Microsoft $MSFT (MSFT) is looking to change the AI landscape. At the company’s annual Build 2025 conference this week, the company “jumped in with both feet to the vision of an agentic [AI] future,” Deutsche Bank (DB) analysts said in a new research note.
Agentic AI is widely considered the next hotspot in the AI arms race. While generative AI focuses on creating content based on input, AI agents are designed to act. Agentic AI doesn’t just respond to prompts — it takes initiative, works toward goals, and tackles complex tasks for users.
While there wasn’t a “landmark announcement” about agentic AI, the investment bank’s analysts said Friday that the overarching message from the Build conference was that Microsoft is moving — fast — to equip developers with the tools to turn agentic AI into reality.
A March 2025 report from Market.us said the agentic AI market is experiencing rapid growth, with projections indicating an increase from approximately $5.2 billion in 2024 to around $196.6 billion by 2034. And Microsoft wants to be the big name that corners the market.
The tech giant has strategically positioned itself to play a major role in agentic AI, driven by its big investments in AI infrastructure. These moves, if everything goes according to Microsoft’s plan, mark a significant moment in the company’s strategy to dominate the next front in the AI wars — a vision that is “clear and resonates,” Deutsche Bank analysts said.
At the conference, Microsoft introduced sweeping updates to Azure AI Foundry and Copilot Studio — which could be integrated across Microsoft’s cloud and enterprise ecosystem and would enable “agentic AI across the Microsoft product portfolio,” the analysts said.
Deutsche Bank said the announcements are working to give “developers the tools they need to actually bring agentic applications to reality.” But there needs to be a lot of work “done in the trenches” using tools such as the ones announced — combined with AI “that is becoming more reliable alongside declining unit costs” — for that to happen.
The analysts noted that Microsoft CEO Satya Nadella, in his keynote address at the conference, talked about how the AI industry is entering the middle innings of the AI platform shift — a phase focused on scaling AI platforms meaningfully. This includes building out an agentic AI web, which, Deutsche Bank said, “will drive a shift from a smaller number of vertically integrated apps to more of a platform approach to achieving outcomes.”
“Microsoft is clearly trying to assert itself as a leader here, with horizontal solutions across multiple layers in a way only it arguably can given the breadth of its offerings and user base,” the Deutsche Bank analysts wrote. “With significant levels of investment and broad experimentation ongoing we are confident use cases will materialize even if it requires more patience in the near term and believe Microsoft remains among the best-positioned to reap some of the benefits.”