In a message to Microsoft employees, Chairman and CEO Satya Nadella introduced CoreAI – Platform and Tools, a new engineering division aimed at advancing the company’s leadership in AI and reshaping the application landscape.
In his published company message, Nadella emphasised that 2025 will mark a critical phase in the AI platform shift, where decades of technological evolution are being compressed into just a few years.
Microsoft’s latest AI approach will focus on building “agentic applications” that incorporate memory, entitlements, and action spaces to deliver enhanced performance. These applications, leveraging powerful model capabilities, will form the foundation of a new AI-first application stack.
It was also announced that Azure will serve as the core infrastructure, complemented by Microsoft’s developer tools and platforms, such as Azure AI Foundry, GitHub, and VS Code.
Why is this important?
Microsft has often been seen to be slow to invest in AI and so to accelerate this transformation, Microsoft is consolidating its efforts into CoreAI – Platform and Tools.
The new division merges key AI teams, including Dev Div, AI Platform, and others from the Office of the CTO, to create an integrated Copilot and AI stack for first- and third-party applications. It also oversees GitHub Copilot, fostering a feedback loop to refine the AI stack. Jay Parikh, appointed Executive Vice President of CoreAI, will lead this initiative alongside a team of senior Microsoft leaders.
Parikh will collaborate with other executives, including Scott Guthrie, to optimise Microsoft’s tech stack for performance and efficiency. Scott will continue to lead Cloud + AI, to support its mission-critical applications and AI workloads. By combining these teams, Microsft aims to significantly advance AI applications across the company.
image courtesy of Microsoft