Microsoft announced an updated Copilot app on Friday as the tech giant takes another step to monetize its artificial intelligence and compete with fellow AI labs.

The company said it's making big changes to its Copilot app. This includes introducing Office in Copilot, which allows users to ask the AI chatbot to create a document, spreadsheet, or other file right in the app. Copilot will then create a Word, Excel or PowerPoint file in real time.

Microsoft also introduced Autopilot in Copilot, which is the new name for Scout, Microsoft's AI agent. Autopilot can actively complete tasks for a user.

"Give it a name, a role and a goal, and it goes to work-watching channels, following up on threads, running recurring work and picking a project back up days later, without waiting for a prompt," Microsoft said in its press release.

Microsoft stock was up 3.6% to $515.84 on Friday.

A crucial part of Friday's announcement was changes to pricing.

Microsoft initially charged for Copilot on a per seat model, meaning it charged a certain amount per user per month. That's evolving as the AI usage becomes more advanced. Microsoft is moving to charging for its more intensive agentic offerings through both a seat and consumption model. That means businesses will also pay based on how much work the agents do.

It's important for Microsoft to show investors that it's monetizing off its AI offerings. Companies like Microsoft are spending massive amounts of money to develop the best AI, and investors want to see returns on those investments.

Microsoft also needs to prove to shareholders that it can compete with the other AI out there, like Anthropic's Claude, which is a popular option for enterprises.

"Earlier this year, the main push back from investors was Copilot lagged the capabilities of the frontier labs, weakening the Copilot narrative. MSFT has always been a fast follower, and we believe MSFT's Copilot strategy has improved materially YTD," Piper Sandler analyst Billy Fitzsimmons wrote on Friday. He rates Microsoft as Overweight with a $550 price target.

Microsoft shareholders have been waiting for this launch after CEO Satya Nadella hinted at it on the company's last earnings call in July.

"This quarter, we also introduced Autopilots, autonomous long-running agents with full enterprise compliance, including always-on personal agent powered by OpenClaw. And this quarter, we are bringing these Copilot experiences together, including code in one super app spanning both consumer and commercial experiences," Nadella said at the time.

Friday's stock move signals that shareholders view the new "super app" as a positive step forward for the company.