Microsoft CEO Satya Nadella has undertaken a major leadership restructuring to accelerate the company’s artificial intelligence efforts. The changes signal a strategic shift to reduce dependence on OpenAI.
Nadella brought in big names from competitors and elevated internal talent throughout 2025. Jay Parikh, former Meta engineering lead, now heads Microsoft’s CoreAI unit overseeing developer tools. Judson Althoff handles business sales while Ryan Roslansky continues as LinkedIn CEO.
According to Financial Times, the CEO is reacting to increased competition in the AI space. He wants Microsoft to move faster on developing its own AI models and coding tools.
Founder Mode Activated
Current and former Microsoft executives describe Nadella as operating in “founder mode.” Dee Templeton, deputy chief technology officer at Microsoft, used the term to describe his hands-on leadership style.
Nadella now holds weekly meetings with AI team leaders. He cut bureaucratic processes to speed up decision-making. AI division heads received independent budgets and authority to attract top talent.
“He wants to keep experimenting and see what’s going to deliver,” said Soma Somasegar from venture capital firm Madrona. The changes help reduce “red tape” as Microsoft builds AI plans separate from OpenAI.
OpenAI Partnership Changes
Microsoft jumped ahead in AI with a $14 billion investment in OpenAI. The deal provided early access to technology and priority on data center contracts.
However, the partnership changed in October 2025. Microsoft will lose exclusive rights to OpenAI’s data centers. By the early 2030s, the company will no longer have exclusive access to OpenAI’s research and models.
Under the new agreement, OpenAI became a public benefit corporation. Microsoft holds about 27% equity valued at roughly $135 billion. The company retains key AI model rights through 2032.
Competition Heats Up
Sources close to Nadella say he watches Amazon and Google more closely now. Both companies made big strides in AI infrastructure and model development.
Microsoft’s Copilot assistant passed 150 million monthly users. But that number falls short compared to competitors. Google’s Gemini chatbot has about 650 million users. OpenAI’s ChatGPT leads with 800 million users.
For more on AI assistants, check out our best AI apps comparison.
New Talent and Internal Tensions
The leadership shake-up brought in outsiders and created some internal discontent. Last year Microsoft hired Mustafa Suleyman, Google DeepMind co-founder, to lead Microsoft AI. He received his own budget and pay authority.
“Satya is determined to support new recruits against Microsoft’s own culture,” one Microsoft worker said. “There is some jealousy internally. People are making more money in his unit.”
Nadella also spent more time talking to startup companies. He met with Applied Compute, a firm making specialized AI agents founded by former OpenAI employees. He talked to Mercor, a hiring platform, to understand what companies want from AI tools.
Diversification Strategy
Microsoft now embraces multiple AI models and frameworks. The company works with Anthropic, Meta, and other collaborators while building its own systems.
The company plans to grow its workforce in 2025 with a focus on AI skills. Teams will use AI tools deeply to improve productivity rather than just add headcount.
