Microsoft Chief Commercial Officer Judson Althoff is teaching the company’s sales team new ways to compete with rival OpenAI products. As artificial intelligence (AI) reshapes the enterprise software industry, Althoff is showing the software giant’s salespeople how to position the company’s AI agent tools against OpenAI’s competing product. In an email, Althoff provided talking points for staff to use when selling Microsoft’s AI agent management tools over OpenAI’s new Frontier product. This product, developed by the Microsoft-backed AI startup, helps businesses automate office tasks across multiple software apps, including Microsoft’s. A report by The Information cited two of the company’s employees who received Althoff’s message to make this claim.The internal guidance reflects how rapidly AI announcements are affecting the enterprise software sector. In recent weeks, public market investors have sold off software stocks on concerns that AI agents from companies like Anthropic and OpenAI will reduce the value of traditional enterprise software applications and slow their growth.

What Microsoft Chief Commercial Officer Judson Althoff said about OpenAI in the email

In his latest email to employees (as seen by The Information), Althoff said OpenAI is a competitor that deserves respect. Still, he urged sales teams to stay the course and keep in mind Microsoft’s advantages as it competes with the startup, a current employee said.One of these advantages, Althoff said, is that Microsoft is a “platform” company that offers a wide range of AI models and has established relationships with enterprise customers. Meanwhile, OpenAI is an AI developer that has yet to demonstrate it can be a platform company, particularly since it has no infrastructure of its own, Althoff noted in the email. It’s important to note that OpenAI relies on cloud providers such as Microsoft to run its technology and business.Althoff emphasised that Microsoft’s Azure cloud server business, which also powers OpenAI’s technology, already offers access to a wide range of models, making Microsoft a more logical destination for directing multiple AI agents, the report cited people as saying. Microsoft offers OpenAI’s models, as well as those from other providers such as Anthropic, Mistral, and xAI.Althoff also said Microsoft has experience working with large enterprises with complex security and compliance needs, which positioned it well to win business, the people said.OpenAI’s Frontier release came several weeks after its archrival Anthropic released Cowork. This product also aims to automate workplace tasks by taking over a user’s computer to perform work on their desktop like a human would.Microsoft leaders almost immediately discussed how Cowork compared with Microsoft’s AI products, such as 365 Copilot, which uses models from Anthropic and OpenAI to automate tasks in its flagship Office 365 and Outlook software, and how Microsoft could compete with Anthropic’s product.Microsoft CEO Satya Nadella has previously said the company’s strategy is to develop “application scaffolding”, which is software that helps customers use AI models to automate tasks across apps and data. He argued that AI models themselves could become “commoditised,“ meaning value would flow to firms like Microsoft that provide customers with valuable tools to connect models to apps and data.Earlier, Microsoft had found itself competing with OpenAI after investing $13 billion in the startup in exchange for the right to use OpenAI’s technology in its own products. As both companies sold similar AI products to businesses, Microsoft has repeatedly told salespeople to tell customers that Microsoft could provide more security and compliance guarantees than the younger startup.AI agents developed by firms such as OpenAI and Anthropic remain vulnerable to security issues, limited in capability, and prone to errors. Still, AI leaders, including Nvidia CEO Jensen Huang, increasingly envision a future in which AI agents use traditional enterprise apps to perform tasks currently handled by people. That could put Microsoft’s enterprise app business in a challenging position.Microsoft, a leading seller of enterprise apps, is trying to get ahead of AI upstarts like OpenAI by releasing its own products for workers to create and direct AI agents. Microsoft’s Agent 365 aims to help companies track multiple AI agents, including those from OpenAI, and connect them to other applications so they can reorganise files or generate forecasts based on data stored in those applications.Microsoft is also reportedly developing Windows-based AI agents that could perform tasks and use applications on a customer’s computer the way a human would. Microsoft is far from alone. Other enterprise software firms, such as ServiceNow, Salesforce, and Amazon, have recently launched products to help customers track and direct agents across a range of AI providers. Traditional enterprise firms are closely monitoring both OpenAI and Anthropic, from which many purchase AI models to power features in their enterprise apps.Using reinforcement learning, OpenAI and Anthropic have been training AI to use enterprise apps as a “digital coworker” alongside humans for the better part of a year. Now, they are trying to get such AI in the hands of businesses.OpenAI said a customer could use Frontier, which it announced recently, to create multiple “AI coworkers” and assign them different tasks that involve pulling in data from various apps: one AI agent could research potential sales leads. At the same time, another could use the agent’s findings to check them against existing customer accounts in the company’s sales database and send sales pitches to customers not already in the system.OpenAI didn’t specify which well-known enterprise apps its AI would use to perform these tasks. But it included a graphic in its blog post about Frontier, showing how OpenAI’s technology for directing these agents would sit on top of companies’ “systems of record”. That term refers to applications built by firms such as Microsoft and Salesforce that store corporate data that customers trust to be accurate.Some executives at traditional enterprise app companies said that they viewed the graphic as OpenAI’s way of signalling its considerable influence over how businesses use and pay for software and AI. To be sure, OpenAI isn’t arguing that the AI itself will work out of the box. It’s hiring AI specialists to work closely with customers to reorganise their IT systems and improve their existing software’s integration with AI. Anthropic also has employees who work with companies such as Cox Automotive to develop AI agents that power new products.