Microsoft has unveiled a new AI-focused engineering organization, marking a significant evolution in the company’s artificial intelligence strategy. The new division, CoreAI — Platform and Tools, will be led by Jay Parikh, former VP and global head of engineering at Meta, who will report directly to Microsoft CEO Satya Nadella.
This reorganization, which combines Microsoft’s existing Dev Div and AI platform teams with select employees from the Office of the CTO division, represents a strategic move to prioritize AI development across the company’s portfolio. According to an internal memo published on Microsoft’s blog, Nadella emphasized that Microsoft’s focus for the upcoming year will center on “model-forward” applications designed to reshape all application categories.
The formation of CoreAI builds upon Microsoft’s extensive history in artificial intelligence, dating back to the company’s earliest days when co-founder Paul Allen’s vision was inspired by science fiction’s portrayal of intelligent machines. This legacy was formalized in 1991 with the establishment of Microsoft Research by John Myhrvold and Peter Rashid, marking the beginning of the company’s dedicated AI research initiatives.
The new organization will integrate several key Microsoft AI teams, including:
• Copilot development team
• Bing and Edge AI components
• GenAI team
• Developer Division
• AI Platform teams
Parikh, who joined Microsoft in October after serving as CEO of cloud security startup Lacework, brings significant experience in technical infrastructure and data center projects from his tenure at Meta. His appointment signals Microsoft’s commitment to strengthening its AI infrastructure and development capabilities.
Microsoft’s AI investments have shown promising financial results, with AI services contributing 8 percentage points to Azure and other cloud services revenue growth, which experienced a 29% increase. The company continues to maintain its strategic partnership with OpenAI, which remains central to its AI innovation strategy.
The reorganization reflects Microsoft’s response to industry competition and internal assessments. In 2019, Microsoft CTO Kevin Scott advocated for a more aggressive AI strategy in response to advances by competitors like OpenAI, DeepMind, and Google Brain. This led to increased investments in data centers and advanced processors, creating the foundation for the current organizational changes.
The creation of CoreAI represents Microsoft’s latest step in what it calls “Year Two of the AI platform shift,” focusing on bold innovation and product development while maintaining its platform and partner-led approach. This restructuring aims to streamline AI development processes and ensure more efficient integration of AI technologies across Microsoft’s product ecosystem.
