Silicon Valley Bank, Signature Bank, and First Republic are among the largest bank failures in US history. But more banks could fail, according to Fed chair Jerome Powell.

• Bruce Nordstrom, former chairman of the family-run department store chain, has died.
• His grandfather started the business in 1901, which later grew into a fashion empire.
• Nordstrom's two living sons, Pete and Erik, are the company's President and CEO, respectively.

Bruce Nordstrom, the former chairman of the eponymous department store chain, has died at the age of 90.

Grandson of founder John W. Nordstrom, Bruce was instrumental in bringing the retailer to international prominence in a career that spanned four decades.

Bruce's eldest son Blake died in 2019 after a bout with lymphoma, and his two living sons, Pete and Erik, are now the company's President and CEO, respectively.

Here's how the Nordstroms built their empire from a single shoe store in Seattle to one of the biggest names in fashion retail.

Nordstrom was founded as a shoe store by John W. Nordstrom and Carl F. Wallin in Seattle in 1901.

Two decades later, the partners opened a second store in Seattle's University District.

John Nordstrom retired in 1928 and sold his share to his sons Everett and Elmer.

Wallin retired soon after and sold his share of the company to the Nordstrom sons too. John's third son, Lloyd, later joined the team.

John Nordstrom's sons focused on expanding into women's clothing.

Nordstrom purchased the Seattle-based clothing store Best's Apparel in 1963. Three years later, the company purchased a Portland, Oregon-based clothing store and began offering both shoes and apparel under the name Nordstrom Best. The company added men's and children's apparel in 1966.

In 1968, the three Nordstrom brothers handed the company over to the next generation.

Everett's son Bruce, Elmer's sons James and John, Lloyd's son-in-law Jack, and family friend Bob Bender became the new heads of the company. The third generation of Nordstrom chairmen took the company public in 1971, formally renaming it Nordstrom Inc.

The first Nordstrom Rack opened in the basement of the downtown Seattle store in 1973.

That same year, the company became the largest-volume fashion specialty store on the West Coast, with sales surpassing $100 million. The chain continued to expand throughout the next several decades.

In 1995, Nordstrom's third generation handed the reins over to the fourth.

The elder Nordstroms retired as co-chairmen, but remained on the Board of Directors, and Bruce's sons, Blake, Pete, and Erik, took over the company in 1995.

Bruce's oldest son Blake became co-president in 1995.

Blake began working in the family business when he was about 11 years old. His first role with the company was in the stockroom, and he went on to hold many roles with the company, including merchandise buyer, regional manager, and then vice president in charge of stores in Washington and Alaska.

Erik Nordstrom worked for his older brother in various positions at the company as the two rose through the ranks together.

"It was always the best working for my brother because he had more confidence in me and gave me more autonomy than anybody I had ever worked for," Erik Nordstrom said in his father's 2007 book, "Leave It Better Than You Found It."

Bruce returned as chairman in 2000, retiring for a second time in 2006.

Bruce and his sons were credited with turning the company around after several years of underperformance by non-family leadership.

Throughout the 2000s, Nordstrom partnered with fashion brands like Façonnable, Topshop, HauteLook, and Jeffery.

And in 2014, the company started expanding internationally. It opened stores in Canada and Puerto Rico.

Nordstrom opened its first menswear-only store in 2018, and a flagship womenswear store in 2019.

The concept combines in-store services such as tailoring, shoe shining, and food, with high-tech digital ordering and returns systems.

Blake died in 2019 at the age of 58, passing control of the company to his brothers.

"Blake was the best big brother, friend and mentor anyone could ever ask for," Pete and Erik Nordstrom said in a note to employees. "One of the things that brings us some comfort is that Blake's values, character and passion can still be reflected in what this company does – how we treat each other, our customers and our communities. Building on that is the best way we can think of to honor his legacy."

In April, Pete and Erik revealed that the company is exploring options to go private.

In regulatory filings, the brother said they had not yet received any financing commitments to complete such a deal.

In May, Bruce died at his home at the age of 90.

