Microsoft Overhauls Reporting Structure to Reflect AI Dominance

Microsoft is revamping its reporting structure to better reflect the company's increasing focus on artificial intelligence (AI). The change, which will take effect in fiscal year 2027, marks a shift from three segments to two: Agents and Infra, and Devices and Consumer.

The move is a response to how AI is blurring product boundaries and reshaping corporate business models. According to Satya Nadella, chairman and chief executive officer, AI represents a 'profound shift' in technology and business, changing what the company builds and how it operates.

Under the new structure, Agents and Infra will bring together Microsoft's cloud and productivity platforms, including Azure core cloud computing services, Microsoft 365, and traditional business and productivity software subscriptions. The Devices and Consumer segment will consist of Search and Advertising, which includes Bing and LinkedIn's ad business, Windows operating system licenses and device sales, and Xbox gaming hardware, software, and services.

The change is intended to more effectively demonstrate AI-driven economics to investors and prove AI return on investments to Wall Street. It also reflects how customers use technology in the modern era.