Microsoft Reorgs Its AI Businesses

Microsoft announced a major reorganization today, and this time it’s focused on Copilot and AI: It’s unifying its Copilot offerings across commercial and consumer, and it is consolidating its in-house “superintelligence” efforts to create its own AI models.

“It’s clear a new era of productivity is emerging as AI experiences rapidly evolve from answering questions and suggesting code to executing multi-step tasks with clear user control points,” Microsoft CEO Satya Nadella writes in an email to employees that the company published publicly. “You see this in our announcements over the last couple of weeks, like Copilot Tasks and Copilot Cowork, agentic capabilities in Office, and Agent 365. As these experiences connect more naturally across agents, apps, and workflows, we have an opportunity to help customers spend more time on higher-value work and reduce manual coordination, while providing people with more agency and empowerment and organizations with the governance and security controls they need.”

Here’s what’s changing.

Copilot unification. Microsoft is unifying its Copilot efforts across commercial and consumer with a focus on four key and connected pillars: Copilot experience, Copilot platform, Microsoft 365 apps, and AI models. The result, Nadella says, will be “a truly integrated system, one that is simpler and more powerful for customers” than its current “collection of great products.”

Jacob Andreou will lead the unified Copilot. Jacob Andreou has been promoted to executive vice president of Copilot and will report directly to Nadella. Previously from Snap and then a corporate vice president of product and growth at Microsoft for less than one year, Jacob “accelerated [Microsoft’s] user-focused AI-first product making and growth framework,” Nadella says.

Superintelligence. Microsoft will drive further progress at the AI model layer because creating its own models is “foundational to everything [Microsoft] builds above it” for the next decade. Left unsaid, the emphasis here is clearly on minimizing and then removing Microsoft’s reliance on models from OpenAI and others.

Mustafa Suleyman will lead the Superintelligence effort. Suleyman will continue to lead Microsoft’s in-house AI model work and will continue reporting directly to Nadella. This is “high ambition work,” Nadella says, but it’s difficult to not see this as a demotion of sorts, given that Suleyman previously led Microsoft’s consumer Copilot efforts. He is, in my eyes, one of the few decent human beings working on AI in Big Tech, and it’s possible that his human-centric views of how AI should evolve were at odds with Nadella’s more aggressive and antagonistic tendencies.

Copilot Leadership Team. Ryan Roslansky, Perry Clarke, and Charles Lamanna now lead Microsoft 365 apps and the Copilot platform, Nadella explains. And they, together with Mustafa, form a new Copilot Leadership Team (Copilot LT) that Nadella never really explains, especially given the changes in Copilot leadership and organization. But Suleyman says that the team will “focus our brand strategy, our product roadmap, our models and our core infrastructure as one to deliver the best experiences possible for all our users.”

“I came to Microsoft to create Superintelligence that delivers a transformative, positive impact for millions of people,” Mr. Sulleyman writes in his own email to employees. “This requires us to build frontier models, at scale, pushing the boundaries of what’s possible. Everything else follows from this. It’s the foundation for our future as a company. With our ambitious, long-term frontier scale compute roadmap locked, we now have everything we need to build truly SOTA [state of the art] models.”