Nordstrom died on May 18.

"Our dad leaves a powerful legacy as a legendary business leader, a generous community citizen and a loyal friend," Pete and Erik said in a statement.

Jessica Tyler contributed to an earlier version of this story.

• Janet Yellen told The New York Times that G7 leaders will discuss the details of a loan program for Ukraine.
• The loan would use proceeds from Russia's frozen asset and potentially offer a $50 billion lifeline.
• The aid could offer Ukraine a means of survival as Moscow amplifies its offensive.

The US and its allies are getting serious about a plan to finance Ukraine using interest earned on Russia's frozen assets. Under the idea, these profits would be bundled together into a sizable loan, a possible means of survival for Kyiv.

"Showing that we do have the means of translating earnings on the frozen assets into a stream of support for Ukraine, I think, is an important way to demonstrate that we're not about to fold," Treasury Secretary Janet Yellen told The New York Times. "We're going to be able to help Ukraine."

Though not the only option available, it's the most promising suggestion on how to best use the $300 billion worth of Russian reserves, she said. These foreign assets were made inaccessible to the country in 2022, shortly after Moscow launched its invasion of Ukraine. 

If the Group of 7 leaders are able to finalize the loan's details in a meeting next week, it could make this a reality for Ukraine. So far, reserves have sat untouched in depositories, such as Euroclear; there, a trove worth $206 billion is generating over $3 billion in interest a year.

According to NYT, a loan based on the accumulated interest could offer Kyiv an up-front lifeline of $50 billion.

However, particulars still need to be agreed upon. G7 leaders need to decide how to deliver the funds or how the loan will be repaid if interest rates fall, tanking the proceeds. 

Such questions are the latest in a long line of discourse between Western leaders on how to use frozen Russian assets. Previously, some countries were ready to tap the reserves themselves, while others protested the idea as a dangerous move. Meanwhile, counterparts in Russia have voiced warnings of retribution if the reserves are grabbed. 

"I think we see considerable interest among all of our partners in a loan structure that would bring forward the stream of windfall profits," Yellen said. 

While this has meant months of G7 negotiating, finding a common-ground solution is now taking on rapid seriousness, as Ukraine's ability to hold off Russia is becoming ever-more questionable.

"I think we see considerable interest among all of our partners in a loan structure that would bring forward the stream of windfall profits," Yellen said.

On Monday, Ukrainian President Vlodimir Zelenskyy expressed frustration behind constant delays in Western aid.

"Every decision to which we, then later everyone together, comes to is late by around one year," he told the outlet. With Russia's offensive efforts mounting, Zelenskyy has urged Western allies to get involved more directly, such as by shooting down Russian rockets.

• Microsoft unveiled its new AI-powered Copilot+ PCs at a press event.
• Copilot+ PCs offer up to 20 times more AI power and 22 hours of battery life, according to Microsoft.
• Pre-orders start today at $999, with availability from June 18 from brands like Microsoft Surface, Dell, and HP.

Microsoft's AI-powered PCs are here.

Microsoft just unveiled a new line of Windows PCs designed for AI at a press event Monday.

The new line, called Copilot+ PCs, is the fastest and most intelligent Windows model of a PC built yet, according to Microsoft.

"We have completely reimagined the entirety of the PC — from silicon to the operating system, the application layer to the cloud — with AI at the center, marking the most significant change to the Windows platform in decades," the company said in its announcement.

Microsoft is launching Surface Copilot+ PCs, with the new Surface Pro and Surface Laptop, but it's also working with its hardware partners, who will also be launching their own Copilot + computers.

There's also some cool-sounding AI features, including some powered by the on-device AI chips.

The most notable is "Recall," which Microsoft says is basically like if your PC had "photographic memory" and could remember everything you looked at on your PC, helping you quickly recall where you stored something.

"You can scroll across time to find the content you need in your timeline across any application, website, document, or more," Microsoft said. "Interact intuitively using snapshots with screenray to help you take the next step using suggested actions based on object recognition. And get back to where you were, whether to a specific email in Outlook or the right chat in Teams."

