Microsoft CEO Nadella forms new AI group to build and run apps for customers

Microsoft is forming a new group focused on developing AI apps and providing tools for third-party customers, the company announced Monday.

The new group will be led by Jay Parikh, the former CEO of cybersecurity startup Lacework and former global head of engineering at Meta. The group will be called Core AI — Platform and Tools, Microsoft CEO Satya Nadella said in a memo to employees that was also published as a blog post. The mission, he said, is “to build the end-to-end Copilot & AI stack for both our first-party and third-party customers to build and run AI apps and agents.â€�

The announcement comes 10 months after Microsoft hired DeepMind co-founder Mustafa Suleyman to lead Copilot AI initiatives. In that role, Suleyman is an executive vice president, reporting directly to Nadella.

In Mondayâ€s post, Nadella said Parikh will work closely with Suleyman as well as Scott Guthrie, who runs cloud, technology chief Kevin Scott and other top tech leaders at the company. Parikh joined Microsoft in October as an executive vice president, also reporting to the CEO.

Artificial intelligence has become the primary theme in tech since OpenAIâ€s launch of ChatGPT in late 2022, and Microsoft, as the principal investor in OpenAI, has been at the center of the boom. Microsoft counts on OpenAIâ€s large language models for internal AI use when it comes to areas like content generation and code creation and also serves as the startupâ€s main cloud partner.

At the same time, Microsoft is developing products and tools that compete with some OpenAI services. Over the summer, Microsoft added OpenAI to its list of competitors in its SEC filings, and Nadella used the phrase “cooperation tensionâ€� while discussing the relationship with investors Brad Gerstner and Bill Gurley on a podcast released last month.

“Ultimately, we must remember that our internal organizational boundaries are meaningless to both our customers and to our competitors,â€� Nadella wrote in Mondayâ€s memo.

The new group will bring together people working on developer and AI platforms, as well as teams from the Office of the CTO, Nadella said.

“Our success in this next phase will be determined by having the best AI platform, tools, and infrastructure,� he wrote.

Parikh joined Microsoft from Lacework, which had been a rapid growing and high-profile startup, soaring to a valuation of $8.3 billion in 2022, seven years after its founding. However, the companyâ€s fortunes turned when the market shifted away from risk, and Lacework was forced to dramatically cut staff to try and turn profitable. In August, security software vendor Fortinet closed its acquisition of Lacework for $149 million.

— CNBCâ€s Jordan Novet contributed to this report.