Microsoft's plan to retain its enterprise AI edge

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Welcome to Runtime! Today: Microsoft shores up its AI strategy heading into a pivotal year, Meta is getting into the AI SaaS business with the former leader of Salesforce's AI division, and the latest enterprise funding.

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As we approach the two-year anniversary of the arrival of OpenAI's ChatGPT, Microsoft's enterprise AI strategy has shifted since that pivotal launch. In late 2022 it was getting ready to define a new era of tech investment under its own terms, but at this point, the rest of the industry has caught up.

Microsoft unveiled dozens of new features and services Tuesday at Microsoft Ignite, dropping its customary Book of News online for those who didn't make it out to Chicago. This week's updates show how Microsoft's generative AI-pitch has evolved from CIOs to developers, and how agentic AI has leveled the playing field.

Companies that need Microsoft's help building (or justifying) generative-AI apps have a new tool at their disposal: Azure AI Foundry.

Customers will be able to choose from among "25 prebuilt app templates" inside Foundry, which will provide "a unified toolchain for designing, customizing and managing AI apps and agents with enterprise-grade control and customization," Microsoft said in a blog post.
It replaces Azure AI Studio, which was a dashboard where developers could select AI models and then build and deploy apps, with a new look and feel.
Foundry will allow users to more easily switch between different AI models, which has been a notable change in Microsoft's thinking about model choice as its relationship with OpenAI has cooled and other model providers have stepped up their game.
"What developers are often finding is that each new model — even if it’s in the same family of models — has benefits in terms of better answers or better performance on many things, but you might have regressions on other things," Microsoft's Scott Guthrie told Bloomberg.

Azure AI Foundry will also allow users to create AI agents alongside their other generative AI apps, checking off the autumn 2024 requirement that every enterprise AI announcement must have an agentic AI component. Microsoft started talking about the convergence of its Copilots and AI agents back at its Build event in May, but the company now offers several different ways to create agents through different services.

In addition to Azure AI Foundry, developers can also now use Copilot Studio to add agentic qualities to their applications or select from several templates.
Microsoft plans to offer a session this week called "Better together: Copilot Studio and Azure AI," where attendees can learn "how Microsoft is improving both products to make it easier to build with both."
Figuring out the best option appears to revolve around where the agent will be used, such as in a customer's Microsoft 365 environment, on their website, or as part of an internal application running in Azure.
But it's a little confusing, and looks a lot like a struggle between the Copilot and Azure brands for top billing among Microsoft's enterprise AI developer tools.

After its multiyear, multibillion-dollar effort to reinvent the company around generative AI, Microsoft, its customers, and its investors will spend the first half of next year looking for signs that enterprise AI adoption is starting to accelerate. But Microsoft made sure to address the other issue that dogged the company this year — security — in front of the customers it needs to keep on board to reach that goal.

Windows will soon come with a better system for remotely recovering machines that have crashed, according to The Verge, which was one of the biggest obstacles that delayed the response to CrowdStrike's mistake.
Microsoft made Microsoft Security Exposure Management, a dashboard that gives security professionals a better picture of threats and weaknesses, generally available.
And it launched an expanded bug bounty program that will double the reward for finding high-impact vulnerabilities in certain parts of Microsoft's AI stack for the next two months, as well as increased bonuses for finding flaws in other enterprise services such as its Entra identity-management service and Dynamics 365.

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Llama as a service

Meta has danced around the enterprise market several times in its history, but the generative AI gold rush appears to have spurred it into action. The company announced Tuesday that it has hired former Salesforce AI CEO Clara Shih to lead a new "Business AI group."

The division will "make cutting-edge AI accessible to every business, empowering all to find success and own their future in the AI era," according to a LinkedIn post from Shih. Meta/Facebook has worked closely with the AI developer community for years, contributing widely used technology such as PyTorch, but this group will be charged with breaking into the ever-exciting world of B2B SaaS.

The company offers AI tools to its advertisers, according to Axios, and wants to expand that effort to businesses in general. The exact product direction of this group isn't clear at the moment, but it's entering a crowded market full of huge companies with long-standing customer relationships.

Enterprise funding

Zip raised $190 million in Series D funding, valuing the procurement software company at $2.2 billion.

Kong scored $175 million in Series E funding to improve and expand its API management software.

Enfabrica landed $115 million in Series C funding and announced that its new networking chip for data-center customers will ship in the first quarter of next year.

Spectro Cloud raised $75 million in Series C funding as it expands its Kubernetes management platform into edge computing.

Neo4j secured $50 million in new funding and announced that it has reached $200 million in annualized recurring revenue for its graph databases.

SuperAnnotate raised $36 million in Series B funding to help customers build and manage multimodal datasets for AI applications.

The Runtime roundup

ServiceTitan announced plans to go public and said revenue from the home-improvement contractors who use its software to manage their businesses grew 24% during its most recent quarter.

CISA Director Jen Easterley will step down from her position on Inauguration Day 2025 after serving as the public face of the Biden administration's efforts to improve enterprise security, according to NextGov.

Supermicro hired a new auditor and submitted a compliance plan with the SEC after delaying its official earnings reports amid allegations of accounting shenanigans.

Salesforce will keep its annual Dreamforce spectacle in downtown San Francisco through 2027, according to San Francisco Business Times, which will make some people very happy and some people very mad.