Microsoft Shakes Up AI Division As Copilot Falls Behind Google and OpenAI
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US tech giant Microsoft has announced a far-reaching reorganization of its artificial intelligence division. Central to this is a shift in responsibilities for Mustafa Suleyman, co-founder of DeepMind, who has led the company’s consumer AI division since 2024. Going forward, he will focus exclusively on the development of the company’s own language models.
Key Personnel Changes
Jacob Andreou, former Senior Vice President at social media company Snap, will take over as Executive Vice President leading the entire Copilot division. This encompasses both the consumer app and the commercial service Microsoft 365 Copilot. Andreou reports directly to CEO Satya Nadella. In his previous role as CVP of Product and Growth, he had already established a user-centric, AI-oriented product framework, according to the company.
Mustafa Suleyman remains at the company and continues to lead the development of so-called frontier models — particularly powerful foundation models. He also reports directly to Nadella. The new leadership structure is complemented by Ryan Roslansky, Perry Clarke, and Charles Lamanna, who together are responsible for Microsoft 365 applications and the Copilot platform.
Background: Weak Market Share and Dependence on OpenAI
The restructuring comes against the backdrop of a challenging competitive environment. Microsoft’s Copilot app has only 150 million monthly active users. By comparison, Google’s Gemini has 750 million, and market leader ChatGPT from OpenAI has around 900 million weekly active users. Growth in the commercial segment is also falling short of expectations: of more than 450 million business customers, only 15 million currently use the paid 365 Copilot service.
Added to this is the structural dependence on OpenAI. While Microsoft holds a 27 percent stake in its profit-oriented unit and is a long-standing partner of the ChatGPT maker, it is increasingly competing with it for enterprise customers. Last month, Suleyman had already called in an interview for Microsoft to achieve “genuine independence” and reduce its dependence on OpenAI.
Statements from Executives
Nadella emphasized in his internal memo the strategic importance of proprietary models for the coming decade:
“Advances at the AI model level are more important than ever for our success as a company over the next ten years and form the foundation for everything we build on top of them.”
Nadella announced that the company would intensify its efforts toward so-called superintelligence with corresponding resources and computing capacity. The goal is to move from a collection of individual products to an integrated overall system that is simpler and more powerful for customers.
Suleyman himself described the realignment as a logical next step:
“The next phase of this plan is to restructure our organization so that I can focus all my energy on our superintelligence efforts and deliver world-class models for Microsoft over the next five years.”
He highlighted that a long-term roadmap for computing capacity in the frontier area is already in place and that the company now has all the necessary prerequisites to develop competitive models.
Goals of the New Structure
According to the published memos, the reorganization pursues several concrete goals:
- Unification of the Copilot product family — previously criticized as confusing — under a single leadership
- Building proprietary, powerful language models to reduce dependence on OpenAI
- Reducing operating costs for AI services at scale
- Stronger integration of agentic features into enterprise applications
- Clearer lines of responsibility along the system architecture
Microsoft’s own model lineup is currently considered less capable than the leading offerings from Anthropic, Google, and OpenAI. However, the company has announced its intention to close the gap with new releases throughout the year. Whether the personnel changes will contribute to this remains to be seen.
