Microsoft wants to build the infrastructure behind the AI internet
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Illustration: Annelise Capossela/Axios
Microsoft is building universal protocols and tools that will make the agentic web reliable and transactable across all AI platforms.
- It's in active conversations with other AI companies to participate, says corporate vice president for AI monetization Tim Frank.
Why it matters: The company believes its 51-year history, focused mostly on enterprise solutions, established the trust and scale necessary to build the foundational layers of the agentic web.
- "We do not have conflicting interests about operating as a platform," Frank said. "We operate to help our customers succeed, and since that orientation aligns so well with this strategy, we think it's true to us."
How it works: The open web was created based on a value exchange between publishers and distributors: Publishers made their content widely accessible for search companies to distribute and both parties made money.
- Brands could rely on a balanced marketplace to set fair advertising rates.
- Google became the most popular marketplace for those transactions, and its dominance accelerated in the mobile era with Chrome and Android distribution.
- That dynamic will not work the same way in the agentic era.
State of play: To create a two-sided marketplace that benefits all parties, Microsoft is establishing a set of foundational standards and tools that it hopes will help all AI platforms and publishers align on what constitutes fair use information on the internet. (An example of this type of information would be what time the Sun sets.)
- From there, it is building additional layers of infrastructure to sit on top of that baseline that can help publishers, brands and customers transact.
- Last year, Axios reported that Microsoft is building a two-sided marketplace that would compensate publishers for content used by AI products, called a Publisher Content Marketplace.
- That effort is expanding as more publishers, brands and partners sign on.
Between the lines: The PCM aims to help publishers of information that isn't readily available for free on the internet get compensated for citations on AI platforms.
- That type of premium information could include map data, product catalogs, news and information, health information, and more.
- Microsoft rolled out the PCM to publishers, with its Copilot assistant as the first platform providing demand. The company is in active conversations with other AI platforms to bring their inventory to the marketplace.
Reality check: Currently, publishers are striking retrieval augmented generation deals with AI platforms that grant access to this type of content, but those deals typically involve upfront payments instead of a marketplace that serves as an ongoing value exchange.
Zoom out: As the premium content marketplace builds out, Microsoft is starting to work on the tools necessary to make it sustainable and easy to transact on.
- On Tuesday, it announced support for the Universal Commerce Protocol, an open standard for AI-driven shopping developed by Google in conjunction with other major shopping companies, like Shopify.
- It said it will expand its AI-powered checkout system called Copilot Checkout by integrating Shopify's Global Catalog and making more than half a million merchants available to users. It's also adding customer loyalty experiences through companies like Target.
- It also announced new insight tools meant to help publishers and advertisers optimize their content based on how it's being crawled and surfaced across the agentic web. It's offering AI-powered ad tools for things like query matching and smarter URL routing.
The big picture: Microsoft has built its empire by focusing mostly on enterprise software, while Google has taken the lead on monetizing free consumer products — like YouTube and search — through advertising.
- Microsoft sees an opportunity to continue owning those enterprise relationships in the AI era.
- While it does plan to charge a technology fee to provide access to its services, it won't take a cut of any transactions and will keep the fee low to ensure the marketplace is equitable and scales, per Frank.
The bottom line: "We expect this to be a very high-volume marketplace in the future, and so by being a low-cost, highly reliable good piece of infrastructure, we hope and think that businesses, merchants, partners, advertisers will choose us to build on top of," Frank said.
- "If we provide it at a reasonable enough cost and operate as somebody who respects their relationship with their customers, then we think that's a very, very good value exchange that people will be happy to pay for."
