Microsoft CEO Satya Nadella sees AI as an existential threat, a once-in-a-generation opportunity, and a chance to cement his legacy at the top of the technology industry.
This mission is both personal and professional for Nadella, who is pushing the company to rethink how it operates at every level. That's according to internal Microsoft documents and interviews with leaders, managers and other employees at the software giant obtained by Business Insider.
Significant organizational changes include high-profile executive changes and requiring teams to work faster and leaner. All of this is aimed at consolidating power around AI leaders and fundamentally reshaping how companies build and finance their products.
“Satya is about intensity and urgency,” one Microsoft executive told Business Insider. That's putting pressure on some Microsoft veterans to decide whether they want to stay and tackle the mountain of work needed to complete Nadella's AI revolution.
“You have to ask yourself how long you want to do this,” the executive added.
Mr. Nadella is in talks with executives about whether to agree to changes or resign, the people said. Many of these people requested anonymity to discuss confidential matters, but one top executive spoke candidly to Business Insider about the CEO shakeup and the future of AI at Microsoft.
Nadella's new technical focus
Nadella appointed a new CEO for Microsoft's commercial business this year to free up time to focus on the technical work needed for its AI ambitions.
According to an internal memo, Nadella also started weekly AI accelerator meetings and a corresponding Teams channel to speed up the pace of AI work and get more ideas from across the company.
Executives will not attend these new meetings. Instead, lower-level technical employees are encouraged to talk and share what they see from the AI field. People familiar with the new approach say it's designed to avoid top-down leadership from AI and is intentionally a little messy and chaotic.
Other key management changes are also looming. Rajesh Jha, the longtime head of Office and Windows, is considering retirement, three Microsoft executives told Business Insider. Insiders also talked about the possible departure of Charlie Bell, Microsoft's head of cybersecurity.
Microsoft spokesman Frank Shaw said the company does not anticipate any short-term changes to its senior leadership team, which includes Bell and Jha.
Rise of Artov
Judson Althoff, Microsoft Commercial CEO microsoft
Microsoft recently expanded longtime sales chief Judson Althoff into the role of CEO of its commercial business.
Althoff's promotion is intended to give Nadella and the company's engineering leaders time to focus on AI, according to an internal memo seen by Business Insider, which describes the moment as a “tectonic shift for the AI platform.”
One of the people said Nadella began saying the company was in the “mid innings” of AI, in cricket parlance, rather than “early innings,” and that he wanted to see the game through to the end.
“This will enable our engineering leaders and I to focus on our most ambitious technical work across data center builds, systems architecture, AI science, and product innovation to lead this generation of platform shifts with strength and pace,” Nadella wrote.
In practice, this means Althoff is spending more time as the face of Microsoft at events such as the recent Ignite conference. The conference was the first in Nadella's tenure that the company's CEO did not give a keynote address.
One executive told Business Insider that the move appears to be paying off so far, giving Nadella “additional bandwidth to really lead the company in learning, leveraging and building AI.”
“Satya is 100% committed to guiding the company to learn and adopt AI,” the official said. “Judson's move was a great one; it actually allowed Satya to spend more time advancing the company's AI efforts. Satya spends a significant amount of time in meetings characterized as AI learning, product, and engineering.”
new marching orders
Nadella recently announced new marching orders for executives on a separate Teams channel. This channel is only for Microsoft Corporate Vice Presidents and above. The CEO said the company has reached a tipping point at least as important as its move to cloud computing, requiring it to completely rethink its business model.
“We all must work and act like ICs, constantly learning and unlearning within our organizations,” Nadella wrote, referring to individual contributors, people who focus on technical work rather than managing people.
“Every time someone sends me a note talking to a friend at an AI startup, I laugh a little bit about how well they work and how agile and focused and fast they are,” the CEO added. “The reality is that this work is happening right under our noses at Microsoft. It’s our job as leaders to seek out, empower, develop, and learn from early career talent who are reinventing new production capabilities!!”
Production function description
Asha Sharma, president of Microsoft CoreAI products, who joined the company in 2024, said the company has dramatically transformed its operations during her short tenure. Nadella's new “production capability” is about using AI to fundamentally change how the company creates, builds, and delivers products and services.
When she joined the company, the AI industry was developing a new foundational model at scale approximately every six months. After that, releases occurred every six weeks. Today, AI is changing so rapidly that Microsoft is being forced to rethink not just its products, but the entire way it makes software, Sharma said in an interview organized by the company.
For decades, software development has functioned like a production line. It takes a set of inputs, such as people, time, and resources, and transforms them into outputs. Expanding production required expanding these inputs.
“AI disrupts that relationship,” she says.
AI agents, data, and intelligence now function as a new type of scalable unit that can generate software, insights, and decisions without increasing engineering time or budgets. This means the marginal cost of creating something new drops dramatically and teams can spend more time on “judgment, flair, and problem-solving,” Sharma explained.
evolution of leadership
With so much change happening, it is natural for leadership to evolve. Microsoft insiders expect more changes at the top.
Jha, a veteran executive who oversees popular Microsoft products such as Office and Windows, is considering retirement, according to three executives who spoke to Business Insider.
Still, one of those executives noted that Mr. Jha's renewed excitement about the company's AI potential may allow him to stay in Mr. Nadella's new turbulent era.
LinkedIn CEO Ryan Rozlansky could replace Jha if he steps down, executives said. Roslansky has been running LinkedIn since 2020, and Microsoft recently expanded Roslansky's role to include Outlook, Word, Excel, PowerPoint and Microsoft 365 Copilot applications, according to an internal announcement from Nadella in June.
Mr. Roslansky will report to Mr. Jha in his new role as executive vice president of Office, and will begin reporting to Mr. Nadella as CEO of LinkedIn, according to an organizational chart viewed by Business Insider.
Charles Lamanna, president of Business and Industrial CoPilot Group, which is responsible for building low-code applications and other AI tools, also moved to report to Jha at the time and is receiving increased attention within the company, people said.
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