Microsoft developing local AI agent to compete with open-source OpenClaw

Microsoft is developing an OpenClaw-like agent for Microsoft 365 Copilot that would target enterprise customers with enhanced security controls, the company confirmed to The Information.

The new agent aims to run continuously, executing multi-step tasks over extended periods. Microsoft has not confirmed whether the agent will run locally on user hardware like OpenClaw or adopt a hybrid approach.

How it differs from existing Microsoft agents

Microsoft has launched multiple AI agents in recent months:

Copilot Cowork (announced March 2026): Takes actions within Microsoft 365 apps, powered by Microsoft's "Work IQ" technology with Anthropic's Claude as an optional model. Runs in the cloud, not locally.

Copilot Tasks (preview launched February 2026): Designed for prosumer tasks including email organization and travel planning. Also cloud-based.

The new OpenClaw-style agent would be the first to potentially run locally, according to the company's description of it as "a version of 365 Copilot that is always working, able to take actions at any time."

OpenClaw's enterprise appeal

OpenClaw is an open-source tool that runs locally and creates agents to perform tasks autonomously. While it works on Windows, Mac Mini has become the preferred platform for OpenClaw users, driving unexpected sales growth for Apple's compact desktop.

The open-source project supports multiple models but Claude remains the most popular choice among users. Microsoft added Claude as an option for Cowork after partnering with Anthropic in late 2025.

Microsoft's enterprise-focused version would emphasize security controls that the open-source OpenClaw lacks, addressing a key concern for corporate deployments.

Expected announcement

Microsoft is expected to demonstrate the new agent or an upgraded version of existing tools at its Build conference in June 2026, according to The Verge.

Microsoft has not responded to requests for comment on how the new agent fits within its existing Copilot product lineup.

What this means

Microsoft is hedging its bets on AI agent architectures by pursuing both cloud-based and potentially local execution models. The focus on enterprise security and always-on operation suggests Microsoft sees a market gap between consumer-focused open-source tools and IT-approved business software. The proliferation of overlapping Copilot agents—Cowork, Tasks, and now this unnamed OpenClaw competitor—indicates the company is still determining which approach resonates with customers.