“AI continues to transform how we work; the rapid rate ofchange presents new challenges and exciting opportunitiesfor business leaders—especially chief information officers. As companies strive to harness AI, CIOs are in the middle ofthe action. And they’re under immense pressure to charttheir AI roadmaps, drive cross-functional innovation, andshape the future of their organizations. Whether you're just starting or looking to scale your efforts,this asset is your go-to resource to understand how toembark on your AI journey.” Jared SpataroChief Marketing Officer of AI at WorkMicrosoft SECTION ONEThe AI-ready organization SECTION TWOEnable all employees with AI SECTION THREEAI in action: from functionalworkflows to intelligent agents Generative AI is no longer an emerging technology. It is a defining force inbusiness transformation, reshaping how organizations operate, compete,and innovate. Companies that successfully integrate AI into their core strategiesare unlocking greater productivity, streamlined decision-making, andmeasurable growth. However, realizing AI’s full potential requires more than justadoption.The transformation demands a clear business case, change management, Agents serve as digital labor, amplifying your workforce, while driving growth andcost savings for your business. Microsoft 365 Copilot plays a key role in thisevolution, acting as the employees’ UI for AI, helping organizations integrate AI intotheir existing flow of work seamlessly and securely. AI adoption goes beyond technology deployment. It requires a cultural shift and acommitment to AI literacy. Through close partnership with customers, Microsoft hasobserved early adopters of AI gain a competitive advantage by increasing efficiency,fostering innovation, and building resilience. CIOs who take a proactive role inleading AI integration will define the future of work, ensuring their organizationsremain agile in an evolving business landscape. strong governance, and a strategic approach to implementation that only a CIOcan accomplish. Gartner predicts that by 2026, more than 80% of enterprises will haveused generative AI APIs or models, and/or deployed generative AI–enabledapplications in production environments, up from less than 5% in 20231.AI is no longer a promising trend—it is a competitive differentiator thatwill define the future of business. AI is transforming business operations by embedding intelligence into everydayworkflows. AI-powered assistants and intelligent agents serve as an interfacebetween users and enterprise data, streamlining tasks, enhancing data analysis,and improving decision-making across communication, collaboration, andproductivity tools. AI capabilities in Microsoft 365 Copilot can make use of allyour work data, like emails, chats, meetings, and documents empoweringemployees to automate routine tasks, generate insights, and focus on strategicinitiatives that drive business value. The rise of agents extends thistransformation, allowing organizations to build specialized AI-enabled solutionsthat can autonomously manage complex workflows, customer interactions, andoperational processes at scale. However, with opportunity comes responsibility. AI governance, security,and compliance must be prioritized to mitigate risks such as the use ofunsanctioned AI, overshared data, and ethical concerns. By implementingresponsible AI frameworks and making full use of built-in security controls,CIOs can ensure that AI adoption is safe, scalable, and aligned withorganizational policies and regulatory requirements. Frontier Firms are already taking shape… Microsoft expects that everyorganization will begin theirjourney to become one in the next2to5years. Adoptionis accelerating: To help every leader and employee prepare for what lies ahead, Microsoftanalyzed survey data from 31,000 workers across 31 countries, LinkedInhiring and labor market trends, and trillions of Microsoft 365 productivitysignals for the2025 Work Trend Index Annual Report. The insights from thisdata and interviews with AI startups, thought leaders, academics, and morepoint to the emergence of an entirely new type of organization: a FrontierFirm. Structured around on-demand intelligence and powered by “hybrid”teams of humans and agents—these companies scale rapidly, operate withagility, and generate value faster. 24% As many as82% of leaders say their companieshave already deployed AIorganization-wide,while just12% of leaders say this is a pivotal yearto rethink key aspects of strategyand operations. remain in pilot mode2 81% say they expect agents to bemoderately or extensively integratedinto their company’s AI strategyin the next 12 to 18 months. Executive snapshot:The CIO is the catalystfor AI transformation How to use this playbook Frontier Firms are proving what’s possible as defined by the five traits that setthem apart: organization-wide AI deployment, advanced AI maturity, currentand projected agent use, and a belief t