G42's Inception42 and Microsoft have made Catalyst and Microsoft 365 Copilot interoperable, so UAE government and enterprise organisations can build sovereign AI agents once and run them inside Teams, Outlook and Word, with all agent data processed in-country.
- Agents built in Catalyst surface directly inside Microsoft 365 Copilot, and agents built in Copilot compose back into Catalyst – nothing needs rebuilding.
- Catalyst runs on-premises, in a sovereign cloud, or in the public cloud, while enforcing UAE data residency throughout.
- The move supports the UAE's national agentic AI initiative, which targets AI agents supporting 50% of federal government operations within two years.
- This is a technical and governance announcement, not a consumer launch – it matters most to federal entities and large enterprises planning production AI rollouts.
That two-way flow is the story here. Plenty of organisations in the region have run AI pilots; far fewer have found a way to run agents in production with consistent security, compliance and oversight. This collaboration is pitched as the fix for exactly that – moving from fragmented, department-level experiments to a governed, enterprise-wide agent ecosystem, as detailed in the announcement.
How Catalyst, Compass and Copilot fit together
The setup involves three layers that organisations previously had to source and stitch together separately. Catalyst acts as the agent operating system, building institutional context across an organisation’s existing data sources – what Inception42 calls an AI Brain. Agents composed there are served through Compass, Core42’s sovereign model and infrastructure layer, and then surface inside Microsoft 365 Copilot where staff actually work.
| Layer | What it does |
|---|---|
| Catalyst (Inception42) | Builds, governs and observes agents; connects to existing data sources |
| Compass (Core42) | Sovereign model and infrastructure layer that serves the agents |
| Microsoft 365 Copilot | Where employees use agents day to day, inside Teams, Outlook and Word |
Inception42 CEO Ashish Koshy summed up the interoperability plainly: an agent built on Catalyst works in Copilot, and an agent built in Copilot works in Catalyst, “with nothing to rebuild and no separate infrastructure to stand up.” Microsoft is also throwing Forward Deployed Engineers at the problem to speed up rollouts.
Why in-country processing is the deciding factor
For UAE government and government-linked organisations, data sovereignty is not a nice-to-have – it is the gate everything else passes through. Catalyst is designed to run on sovereign infrastructure with all agent data processed in-country, and it can be deployed on-premises, in a sovereign cloud, or in the public cloud while still enforcing residency requirements.
Microsoft has already done its part on the productivity side: Microsoft 365 Copilot supports in-country data processing in the UAE, using the Dubai and Abu Dhabi datacentres so prompts and responses stay local. Combined with the two companies building out UAE datacentre capacity under their wider strategic partnership – part of Microsoft’s $15.2 billion AI investment in the country – the infrastructure argument for keeping agentic AI onshore is now fairly complete.
The 50% federal target this is built for
The announcement is explicitly framed as a key step in the UAE’s national agentic AI initiative, which targets AI agents supporting 50% of federal government operations within two years. That is an aggressive timeline, and it explains the emphasis on governance, observability and lifecycle management rather than flashy demos. You do not get half of federal operations onto AI agents with a patchwork of departmental pilots.
What is still to be clarified: availability timelines, whether access extends beyond government and large enterprise, licensing requirements, and named early customers or sectors. For now, this is an interoperability and governance announcement rather than something UAE businesses can sign up for tomorrow. But if your organisation has been stuck at the pilot stage because legal and compliance would not sign off on where the data goes, this is the announcement worth forwarding upstairs.
FAQ
What did Inception42 and Microsoft announce?
Interoperability between Inception42's Catalyst agentic AI platform and Microsoft 365 Copilot, so UAE government and enterprise organisations can build sovereign AI agents in Catalyst and use them inside Copilot apps like Teams, Outlook and Word – and vice versa, with agents built in Copilot composing back into Catalyst.
Is UAE data kept in-country under this setup?
Yes. Catalyst is designed to run on sovereign infrastructure with all agent data processed in-country, whether deployed on-premises, in a sovereign cloud, or in the public cloud. Microsoft 365 Copilot separately supports in-country data processing in the UAE via the Dubai and Abu Dhabi datacentres.
How does this relate to the UAE's national AI plans?
The collaboration is framed as a key step in the UAE's national agentic AI initiative, which targets AI agents supporting 50% of federal government operations within two years.
Can any UAE business use this now?
The announcement covers technical interoperability and governance for government and enterprise customers. Availability timelines, licensing details and whether access extends beyond large organisations have not yet been confirmed.
