Microsoft demonstrated a Copilot app that can work with local files and take actions in Windows at its Windows and Surface event on 7 October, as Thurrott reported. Microsoft calls the system behind the app Hybrid Intelligence: it is designed to use AI running on the PC when possible and cloud AI when required. The demonstration moves Copilot beyond answering questions towards finding material and acting on it within Windows.
Key points
- Copilot-enhanced taskbar search was shown changing Windows settings, finding files and handling other short requests.
- Permission controls govern Copilot’s access to files, Windows actions and local models.
- An Autopilot demonstration found a file and drafted an email, then waited for approval to send it.
- Microsoft Execution Containers are generally available for running local agents.
Windows Taskbar search takes on settings
The taskbar search is the first place Microsoft plans to connect the new Copilot app to Windows, Thurrott reported. With permission, the search can draw on the contents of the PC as context. That puts a familiar entry point — the box used to look for an app or a file — in front of requests that ask Windows to do something.
Microsoft showed search changing between light and dark mode, switching on Do Not Disturb, taking screenshots, arranging the desktop and sending messages, XDA reported. It also showed search finding items in response to a text prompt. A question begun there can be opened in the main Copilot app for a fuller answer.
These are different kinds of work under one search box. Changing a display setting alters the PC; finding a document requires access to its contents or location; sending a message reaches beyond the machine. Microsoft’s demonstrations covered each kind of request, while the access controls it showed give them separate significance: a useful answer about a file and permission to take action on Windows need not be the same grant.
Hybrid Intelligence controls access to files
Hybrid Intelligence is Microsoft’s name for routing work between AI on the computer and AI in the cloud. Think of the PC as having both a workbench beside the documents and a connection to a remote workshop: Microsoft says its system uses the nearby one when it can, and the remote one when it needs to. The choice matters here because Copilot’s new tasks include work on files stored on the PC, rather than only questions typed into a chat window.
According to XDA, users can separately permit Copilot to reach local files, perform Windows actions and use local models, and can switch those permissions on or off. The controls concern what the app is allowed to do, while Microsoft’s local-and-cloud routing concerns where an AI task runs. A locally running model would still need the relevant permission to use files or act on Windows.
Finding a file to answer an email could become a request rather than a manual search followed by an attachment. It would still depend on access to the file, and sending the reply could remain a separate decision: those are the permissions and pause Microsoft showed, not steps the demonstration removed.
That pause appeared in Microsoft’s Autopilot demonstration. Copilot searched the PC for a requested file, attached it to an email and drafted a response, XDA reported. It then waited for permission before sending. The example puts a boundary at the point where preparing a message becomes delivering it.
Copilot Code and Microsoft Execution Containers
The new app also has a Code section. Microsoft demonstrated it generating a Windows-native app from a single written prompt, with the work running in what XDA described as a secure MXC local sandbox. Microsoft said no developer experience was required and showed Code passing work to other local models when needed. Pavan Davuluri described the wider approach as turning the PC into a “personal software factory”, Thurrott reported.
For people building on Windows, the local execution layer is another part of the announcement. Microsoft Execution Containers, introduced in preview at Build 2026 in June, are now generally available as container technology for local agents. A container gives such work its own execution environment on the PC. Microsoft also plans to update Windows 11’s Get Started experience to help configure AI agents.
Microsoft named Hermes, OpenClaw and Perplexity among its partners for local AI integrations. In a Perplexity demonstration, an agent resized and renamed photos before producing a local HTML gallery, with Microsoft saying the work ran on the device. The examples give developers both a route for running agents locally and a Windows setup flow for installing them.
The software arrives alongside Microsoft’s push for PCs with more local AI capability. AI Affairs previously reported that Microsoft left its Copilot+ PC badge off two new Surface models. Microsoft plans to release the Copilot-enhanced taskbar search in autumn 2026, according to XDA.