Microsoft says the PCs are up to 20 times more powerful for AI and also offer improved battery life, with up to 22 hours on a single charge. The new chip architecture combines CPU, GPU and high-performance Neural Processing Units for efficient AI processing.

Pre-orders for the new PCs start today, with prices starting at $999. In addition to Microsoft's Surface PCs, the new Copilot+ computers will be available from six PC brands starting June 18, including Dell, HP, and Lenovo.

• V-22 Ospreys are back in the skies after a crash killed eight airmen last year in Japan.
• But the controversial tiltrotor aircraft is limited to operating within 30 minutes of an airfield.
• The Navy continues to rely on its aging C-2 Greyhound fleet until the Osprey's full return.

Air Force, Marine Corps, and Navy V-22 Ospreys were all given the green light to fly again in early March and have been slowly taking to the skies following a tragic crash that killed eight airmen late last year in Japan.

But months after the grounding was lifted, there are still restrictions in place that significantly limit the aircraft's ability to operate, Military.com has learned.

The services are barred from flying the controversial tiltrotor aircraft more than 30 minutes away from a suitable airfield to divert to in case anything goes wrong. That has caused some of the services, such as the Navy, to continue relying on other aircraft to accomplish tasks that the Osprey would have taken on.

Cmdr. Beth Teach, a spokesperson for Naval Air Forces, confirmed to Military.com on Thursday that the restriction was handed down by the V-22 Joint Program Office, part of Naval Air Systems Command, and is a requirement that all the services are following.

It was not immediately clear what would constitute a suitable landing zone for the tiltrotor aircraft which, by design, is meant to land quickly like a helicopter in austere conditions.

The Joint Program Office declined to comment to Military.com regarding the restriction.

A spokesperson for the Marine Corps could not provide details on the restriction but said efforts are underway to return the aircraft to full operations. 

"Operational security associated with our forward-deployed Marines and sailors limits our ability to provide details regarding any potential platform restrictions," Capt. Pedro Caballero, a spokesperson for the Marine Corps, told Military.com when asked whether the restrictions applied to its roughly 350 Ospreys, the vast majority of the military's fleet.

"The Marine Corps, after a thorough review of all available engineering data and with revisions to the flight manual in place, is now enacting a deliberate plan to return all 17 MV-22 squadrons to full capability," Caballero said. "The Marine Corps' three-phased approach begins with a focus on regaining basic flight currency, rebuilding units' instructor cadres, and achieving proficiency in core and basic skill training for pilots and aircrew."

Lt. Col. Rebecca Heyse, a spokesperson for Air Force Special Operations Command, told Military.com that the service is following the Joint Program Office's guidance for their return to flight plans but didn't provide additional details about current flight restrictions.

That restriction was publicly identified in a House draft text of the national defense authorization bill released this week. The bill details limitations and woes with the Navy's variant, the CMV-22, and how it's forcing the sea service to continue to rely more heavily on its aging C-2A Greyhound fleet, lawmakers wrote.

"The committee understands that current CMV-22 operations are limited to flights and missions that stay within 30 minutes of a suitable divert airfield," according to the House Armed Services Committee document. "This prohibits the use of the CMV-22 for carrier onboard support of deployed aircraft carriers once they have left their homeport."

The Navy used the Greyhound, which has been in service for 60 years and is slated to be retired by 2026, to fill the gaps when the Ospreys were grounded, but even though the Osprey is flying again, it appears the service is still relying on the planes.

That raised concerns for lawmakers who asked the Navy to provide House Armed Services with a report by February 1, 2025, on how the service will adjust once the C-2A is no longer available.

"With no other option available, the committee supports this interim solution but recognizes it is not a viable long-term solution beyond 2026," the draft bill said.

News about the Navy's restrictions and that it affected all variants of the Osprey was first reported by Aviation Week.

