Microsoft shakes up AI operation in bid to streamline offerings

Microsoft didn’t announce any product changes on Tuesday, but a spokesperson said the data safeguards that the company offers corporate AI users would carry on in future versions of Copilot. Photo by RONNY HARTMANN/AFP via Getty Images

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Jacob Andreou, who joined the company last year, will manage the development of Copilot products aimed at consumers and corporate customers, chief executive Satya Nadella said in a memo to employees on Tuesday.

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The moves follows complaints, inside and outside the company, that fielding an array of Copilot assistants was confusing, and executives are betting that it will help Microsoft compete in a fiercely contested market.

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Mustafa Suleyman, the chief executive of Microsoft AI, will shift his focus to AI model development, an increasingly important push for the company as it works to build infrastructure independent of the large language models it licenses from OpenAI.

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Microsoft got a jump on the AI race thanks to its partnership with the ChatGPT maker, baking Copilot-branded tools into its productivity software. The flood of new Copilots confused some corporate customers, who sometimes worried they were being asked to pay multiple times for similar products.

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At one point, the company marketed more than a dozen Copilot variants, from tools for software developers to security professionals and finance workers. Analysts who advise Microsoft customers and investors struggled to navigate the complexity.

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In the last year, the Redmond, Washington-based company has tried to simplify its offerings, reducing the number of standalone products and folding some features together. In October, Microsoft linked the paid version of its consumer Copilot, the nearest product Microsoft has to a standalone ChatGPT rival, into its suite of Word, Outlook and other productivity apps. Last week, the company launched a new, higher-priced tier of its main business app bundle that includes access to Copilot features.

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More consolidation is coming, Suleyman said in an interview. The goal is to make the AI suite of products feel coherent and give consumers and corporate customers “the best of both worlds.”

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Microsoft didn’t announce any product changes on Tuesday, but a spokesperson said the data safeguards that the company offers corporate AI users would carry on in future versions of Copilot.

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Suleyman’s Evolving Role

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Suleyman joined Microsoft in 2024 when the company scooped up the engineers and intellectual property behind his AI companion startup, Inflection AI. His team, which set up its own Microsoft AI branding and opened some of its own offices, worked to bake AI features into Microsoft’s consumer-facing brands, including Bing web search and the MSN news portal. He also sought to establish Microsoft as a credible builder of its own foundational AI models.

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Suleyman and his compatriots then watched as rivals, including OpenAI and Alphabet Inc.’s Google, amassed a much bigger base of individual chatbot users.

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Responsibility for Microsoft’s product development in that race will now fall to Andreou, who joined Microsoft from venture firm Greylock Partners and previously spent eight years at Snap Inc.