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Microsoft’s Three Advantages in the AI App Race

Microsoft’s Three Advantages in the AI App Race



Microsoft recently announced an extension of its AI-powered app ecosystem, which includes expanding its Copilot applications and adopting the same standard for plugins as OpenAI introduced for ChatGPT. Developers can now build plugins that work across Bing Chat, Dynamics 365 Copilot, Microsoft 365 Copilot, the new Windows Copilot, and ChatGPT. However, industry experts suggest that this move by Microsoft will not only be challenging but could also face stiff resistance, especially on the enterprise side.

Microsoft’s Advantages

Whit Andrews, vice president, and distinguished analyst at Gartner Research highlighted three core advantages Microsoft has over its competitors:

First-Mover Advantage

OpenAI is Microsoft’s partner, giving it an extraordinary advantage. As such, the more it can establish familiarity and appeal, the more it can generate a defensible value.

Brand Strength

The intense value of the Microsoft brand requires it to move at a fast pace to achieve the best possible outcome. Without a moat, brand strength will be an important factor.

Developer Community

Microsoft attracts developers better than its competitors, and it has a massive developer community. Microsoft needs to capitalize on this community to grab market share and familiarity and be synonymous with access to easy artificial intelligence-powered functionality. 

Limits of Microsoft’s ‘All-Out Assault’

As well as supporters, there are also industry experts who express doubt about Microsoft’s ‘all-out assault.’ Matt Turck, a VC at FirstMark, praised Microsoft’s AI app ecosystem and plugin framework, calling it an ‘all-out assault’ to be top-of-mind for developers worldwide who want to build with AI. However, he also mentioned that it remains to be seen whether the world is ready to live in a Microsoft-dominated AI world and speculated that there will be stiff resistance, particularly on the enterprise side. 

Implementing Effective Controls and Safeguards

Experts point out that developing effective controls and safeguards will be even more challenging as the app ecosystem grows and regulation of AI becomes a top priority. Suresh Venkatasubramanian, a computer science professor at Brown University and former White House policy advisor, highlighted distribution of accountability between the third parties and the entity that provides the source LLM as the main concern. While he also sees an opportunity to establish more controls in the process, he doesn’t expect this to happen soon, reinforcing the importance of guardrails ‘at the point of impact’ where people are affected.


Microsoft can’t be faulted for trying to extend its AI-powered app ecosystem. Microsoft’s move demonstrates that they’re keen to remain ahead of the competition and preserve their brand value. It remains to be seen whether they’ll succeed, but the tech giant certainly has several advantages over their competitors and a massive developer community. As AI grows, regulating AI will become a top priority, and effective controls and safeguards will be more challenging to develop.


What is a plugin?

A plugin is software that supplements an already-existing program. It’s used to improve or enhance the functionality of the original program.

What is a moat?

A moat refers to a business’s ability to keep a competitive advantage over its rivals and protect its market share.

What is an LLM?

LLM means Language Model, and it refers to algorithms that can predict human responses in natural language systems (e.g., sales chatbots).


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