Microsoft may deepen its cooperation with Chinese AI startup Kimi by extending their partnership from cloud infrastructure to the application layer, people familiar with the matter said.

The move follows Microsoft Azure’s decision earlier this month to integrate Kimi’s K2 large language model. Sources said the two sides are now exploring an agent-level collaboration that could see new AI-powered agent functions launched as early as this month, aimed at enhancing automation across Microsoft Office products.

The proposed cooperation would leverage AI agents capable of autonomously handling complex tasks, such as document processing, workflow coordination and data analysis, enabling higher levels of Office automation.

The initiative is seen as part of Microsoft’s efforts to respond to intensifying competition from domestic software and AI vendors in the Chinese market.