Microsoft unveiled on Wednesday an AI coding model that can run directly on personal computers and new security technology to prevent AI agents from accessing data without permission, challenging Apple's push to bring more AI into personal devices.

The software company also presented a new laptop powered by Nvidia's chips as it seeks to turn Windows into a platform for AI agents to handle tasks such as writing code without having to access the cloud.

Microsoft said it was releasing Microsoft Execution Containers, a tool to prevent agents from accessing data and doing unauthorized tasks when running on a laptop or desktop machine. Anthropic, OpenAI and Nvidia will use the tools, Pavan Davuluri, executive vice president for Windows and devices, said at the event in San Francisco.

"We needed to make the desktop the most secure place for agents to execute," Microsoft CEO Satya Nadella said.

Davuluri said new tools would let IT departments set rules for agents and the Windows operating system would enforce those rules on each employee's machine.

For Microsoft, the move represents a bet that some work that currently happens in its costly Azure cloud computing data centers can be shifted to high-powered Windows machines in businesses and homes, a market where the Redmond, Washington-based firm retains a stronghold - and where its customers foot the hardware bills. It is a market opportunity rival Apple is also chasing with new Mac computers.

For Nvidia, cracking the Windows PC market could help it go after one of the last major markets dominated by Intel and Advanced Micro Devices.

Years of work

The event, which Microsoft billed as an update on its Windows operating system and Surface line of hardware, was the culmination of years of work between the flagship operating system maker for PCs and Nvidia, the AI chip company, to bring many tasks such as writing computer code or tackling complex business projects directly to desktops and laptops with Nvidia's RTX Spark chips.

Nadella and Nvidia CEO Jensen Huang took the stage to introduce the Surface Laptop Ultra, as the new machine is called.

One of the key challenges for Microsoft and Nvidia will be to show that agents, the AI systems that can tackle complex problems on their own, can be safely contained on personal computers. Nvidia is trying to prevent a repeat of the hack of AI hub Hugging Face, while Apple is looking to tighten up the process for giving AI agents full access to a Mac computer's hard drive.

But analysts said the biggest question will be the price of the new offerings after a memory-chip crunch has driven up prices for desktop and laptop machines.

When Microsoft originally pitched the idea of running AI tasks on PCs two years ago to save costs, the laptops were mostly priced below $2,000, but in recent weeks, Nvidia increased the price of an AI desktop machine called the DGX Spark by about 75% to $6,950, thanks to the surging costs of its 128 gigabytes of memory.

Anshel Sag, an analyst at Moor Insights & Strategy, said memory prices are affecting both Apple and Microsoft's efforts.

Two years ago, "the software wasn't ready, but the hardware was. Now the software is ready and the hardware is too expensive to actually run it locally," Sag said. "So it's becoming this thing where only the people who have the budget can really afford to run AI locally."