Microsoft's Compact Mu Language Model Powers Instant AI Settings Agent For Windows

Microsoft Corp. (MSFT) has introduced a compact, on-device language model named Mu, designed for fast and private AI interactions on Copilot+ PCs. 

This lightweight model is specifically optimized to operate directly on a machine’s Neural Processing Unit (NPU), delivering high-speed, low-latency performance without relying on cloud infrastructure.

Mu powers the new Settings agent available to Windows Insiders using supported devices, helping users navigate and adjust system settings through natural language prompts. 

The model is tailored to map user input directly to actionable system functions. 

Mu, built with only 330 million parameters, adopts a transformer-based encoder–decoder structure that improves processing efficiency by splitting input encoding and output generation. 

This architectural choice enables quicker responses and lower memory demands. Testing on Qualcomm’s Hexagon NPU revealed a 47% drop in time to generate the first token and decoding speeds nearly five times faster than comparable models relying solely on decoder designs.

Mu can generate more than 100 tokens every second, delivering responses in under half a second during real-time use. When deployed on tuned systems such as the Surface Laptop 7, its output surpasses 200 tokens per second. 

This enables fast, private, and responsive interactions, crucial for AI operations running directly on user devices.

Microsoft fine-tuned Mu to support hundreds of system settings, ensuring users can control complex features like display brightness or power modes via simple queries. 

To manage ambiguity in user prompts, the agent blends Mu’s intelligence with traditional search-based results when needed.

Last week, Microsoft announced that it is upgrading its European cloud services to enhance data sovereignty, providing customers with more control and ensuring that data remains within Europe in accordance with local legal frameworks.

On Stocktwits, retail sentiment toward Microsoft remained in ‘neutral’ territory.

Microsoft stock has gained over 15% year-to-date and over 8% in the last 12 months.

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