Microsoft Rewires Business Around AI-Focused Categories
Microsoft is undergoing significant changes to its business structure as it adapts to the AI era. The company is shifting from three reporting segments to two, with artificial intelligence playing a central role in both new categories.
The Agents and Infra category will include Azure, Microsoft 365, GitHub, productivity and server licenses, industrial solutions, and support services, while Devices and Consumer will cover Windows OEM and devices, Xbox, and search and advertising. AI is transforming Microsoft's products and business strategy, blurring the lines between traditional product categories, according to CEO Satya Nadella.
As part of this change, Azure will be more clearly focused on consumption-based platform and infrastructure revenue. Microsoft predicts Agents and Infra revenue of $75.15 billion to $75.75 billion in fiscal Q1, while Devices and Consumer sales are expected to reach $14.7 billion to $15.2 billion.
The company has maintained its full-year revenue forecast, expecting total fiscal Q1 revenue to range between $89.85 billion and $90.95 billion. Investors will get their first glimpse of the new reporting format in October when Microsoft releases its quarterly results under this new framework.