Microsoft conducts major Windows reorg in effort to build an agentic OS (www.windowscentral.com)

Microsoft has reorganized Windows engineering, moving the teams that build the core of Windows back into the Windows organization after a split in 2018 that placed core work under Azure. In an internal memo, Windows and Surface head Pavan Davuluri said client and server engineering will now operate under one roof to “bring focus to delivering against our priorities,” and to help “deliver our vision of Windows as an Agentic OS.” A small set of low‑level groups — kernel, virtualization, silicon enablement and Linux/WSL teams — will remain in Azure Core to provide foundational support. The change matters because Microsoft is explicitly aligning Windows engineering to build an AI‑centric, agentic OS that can accept voice input and perform actions on users’ behalf. Consolidating client and server teams should speed cross‑stack integration needed for system‑level AI features (context sharing, permissioned access to apps, hardware acceleration and virtualization hooks). Retaining kernel, virtualization and WSL in Azure highlights ongoing dependency on cloud and platform infrastructure, so coordination between orgs remains critical for security, privacy and silicon enablement. The reorg signals Microsoft doubling down on making Windows the primary host for tightly integrated AI experiences, but also raises engineering and governance challenges as OS‑level agents gain deeper system privileges.