Microsoft Axes Old Structure in Favor of AI-Driven Segments

Microsoft is undergoing a significant reorganization, dividing its operations into two main segments: 'Agents and Infra' and 'Devices and Consumer'. This change comes as a result of the increasing influence of AI on the company's structure, according to CEO Satya Nadella.

The 'Agents and Infra' segment will cover Microsoft's AI models, GitHub, Azure, and Microsoft 365, which features Copilot technology. In contrast, 'Devices and Consumer' will encompass Xbox and Windows, as well as search and advertising divisions like Bing and LinkedIn.

Nadella notes that the shift towards a more unified structure is driven by the changing landscape of AI. The company's previous segmentation, with three distinct areas: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing, has been replaced by these two new groups.

The projections for revenue are starkly different between the two segments, with 'Agents and Infra' expected to bring in around $75 billion for the first quarter of next year, while 'Devices and Consumer' is projected at about $15 billion. The change reflects a significant shift within Microsoft towards AI-driven technologies.