All of the services have been cautiously returning to the skies following a November 29 Air Force special operations Osprey crash off the coast of Japan that killed all eight service members on board — the deadliest CV-22 crash in the service's history — and led to a monthslong, military-wide grounding of the aircraft.

Military.com reported earlier this month that the Air Force had begun conducting flight checks for its Osprey variant, the CV-22. The Marine Corps and the Navy began flying some of their aircraft in March, the same month the Joint Program Office gave the OK to resume operations.

The Osprey Joint Program Office provided few details on what mechanical failure led to the deadly crash and how it planned to fix it.

"We have high confidence that we understand what component failed, and how it failed," Marine Corps Col. Brian Taylor, the manager of the V-22 program, told reporters in March. "I think what we are still working on is the 'why.'"

Meanwhile, the Osprey is looking at a makeover that officials hope will keep the aircraft flying until at least 2055 — and beyond.

The Joint Program Office, which oversees the V-22's development and operations, is looking to replace aging components in the aircraft's cockpit, as well as test solutions for a mechanical issue that has led to more than a dozen mishaps in its operational lifespan.

"There's a ton of life left in this platform, and there's a ton of mission left in this platform," Taylor said last month at the Modern Day Marine Expo in Washington, DC.

The mechanical issue the program office hopes to address involves a notorious clutch problem, called a "hard clutch engagement," which contributed to a crash in 2022 that killed five Marines. It is also known to have been involved in at least 15 other V-22 incidents since 2010.

Taylor mentioned that the program office oversaw the disassembly of clutches within the aircraft, including V-22s with 2,000 hours of flight and those with less than a hundred, which "helped us better understand this environment inside of this clutch assembly," he said.

He added that a new prototype for one of the likely culprits causing this issue — the input quill assembly — will be tested within the next month. That prototype includes 15 design changes, he said.

"When you purchase aircraft over about a 30-year span, you end up with some configuration challenges," Taylor said. "And that's what we're still kind of working through."

While operations are limited, Taylor said that Ospreys are abundant in the air — and have been for more than two months.

"I haven't done this math problem, but it's pretty safe to say that 24 hours a day, there's a V-22 flying somewhere on the planet … doing our nation's business," he said.

• JPMorgan CEO Jamie Dimon is talking about retirement.
• At an investor day Q&A, Dimon joked he was planning to step down within five years.
• Dimon said the plan to find a successor is "well on the way."

Jamie Dimon may be retiring sooner than we thought.

At an investor day Q&A on Monday, the JPMorgan CEO broke from his usual joke that he'll retire in five years.

When asked about his succession plan, Dimon seemed to acknowledge that he's thinking of stepping down when he joked that the timetable is "not five years anymore."

The bank boss also said the plan to name his successor is "well on its way" and floated staying on as chairman after he steps down.

"We're moving people around," Dimon, 68, said during the Q&A.

Wall Street has speculated for years about who will take over for Dimon when he eventually leaves JPMorgan.

Jennifer Piepszak and Marianne Lake, two key longtime executives, have been rumored to be next in line at the investment bank. But Troy Rohrbaugh, who was named co-CEO of JPMorgan's commercial and investment bank with Piepszak, has recently emerged as a dark horse candidate to take the CEO job.

JPMorgan COO Daniel Pinto has long been the emergency backup CEO in case Dimon needed to leave on short notice.

Dimon said his succession — and even when he leaves the job — is up to JPMorgan's board.

"I have the energy I have always had," he said at the investor day event.

Dimon didn't share more about the succession plan.

The CEO's comments echo last year's investor day event, where Dimon said he can be "intense" with his managing style and noted: "I think when I don't have that intensity, I should leave."

• Donald Trump may win the 2024 presidential election, sending him back to the White House.
• His second administration could be far more radical than the first one.
• That includes efforts to gut the federal bureaucracy and reduce constraints on Trump's power.

In January 2025, Donald Trump may be sworn into office as the 47th President of the United States.

Despite his ongoing legal troubles, plenty of national polling shows the former president being either tied or leading President Joe Biden,

A second term for Biden could mean either more of the same or a flurry of new progressive policies, if Democrats gain control of both chambers of Congress.

