to provide agents that act as the front end to work, the relationship between the two companies is likely to become strained.

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If Cowork is widely adopted, meanwhile, it could start to become a new intelligent platform for white-collar work. Anthropic has already added specialised tasks in the form of “plug-ins”. If other companies look to develop extra features on top of its capabilities, it would assume the sort of platform power that Microsoft itself has long enjoyed.

This early in the era of agent-first software, it is hard to predict how this will evolve. Anthropic and its AI peers have an urgent need for revenue to fund their massive infrastructure investments, giving them a powerful incentive to invade more parts of the software world occupied by other companies. It may well be content, as its executives say, to stay out of the highly specialised workflows that are key to many businesses, leaving that work to other software companies. But there are many “horizontal” work apps that are widely used by people in all kinds of companies and that present a more obvious target.

For an example of a company that used its platform advantage to dominate a wider swath of software, it need look no further than Microsoft itself. The software giant incinerated a generation of application software companies when it put together a package of the most widely used workplace software in Office.

richard.waters@ft.com