Microsoft CEO Satya Nadella announced the formation of a new division called "CoreAI - Platform and Tools" in response to what he sees as rapidly accelerating AI development.
In an internal memo to employees, Nadella explained that changes that would normally take decades are now happening in just a few years. "Thirty years of change is being compressed into three years!" Nadella writes.
The new CoreAI department will unite Microsoft's AI efforts across the company, combining the Copilot platform, AI agents, and developer tools. Microsoft is merging several teams to achieve this goal, including its development division, AI platform group, and core teams from the CTO's office.
Former Meta executive Jay Parikh will lead CoreAI after spending more than eleven years as Meta's Vice President and Global Head of Engineering. His primary task is to create what he calls an "end-to-end AI stack" for applications driven by AI agents, though some in the AI industry debate the role of these agents.
Changing how software works
Nadella believes that software development is about to change fundamentally. He expects new user interfaces and AI agents to build and run applications differently. These systems will adapt their capabilities based on specific roles, business processes, and industries, potentially outperforming current software in both performance and security.
Microsoft will use its Azure cloud as the foundation for this AI infrastructure, supporting tools like Azure AI Foundry, GitHub, and VS Code. AI agents will also be used to develop and maintain AI application code. CoreAI will continue to work on GitHub Copilot, using lessons learned from this AI coding tool to improve the broader AI platform.
The company calls this approach "Service as Software," allowing software to develop custom applications or AI agents that can change SaaS applications on their own. According to Nadella, success in this new phase will depend on having better AI platforms, tools, and infrastructure.