Another Trump term, on the other hand, would likely entail a radical reversal from not just the previous four years, but even from Trump's first term in office.

That becomes clear after examining the former president's campaign proposals, reading his April interview with TIME, reviewing reporting from The New York Times, and perusing proposals made by the conservative Heritage Foundation's Project 2025.

Some of these proposals may depend on Republicans gaining control of both the House and Senate, a likely possibility — though not guaranteed — if Trump wins the presidency.

While not exhaustive, here's just some of what to expect in a second Trump administration.

Radically reshaping the federal bureaucracy

Perhaps the most unorthodox — and to some, frightening — aspects of Trump's planning for a second term involve restructuring the executive branch in a manner that would drastically increase presidential power.

That includes exercising more direct control over the hundreds of thousands of civilian servants who populate federal agencies — many of whom are apolitical, and often remain in their jobs across presidential administrations.

Trump has pledged to bring back "Schedule F," a classification for civil servants that was created — but never used — in October 2020. Biden later rescinded it after taking office. That classification was designed to skirt the typical job protections afforded to career civil servants.

Trump's plans also include bringing independent agencies — such as the Federal Communications Commission and the Federal Trade Commission — under direct presidential control, a departure from decades of precedent. That could also include the Federal Reserve, the country's central banking system, though that's less clear.

Lastly, he has pledged to bring back "impoundment," in which the executive branch refuses to spend money provided by Congress. That's been illegal since 1974, but Trump is pledging to challenge it.

One of the hallmarks of Trump's first term was that he was significantly constrained, both by his advisors and aspects of the federal bureaucracy. Taken together, these proposals show how that could change.

A murky stance on abortion

In April, Trump declared that he believed abortion should be decided at the state level, seemingly rejecting the idea of enacting nationwide restrictions on the procedure.

"The states are going to say. It's irrelevant whether I'm comfortable or not," Trump told TIME. "It's totally irrelevant, because the states are going to make those decisions."

But that doesn't fully address the complexity of the issue — and it's unclear how far other Republicans may go.

In an April interview with TIME, Trump refused to say whether he would veto abortion restrictions passed by a Republican-controlled Congress, insisting there "will never be that chance because it won't happen."

He has also refused to state his position on whether mifepristone — a medication that enabled an estimated 63% of abortions in the US in 2023 — should remain legal.

Some of his allies have called for the enforcement of a 19th-century law called the Comstock Act that could be used to outlaw the mailing of the pill, a move that would affect women in a variety of states.

The potential of mass deportations and ending some birthright citizenship

Trump is expected to take a far more harsh approach toward illegal immigration and border security if elected — including pledging to carry out a massive deportation operation that could include the use of the National Guard.

That could include new detention camps, according to Stephen Miller, the architect of much of Trump's immigration policy.

Miller told The New York Times that a second Trump administration would build "vast holding facilities that would function as staging centers" on "open land in Texas near the border."

Trump has also pledged to end so-called "birthright citizenship" for the children of people who entered the country illegally and are not citizens. But it could be tricky.

The US Constitution guarantees birthright citizenship via the 14th Amendment, which states that "all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside."

Trump has pledged to sign an executive order making clear that those children are not "subject to the jurisdiction" of the United States — a move likely to be challenged in court.

Retribution against political opponents

Trump has pledged to appoint a special prosecutor to go after the Biden family, arguing that it's only fair given that he has faced criminal charges across a variety of jurisdictions for his "hush money" payments, his mishandling of classified documents, and his efforts to overturn the 2020 election.

It's part of a broader effort by Trump and his allies to curtail the independence of the Department of Justice, the nation's top law enforcement agency. Since the Nixon era, there have been strong norms around keeping the department at arm's length from the president, but some argue that shouldn't be the case — and that the present-day norms are a facade anyway.

Pardoning January 6 rioters

Trump has also promised to issue pardons for those who've faced federal convictions in connection to the January 6 assault on the US Capitol.

