India played a “very large, very significant” role in bringing agentic artificial intelligence (AI) capabilities to Windows, Microsoft’s 40-year-old operating system, underscoring the country’s growing importance to the technology giant both as an engineering hub and a future growth market.
One of Microsoft’s largest R&D hubs with over 22,000 employees, India contributed to much of the engineering work behind the latest AI features for developers in Windows, according to Pavan Davuluri, executive vice-president and chief of Microsoft Windows and devices.
“It’s difficult for me to pinpoint one feature that was built in India, because we’re a globally distributed workforce that collaborates across teams on almost every front. That said, India today is one of Microsoft’s largest presences globally outside of the US, and it contributes across cutting-edge engineering work including much of the features integrating agentic AI for developers in Windows,” Davuluri told Mint.
The comments come as Microsoft pushes deeper into integrating AI across Windows, a strategy that Davuluri has championed since taking charge of the operating system after long-standing Windows and devices chief Panos Panay left Microsoft in September 2023 to join Amazon.
On Tuesday, Davuluri and his team delivered what analysts hailed as the most significant upgrades to both Windows and Microsoft’s Surface lineup of laptops in at least five years.
The top executive, however, defended his stance on the influx of AI in Windows, despite facing widespread backlash when he had first shared his vision of Windows as an “agentic OS” last November.
“There is only one configuration of Windows that we’ll deliver to customers. But, what’s deeply important is that a platform by definition has to account for a wide breadth of use cases. This includes customers who expect privacy, data compliance, and transparent software updates for corporate infrastructure at one end, and developers and users on the frontier who might want to experience all of AI before others. Our general principles of how we build Windows is to let users, or IT staff in cases of enterprises, control how much AI they would want in their version of Windows,” Davuluri added.
On Tuesday, Microsoft chief Satya Nadella spent over an hour talking about AI features for developers brought into Windows, including performance refinements and support of cross-platform compatibility with Linux and Apple’s Mac operating systems. The latter was one key point that Davuluri’s early pitch for Windows as an agentic OS had faced backlash for in November.
“We want to give users more fine-grained control over how they want their Windows to be. We’ve built these factors into our latest version of Windows, which should cater to users across the spectrum,” he said in his keynote.
Most industry analysts said Microsoft’s announcements were largely in line with expectations, albeit on a slightly less aggressive note than key rivals Anthropic, Google and OpenAI.
“The changes to Windows were a long time coming, and you’d expect Microsoft to make changes where it matters because Windows is a focal entry point for developers building AI applications. How these changes are accepted by the industry remain to be seen,” said Jim Mercer, programme vice-president for developer operations at tech consultancy firm IDC.
The Microsoft stock, however, has not yet reflected developer confidence in the company’s announcements. Since Nadella’s keynote, Microsoft’s shares have declined 4.3% over two days.
Growth bet
India is also set to remain a “priority market” for Microsoft despite contributing just over 1% of the company’s global revenue, with the country’s vast base of small businesses representing a largely untapped opportunity, Davuluri said.
“We work closely with our cutting-edge security and M-Dash teams at Microsoft to integrate the best cyber security features into Windows by default. Of course, the presence of a large small and medium business base means that even in terms of retail operations, India already is, and stands the chance to be an even larger revenue generator in terms of sales to clients of all sizes. Our cutting-edge AI features, we believe, will help us amplify our push for the same,” he said.
Microsoft’s Windows runs on over 100 million devices in India, as part of its global user base of over 1.4 billion devices. India, however, has remained a small contributor to the company’s top line.
In FY25, Microsoft India generated ₹29,302.6 crore ($3.38 billion) in operating revenue, accounting for 1.2% of Microsoft’s $281.7 billion global revenue in the same period.
In the near term, Davuluri believes that could change. “We caught up significantly with India’s issue of not enforcing software updates and unofficial licensing when we doubled down on Windows 11. The latter helped us catch up a lot and help us defragment our Windows ecosystem. Hopefully, with AI coming in, we’ll further streamline Windows in India.”
The writer is in San Francisco on Microsoft’s invitation.