Microsoft Enters Next Phase of AI Platform Shift, Announces CoreAI Division

This morning, Satya Nadella, Chairman and CEO, shared the following with Microsoft employees. As we enter the new year, it's evident we're embarking on the next phase of the AI platform shift. By 2025, the focus will be on model-forward applications reshaping all application categories, impacting every layer like the introduction of GUI, internet servers, and cloud-native databases into the app stack at once. We're compressing thirty years of change into just three! We'll develop agent-based applications with memory, entitlements, and action space, inheriting powerful model capabilities and adapting them for improved performance and safety across various roles, business processes, and industries. Our approach to coding these AI applications is fundamentally evolving to become agentic. This shift is creating a new AI-first app stack with fresh UI/UX patterns, runtimes for building with agents, orchestrating multiple agents, and reinvented management and observability layers. Azure must be the AI infrastructure as we build our AI platform and developer tools, including Azure AI Foundry, GitHub, and VS Code, upon it. Our AI platform and tools will unify to create agents, transforming every SaaS application category, and custom applications will evolve as "service as software. " We've been preparing for over two years, gaining insights into the systems, app platform, and tools needed for the AI era.
To accelerate our roadmap, we are forming a new engineering organization: CoreAI – Platform and Tools. This new division, led by Jay Parikh as EVP, combines Dev Div, AI Platform, and key teams from the CTO's office (AI Supercomputer, AI Agentic Runtimes, and Engineering Thrive). Their mission is to build the comprehensive Copilot & AI stack for both our first-party and third-party customers to develop and run AI apps and agents. They'll also advance GitHub Copilot, creating a strong feedback loop between the leading AI-first product and the AI platform. Jay will collaborate with Scott, Rajesh, Charlie, Mustafa, and Kevin to optimize our tech stack for performance and efficiency. Jay's team will also drive developer productivity and Engineering Thrive across Microsoft. As our cloud infrastructure business grows to become Microsoft's largest, Scott will continue leading Cloud + AI, ensuring we meet customer and partner demands for quality, security, and innovation in mission-critical applications, databases, and AI workloads. We must recognize that our internal boundaries mean nothing to customers and competitors. Operating as One Microsoft means increasing our customer focus, raising innovation standards, and driving accountability to fulfill our mission. Our success in this next phase hinges on having the best AI platform, tools, and infrastructure. We have significant work ahead and a tremendous opportunity, and together, I'm eager to build what's next. Satya
Brief news summary
Satya Nadella emphasized Microsoft's dedication to advancing its AI platform in preparation for the upcoming major technological transformation. By 2025, AI-driven applications are predicted to revolutionize multiple sectors, driving unprecedented innovation. Microsoft's aim is to develop AI-enhanced applications that transform roles, processes, and industries with features like memory, entitlements, and actions. This development will change Microsoft's approach to software development, deployment, and management, resulting in an AI-first application stack. Azure will serve as the foundational AI infrastructure, supporting key tools like Azure AI Foundry, GitHub, and VS Code. To lead this initiative, Microsoft is establishing a new engineering organization called CoreAI – Platform and Tools, headed by Jay Parikh. CoreAI will bring together teams from Dev Div, the AI Platform, and other divisions to create an integrated Copilot and AI stack. Focusing on collaboration and a customer-centric approach, Microsoft aims to lead in AI with top-tier platforms, tools, and infrastructure.
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