He has described jailed or imprisoned rioters as "hostages" and "political prisoners," and his campaign rallies have at times begun with a version of the national anthem sung by January 6 defendants.

In a recent interview with TIME, he said that he would not pardon those who were "evil and bad," but claimed that many of the rioters were "ushered in" by Capitol Police.

Tariffs on all imported goods

If re-elected, the former president has proposed many protectionist policies, including universal 10% tariffs on all imported goods.

"I call it a ring around the country," Trump told TIME.

Experts have warned that such a policy would simply increase consumer costs while doing little to boost domestic manufacturing and jobs.

He has also pledged to work with Congress to pass a bill enacting "reciprocal" tariffs on goods from other countries: For example, if China were to enact a 100% tariff on products from the US, the US would enact a 100% tariffs on Chinese-made goods in return.

Less willingness to protect allies abroad

Trump's positioning on the present-day wars has been somewhat murky — he's not as opposed to Ukraine aid as much of his party, and he's been far more willing to criticize Israel's war in Gaza.

"I think that Israel has done one thing very badly: public relations," Trump told TIME, blaming Israel in part for the lack of progress on a two-state solution.

But if there's been one consistent throughline of the former president's foreign policy thinking, it's a suspicion of long-standing arrangements designed to underpin the global world order.

Perhaps the most significant change Trump wants to see is a "reevaluation" of the purpose of the North Atlantic Treaty Organization, an alliance between the US and Europe that dates back to the Cold War. Trump has long argued that the US is spending too much to defend the continent.

Trump has also argued that much of the existing foreign policy establishment in Washington, DC needs to be overhauled, deriding officials at the State Department and Pentagon as "warmongers" and members of the "deep state."

Tax policy

As president, Trump and the Republican-led Congress passed the 2017 Tax Cuts and Jobs Act, a significant overhaul of the tax code that included cuts to individual and estate taxes and a significant lowering of the corporate tax rate from 35% to 21%.

Much of those cuts, aside from the corporate tax cut, are set to expire in 2025. According to Bloomberg, Trump wants to extend those cuts in a second term.

More vaguely, Trump has also proposed taxing private university endowments to fund a new federally-operated university called the "American Academy."

Social Security and Medicare

It remains unclear whether Trump would seek cuts to Social Security and Medicare in a second term — he's historically said a variety of contradictory things on the matter.

In March, Trump said in a CNBC interview that there's "a lot you can do in terms of entitlements in terms of cutting," seemingly suggesting that he would pursue cuts to entitlement programs. His campaign later backtracked on those remarks, saying he simply wanted to "get rid of waste and fraud."

Democrats have been eager to highlight the possibility of Republican-led cuts to the programs, which primarily benefit older Americans, while Republicans have often insisted that they are not interested in making changes to those programs.

During the final year of Trump's presidency, his White House released a budget for Fiscal Year 2021 that included some cuts to Social Security benefits, though the document never became law.

• Google is shifting to AI-generated answers for search queries to keep users on its site.
• This shift raises concerns about the reliability of AI answers and the impact on web traffic.
• The move risks disrupting Google's ad revenue model and the broader internet ecosystem.

Google is the internet's gatekeeper. You ask it a question, and it sends you to a site on the internet that can answer that question for you.

Except that's not really the case anymore. Google frequently tries to answer your question itself, on Google-owned real estate, so you have no need to go anywhere else. And now the company is super-sizing that effort with AI-generated answers that are going to be the standard reply for all search in the near future.

One problem with that plan is that generative AI engines just make things up. The other, more existential problem for both Google and the internet: If Google is answering all of your queries on its own site, why would you go anywhere else?

People who make a living putting things on the internet have been freaking out about this future for some time. But there's a risk for Google, too: If people aren't putting things on the internet, what will Google use to create answers?

The Atlantic's Charlie Warzel wonders about all of this and doesn't have an answer (Charlie does know how to get you to click on a story, though — call your story "The Toilet Theory of the Internet"). I don't think Google knows, either, which is partly why the company's answers to questions people are asking about all of this — including from CEO Sundar Pichai — are both vague and hard to take at face value.

