We are on the cusp of a new business reality, one in which artificial intelligence can think and solve problems with extraordinary capabilities. This “on-demand intelligence” is not just another technological advancement; it is rewriting the fundamental rules of business and transforming knowledge-based work as we know it.
By 2025, we will see the emergence of what Microsoft calls “Frontier Companies”—organizations built from the ground up around on-demand intelligence and powered by teams of people and AI agents. These companies will operate with unprecedented agility, scale rapidly, and generate value faster than traditional organizations.
The data is compelling: 82% of business leaders believe this is a pivotal year to rethink important aspects of strategy and operations, while 81% expect AI agents to be extensively integrated into their company’s strategy in the next 12-18 months.
This is not a future possibility, it is happening now, with 24% of leaders reporting that their companies have already implemented AI across their entire organization.
The Three-Phase Journey to Becoming a Frontier Company
The transformation to a Frontier Company occurs through three distinct phases:
Phase 1: Human with an Assistant In this initial phase, every employee gets an AI assistant to help them work better and faster. These assistants eliminate tedious work and improve productivity in existing workflows. We’re already seeing this phase widely deployed, with tools that help with everything from writing emails to creating presentations.
Phase 2: Teams of Humans and Agents As organizations grow, agents join teams as “digital colleagues,” taking on specific tasks at the behest of humans. Unlike simple assistants, these agents can handle complex tasks like creating marketing plans or conducting research. They effectively become team members with specialized skills, extending the capabilities of human workers.
Phase 3: Human-Led, Agent-Managed In the most advanced phase, humans primarily set the direction while agents execute entire business processes and workflows, stepping in only when needed. Imagine a supply chain where agents handle end-to-end logistics while humans route the system, resolve exceptions, and manage supplier relationships. This represents a fundamental reimagining of how work gets done.
It’s important to note that organizations won’t progress linearly; many will work through all three phases simultaneously across different functions.
