Microsoft adds the technology behind ChatGPT to its business software

Bing is only a small part of the overall search market – about 10% by some estimates. Its revenue at the end of June was just under $12 billion, a small part of Microsoft’s overall business. Microsoft 365 software is the company’s business cornerstone and the overall leader in the business-software marketplace.

Reinventing the company’s workplace products around generative AI is “a big deal,” Microsoft CEO Satya Nadella said in an interview. “You already have significant use of these assets. And so the question is, can we use AI to solve some of the customer challenges we see today?

Microsoft shares rose 4 percent on Thursday, while the Nasdaq composite index rose 2.5 percent.

The importance of that business may be informing how Bing and Microsoft 365 updates are released. The first was released as a product ad at a major media event and spread to a wider audience within weeks. Microsoft says it will take months to release its AI-powered office software suite.

Microsoft said it has started offering the technology to 20 customers, without naming the companies. It is not clear if and when it will cost more for the upgrade.

Because Bing search mostly pulls answers from the web, Microsoft’s workplace software has a wide variety of customers with diverse and complex needs. That’s why the company is taking a more measured approach with this release, Mr. Nadella said.

“What’s happening in Word is different than what’s happening in a group in Excel, and you want to make sure we get all these things right,” he said.

The main feature the company is releasing is what it calls Microsoft 365 Copilot. It is included in the Microsoft 365 suite, and allows users to generate documents, presentations and original texts with natural language resources.

A Word user can highlight a paragraph and AI can provide different options for the rewritten version. The company says the technology can create a PowerPoint presentation based on text from a document. For example, he might take an essay about the French Revolution and turn it into a presentation with several slides and images.

In Excel, a spreadsheet tool, Copilot can help non-Excel users analyze sales data, determine trends, and create charts.

Microsoft has also built an AI-powered tool called Business Chat that works across Microsoft 365 and can aggregate multiple emails, create transcripts from conversations on Microsoft Teams, and identify when a specific topic came up in a meeting.

Using natural language to perform these complex tasks “represents a new model of computer-human interaction,” said Jared Spataro, Microsoft’s corporate vice president of modern work and business applications.

Microsoft is using so-called large language models developed by OpenAI, including the AI ​​company’s latest technology update, GPT-4.

Recent months have seen tremendous growth in AI as tech giants and startups race to improve and test the technology and incorporate it into their products. On Tuesday, Google said that generative AI features will be rolled out in the workplace.

It allows users of Google Docs and Gmail to generate text and emails based on natural language queries. Google has blogged how one can create a task list based on a few commands.

Google and Microsoft are being cautious about how quickly and widely they roll out these products. Microsoft hasn’t announced a date for the general release of Microsoft 365 Copilot, and Google says it’s still testing the features with a small set of users.

Part of the skepticism may be that large language models used by AI can produce wrong answers. Sometimes they tend to think of answers to questions—that is, the software provides the answer and renders it correct.

It was a problem that marred the rollout of AI-infused Bing, with many users reporting incorrect responses and a strange interaction with the search engine and chat tool.

While Microsoft and its partner OpenAI say they’ve made improvements, they say the technology isn’t perfect. In Microsoft’s presentation to The Wall Street Journal, its business chat tool failed to summarize some of the questions asked during the meeting. Then, in a point-by-point summary of the interview, the software mischaracterized the Microsoft executive’s comments as coming from a reporter.

People still need to verify the authenticity of the content these devices put out, Mr. Nadella said, which is why the company calls it Copilot. It helps workers, not replaces them.

“Just like the first time a mouse is introduced and we have to learn to click and right-click, maybe two years down the line, three years down the line, we’ll be very familiar with it and say, ‘Oh, yeah, I know I’m dealing with a co-pilot, not a co-pilot.’

Write to Tom Dotan at tom.dotan@wsj.com