One question I haven't seen addressed in most of these stories: Doesn't Google have to keep sending people to websites? Because selling sponsored links to websites is the economic engine that makes the $2 trillion company run. So this is all going to be messy — for Google, for web publishers, and the rest of us.

• Microsoft is expected to unveil updates on Copilot, Azure, and its Surface lineup this week.
• Analysts say Microsoft's AI and cloud innovations are underestimated by the stock market.
• Wedbush analysts projected that Microsoft's AI tools could generate $25-$30 billion in revenue by 2025.

It's about to be a big week for Microsoft.

Microsoft is in the spotlight as it follows major announcements from OpenAI and Google last week and prepares to unveil its latest AI innovations at Build, the company's annual developer conference.

The tech giant is also holding an exclusive event for journalists on Monday detailing its vision for hardware, which will likely feature its new Surface lineup along with some software updates.

The next day is the main event, Microsoft's Build keynote, where it's expected to announce updates to its AI assistant Copilot and cloud computing platform Azure, along with other Windows features.

Wedbush analysts said in a Monday note that they believe Microsoft's AI and cloud advancements have been underestimated by the stock market — but Microsoft tools like Copilot will be a major source of revenue growth that could generate between $25 and $30 billion for Microsoft by its fiscal year 2025.

According to Dan Ives, Wedbush's managing director and senior equity analyst, Microsoft's big week is expected to be all about three things — here's what's expected to be front and center.

Copilot and other AI features in Windows

Wedbush analysts expect Microsoft to roll out more Copilot and AI features into its consumer and enterprise product stack.

Wedbush said in its analyst note that it expects more AI integration with Microsoft apps like Excel, Teams, and Word, which will increase subscriptions and strengthen Microsoft's consumer base.

Over 70% of Microsoft's installed base "will ultimately be on this AI-driven functionality" in the next three years, the analyst said, which will be a big change for the company.

Ives said putting AI features into Windows will give developers the foundation to build AI use cases through Windows and, ultimately, Azure.

Showcasing AI framework in Azure

Ives said in some ways, the most important aspect of the developer conference is going to be showing off the AI framework in Azure.

In its analyst note, Wedbush estimated that Microsoft's customers still have plenty of room to increase their spending with the company. For every $100 they spend on Azure, there is an estimated $35-$40 in potential additional AI spending, they wrote.

"Cloud is where the battleground is between Google, Oracle, Amazon," Ives said. "Microsoft is showing developers to look no further than between us and OpenAI."

Surface Updates

Wedbush analysts anticipate new laptops along with Windows updates this week.

The new hardware expected to be announced on Monday, the day before Build kicks off, could include the Surface Pro 10 and the Surface Laptop 6, The Verge reports. Both would run on Qualcomm's Snapdragon X Elite processors as the company transitions to Arm, The Verge said.

New processors would come as Microsoft and other PC companies have been under pressure to ramp up their processing chips since Apple transitioned to creating its own. Recent reports also indicate that Apple is working on revamping its entire Mac lineup with a series of new M4 processors that aim to put AI at their center.

But Microsoft's Surface updates may kick off the trend. Ives said the new AI Surface updates will start a new PC-driven cycle that's "AI-led, from Dell to Microsoft, and ultimately to Apple as well."

Expect it to be a 'showstopper'

Microsoft has big shoes to fill following OpenAI's spring update and Google's I/O conference last week. Both companies announced human-like updates to their AI products, showcasing their AI agent's ability to respond to prompts with voice and act as a tutor.

Google also announced a revamped search engine integrated with AI, which competes with Microsft's AI-powered Bing.

But according to Ives, Microsoft will be a "showstopper." Due to OpenAI's collaboration with Microsoft, Ives said the conference will build on OpenAI's announcements from last week.

Business Insider will be liveblogging Microsoft's big opening keynote on Tuesday at 12 p.m. ET, so check back with us then to follow along.