Microsoft sharpens agentic AI focus with new ‘CoreAI’ division

Microsoft CEO Satya Nadella has unveiled the launch of a new internal AI division focused on advancing the tech giant's agentic AI capabilities.

The new ‘CoreAI – Platform and Tools’ division looks to improve synergy between the company's software engineering and AI divisions, as well as other key teams from the office of the CTO such as AI Supercomputer, AI Agentic Runtime, and Engineering Thrive.

Building a complete Copilot and AI stack through this division will allow customers to build and deploy AI applications and agents, Nadella said. The division will also build out GitHub Copilot.

Jay Parikh will lead the group as EVP of Core AI, with Eric Boyd, Jason Taylor, Julia Liuson, Tim Bozarth, and their respective teams reporting to Parikh.

in a blog post unveiling the move, Nadella said the new division aims to interoperate with other departments at Microsoft to build closer collaborative ties.

“Ultimately, we must remember that our internal organizational boundaries are meaningless to both our customers and to our competitors,” he said.

“When we talk about operating as One Microsoft, we are effectively talking about how we are continually increasing our customer focus, raising the bar on our innovation, and driving accountability, so we can truly live up to our mission."

Microsoft’s agentic AI focus

Nadella said a key factor behind the shake up is due to the fact the industry is approaching the next stage of AI development, with enterprises globally focusing heavily on agentic AI adoption.

With this in mind, 2025 will be shaped by 'model-forward' applications, he said.

Microsoft’s focus in the year ahead will be on building out its agentic AI capabilities, and how the firm builds, deploys, and maintains these platforms from an engineering standpoint will see a fundamental change.

“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.

Azure will continue to underpin AI infrastructure and Microsoft will build its AI platform on top, Nadella noted. As platforms and tooling capabilities come together, agents will be created that change every SaaS application category.

“Our success in this next phase will be determined by having the best AI platform, tools, and infrastructure. We have a lot of work to do and a tremendous opportunity ahead, and together, I’m looking forward to building what comes next,” Nadella said.

Microsoft’s latest move is part of a continuing focus on AI agents. In October 2024, the firm unveiled that it would launch agents for Copilot in preview for its customers to automate workflows and business processes.

Other customer-focused moves by the firm saw Microsoft unveil Azure AI Foundry in a bid to help enterprise customers scale AI adoption.