Microsoft Reorganizes AI Leadership to Close User Gap With Rivals
Microsoft has restructured its AI division, separating product development from research to accelerate adoption of Copilot as the assistant trails far behind competitors. Jacob Andreou, a former Snap executive, now oversees Copilot for both consumer and enterprise customers, reporting directly to CEO Satya Nadella. Mustafa Suleyman, who previously led product efforts, shifts to advanced research on superintelligence.
The reorganization reflects mounting pressure on Microsoft's AI business. In enterprise, the company claims 15 million M365 Copilot licenses-a fraction of its 450 million commercial users. The consumer gap is wider: Copilot reaches 150 million monthly active users compared to Google's Gemini at 750 million and OpenAI's ChatGPT at 900 million weekly users.
Microsoft's stock has fallen nearly 17 percent since the start of 2026, closing at 336 euros yesterday.
Building Independent AI Capabilities
Microsoft is developing proprietary technology to reduce reliance on OpenAI. The company recently introduced MAI-Image-2, a text-to-image model that ranks third in industry benchmarks and will integrate into Copilot and Bing search.
OpenAI commitments account for roughly 45 percent of Microsoft's remaining performance obligations. By consolidating product teams under Andreou, the company aims to end fragmentation across its AI services and improve customer adoption rates.
For executives evaluating AI strategy, Microsoft's move signals a broader shift: the pressure to build independent capabilities rather than rely solely on partnerships. AI Strategy for Executives covers how organizations are navigating similar decisions about internal development versus external partnerships.
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