News
Microsoft Launches Core AI Division to Drive AI-First Application Development
Microsoft has announced the formation of Core AI, a new engineering division focused on the development of AI-powered applications, marking a strategic push to integrate AI across its software ecosystem.
The new division, unveiled by CEO Satya Nadella in blog post, will consolidate teams from Microsoft's Dev Division, AI Platform, and key groups from the Office of the CTO. It will focus on building an "end-to-end Copilot and AI stack," a framework designed to facilitate AI-driven applications for both internal and third-party customers, Nadella said.
"We will build agentic applications with memory, entitlements, and action space that will inherit powerful model capabilities," Nadella said. "Further, how we build, deploy, and maintain code for these AI applications is fundamentally changing and becoming agentic."
The Core AI division will be led by Jay Parikh, the former global head of engineering at Meta. Under his leadership, the division will focus on evolving Microsoft's AI development tools, particularly GitHub Copilot, which plays a central role in AI-driven software development.
Microsoft is positioning Core AI to advance a new AI-first application framework that integrates modernized user interfaces, agent-based runtimes, and improved observability and orchestration tools. The company sees this as a fundamental transformation in software development, similar to past technological shifts such as graphical user interfaces (GUIs) and cloud-native applications.
"This is leading to a new AI-first app stack—one with new UI/UX patterns, runtimes to build with agents, orchestrate multiple agents, and a reimagined management and observability layer," Nadella said.
The formation of Core AI aligns with Microsoft's broader vision to position Azure as the backbone of AI infrastructure. The initiative will integrate with Microsoft's AI platforms and developer tools, including Azure AI Foundry, GitHub, and Visual Studio Code.
Parikh and his team will collaborate closely with Microsoft's cloud and AI leadership to enhance efficiency and performance across the company's technology stack.
"As our cloud infrastructure business continues to grow and scale to become Microsoft's largest business, we must ensure we're delivering the quality, security, and innovation that customers count on for mission-critical applications, databases, and AI workloads," Nadella stated.
Microsoft has been aggressively investing in AI, including its high-profile partnership with OpenAI and the rollout of AI-powered Copilot features across its products. With Core AI, the company aims to accelerate AI adoption across various software categories, making AI-powered agents a key component of future applications.
Nadella emphasized the company's broader goal of operating as "One Microsoft," ensuring a unified approach to AI development and deployment.
"Our success in this next phase will be determined by having the best AI platform, tools, and infrastructure," Nadella said. "We have a lot of work to do and a tremendous opportunity ahead."