REDMOND, July 3 -- For most of the Fortune 500, the problem with enterprise AI is not the model. It is the gap between a software license and a working system: the months of configuration, data integration, change management, and institutional politics that stand between signing a contract with Microsoft and actually extracting value from it.

Microsoft Corp. is betting $2.5 billion that it can close that gap itself. The company on Thursday unveiled Microsoft Frontier Company, a new venture that will embed a workforce of 6,000 engineers directly inside enterprise clients, doing the deployment work that licenses alone have not delivered. The announcement positions Microsoft not merely as an AI vendor but as an AI contractor, taking on the ...