Satya Nadella is haunted at the prospect of Microsoft not surviving the AI era (www.theverge.com)

Microsoft CEO Satya Nadella acknowledged at an employee town hall that he’s “haunted” by the risk of the company becoming irrelevant in the AI era, warning that longstanding product categories and margins (notably productivity software) could shrink as models increasingly generate documents, slides and spreadsheets. His comments—coming amid morale problems and rounds of layoffs—signal a push for “renewal”: reorganizations and promotions (e.g., Charles Lamanna and Pavan Davuluri to presidents) to consolidate Copilot efforts and prioritize AI-native business models. For the AI/ML community, that means Microsoft is shifting from defending legacy platforms to aggressively betting on enterprise AI, reshaping product teams, priorities and career incentives. Technically, Microsoft’s AI leadership says the company is making “significant investments” in training capacity, hinting at ambitions to run clusters “six to ten times larger” than those used for its MAI-1-preview model—bringing Microsoft closer to the scale of Meta, Google and xAI frontier efforts. Strategic moves also include a new OpenAI deal that eases cloud restrictions (potentially clearing the way for an IPO) and an apparent operational preference for Anthropic’s Claude Sonnet 4 in tools like Visual Studio Code/GitHub Copilot. The combined signals—massive compute spend, model selection shifts, and product consolidation—underscore Microsoft’s determination to lead on AI or risk the fate of past tech incumbents.