Two years ago, Microsoft touted AI as a "generational shift" in technology it aimed to lead. Now, the company is consolidating its Copilot-branded consumer and business applications while scrapping several underperforming AI features. As first reported by GeekWire and outlined in Microsoft's support documents, the tech giant will merge the capabilities of its consumer-facing Copilot app with the more enterprise-focused Microsoft 365 Copilot app. This move acknowledges both that personal and professional AI usage often overlaps, and that Microsoft's earlier approach was too fragmented for Copilot to seriously rival ChatGPT, Claude, or Gemini.

The shift also mirrors a wider trend of consolidation in the AI app space. Claude has folded Cowork into Chat, OpenAI has integrated its agentic tool Operator into ChatGPT, and Google has added specialized functions to Gemini, such as combining deep research with web browsing. For consumers, Microsoft will remove access to Group Chats, AI-generated podcasts in Copilot, Copilot Labs experimental features, and Deep Research by August 18, 2026. Paying professional users, however, will see Researcher step in as a substitute for at least the deep research capability.

Additionally, Microsoft is retiring Mico, the whimsical animated character for Copilot—a floating blob that felt like an AI-era Clippy. The company warns that some features may temporarily vanish during the transition, and files created in the standalone Copilot app will be migrated to OneDrive. While Microsoft frames this as an effort to deliver a "simpler, more cohesive experience," it also signals that Copilot has struggled to find its footing. In July, The Information reported that Jacob Andreou, Microsoft's EVP overseeing Copilot, wrote in an internal memo that the app needed to earn "the right to exist" in users' lives, which meant letting go of features that weren't working.