Artificial intelligence has rapidly started finding its place in the workplace, but this year will be remembered as the moment when companies pushed past simply experimenting with AI and started building around it, Microsoft said in a blog post accompanying its annual Work Trend Index report.
As part of this shift, Microsoft is dubbing 2025 the year of the “Frontier Firm.”
“Like the digital native companies of a generation ago, they understand the power of pairing irreplaceable human insight with AI and agents to unlock outsized value,” Jared Spataro, CMO of AI at Work at Microsoft, said in the post.
These so-called Frontier Firms will be built around “on-demand intelligence and powered by ‘hybrid’ teams of humans + agents, these companies scale rapidly, operate with agility, and generate value faster,” according to the report. Microsoft argued that within the next two to five years, every company will be on the journey to becoming one.
Microsoft said that 82% of leaders responded that this is a “pivotal” year to rethink key strategy and operations, while 81% said they expect agents to be “moderately or extensively” integrated into their AI strategies in the next 12 to 18 months.
The results are a culmination of survey data from 31,000 workers across 31 countries, LinkedIn hiring and labor market trends, trillions of Microsoft 365 productivity signals, and conversations with experts, and AI-native startups.
Microsoft expects the transition to the Frontier Firm to play out in three phases. The first, it said, is that AI will act as an assistant to streamline work tasks. Second is the addition of AI agents as “digital colleagues,” which can take on specific tasks. The third step calls for a lot more freedom: it’s when humans set direction for agents that run entire business processes and workflows, with the human checking in as needed.
It gives the example of a supply chain role. Agents can handle end-to-end logistics, while humans can guide the agents, resolve exceptions, and manage supplier relationships.
AI agents are still in the early days, but companies are placing big bets that agentic AI represents the next major frontier and are rapidly innovating. OpenAI recently released “Operator,” a tool that automates web-based tasks, along with Deep Research, which it says can gather information from across the web and summarize it into digestible reports. Amazon launched a model designed to take over a user’s web browser and perform simple tasks. Anthropic, the creator of Claude, and Google have also introduced AI agents.
“This shift is multifaceted—every industry and role will evolve differently as the technology diffuses across business and society,” the report said. “Just as the internet era created billions of new knowledge jobs—from social media managers to UX designers—the AI era is already giving rise to new roles, with many more to come.”
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